Coronavirus and Supply Chains on the US-Mexico Border:

An Interview with Jerry Pacheco, President of the Border Industrial Association

Jose Z. Garcia

After reviewing the news in Cd. Juárez and Mexico City about the potential threat the coronavirus poses to manufacturing on the US-Mexico border, I called Jerry Pacheco, President of the Border Industrial Association at Santa Teresa, for an interview about global supply chains as these affect the border.  Much of the information contained below was derived from sources he generously provided.  To better understand the potential threats from a global pandemic to supply chains in the region, it might be helpful to provide some background information (Part I) before getting to the interview (Part II).  Some readers may wish to skip directly to the interview.

Part I:  Background

The Paso del Norte border crossings—at El Paso and Santa Teresa—import from, and export to, Mexico at the level of about $110 billion in goods per year.  This represents 22% of trade through all land crossings on the US-Mexico border, the value of which is well over $600 billion.  Santa Teresa, the fourth busiest port on the border, imports more than $16 billion (2018 figures) from Mexico and exports over $14 billion of goods to Mexico.  Putting this into comparative perspective, New Mexico’s GDP in 2018 was slightly over $100 billion, in a year of record oil sales.  A lot of value transits through the Paso del Norte, not even counting the value of illegal drug shipments.  El Heraldo de Chihuahua reported yesterday (Sunday) that Cd. Juárez border crossing exports to the USin 2019 reached nearly $67 billion (US), according to Jaime Campos, director of industry in the Chihuahua state Economic Development and Innovation Department, and former director of the New Mexico Border Authority during the Richardson administration.

The Maquila Industry in Cd. Juárez

Who owns the maquila plants?  For many years maquila plants in Juárez were owned by US firms.  No more.  Japanese and German firms combined own 15% of them.  In the interview Pacheco rattled off other owners:  Spain (Siemens-GAMESA); their maquila in Juárez produces the large windmill blades seen on trucks all over New Mexico; China, Britain, France, Canada, Sweden, Taiwan, South Korea, Malaysia.  Together, non-US firms own about 37% of the maquilas in Juárez. (click here for source) Global ownership of these maquilas is now a fact.

Cd. Juárez is the largest maquila producer on the US-Mexico border.  Sixty nine percent of all jobs there (around 310,000 out of a total of about 450,000 jobs) are employed in the manufacturing sector.  (click here for the source).  By comparison, Albuquerque, with less than half the population of Juárez, in 2019 had a civilian labor force of about 440,000, but only about 16,000 of these were in the manufacturing sector.  Juárez has a much younger population than Albuquerque, and family sizes are larger, which is why total employment in each city is about the same.