Eloctrocorp Plant Relocation

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The case of the plant relocation


Continue operations in US
Move operations to Mexico
Move operations to Philippines
Move operations to South Africa

Facts ( Manufacturing of computer components for automobiles.)

Complex hydro-carbons used to clean chips and other parts.
Solvent carcinogens must be handled with extreme care.
Strike of union workers to raise wages.
High wages i.e. $15/hour
Safety regulations increasing cost of production.
Environmental regulations increasing cost of production.
Expensive waste management increase cost of production.


Labor issues
Child labor
Women labor
Union rights
Safety regulations of the country
Environmental regulations and general public awareness
Waste management regulations of the country
Child Labor
Mexico has not ratified the main ILO Convention on child labor and there is evidence that child labor is a problem in the informal sector. However, the government is engaged in efforts to address the situation. Mexico has not ratified ILO Convention No. 138 (1973), the Minimum Age Convention. Child labour laws set the minimum age for employment at 14. This is fairly well observed in the formal sector, particularly in large and medium-sized companies. Enforcement is less adequate at the many small companies and in agriculture and is virtually absent in the informal sector. The ILO reports that 18% of children aged 12 to 14 work, often for parents or relatives. Only six out of ten primary school children actually complete school. The government has been undertaking efforts to address the problem of child labour, in cooperation with UNICEF. The number of years of free, obligatory school education was increased from 6 to 9 in 1992 and parents were made legally liable for their children’s attendance. In conclusion, the use of child labour is unlikely to be of a scale such as to make a significant contribution to the price of Mexico’s exports. There is evidence that the government of Mexico is undertaking efforts to reduce child labour in the informal sector. The Mexican Constitution establishes 14 as the basic minimum age for work. The Federal Labor Law (LFT), which is incorporated into the Constitution, includes special provisions concerning the work of children between the ages of 14 and 16. Among these various provisions, minors in this age group are prevented from work that is "dangerous or unhealthy," underground or underwater, itinerant, or which "may affect their morals or good behavior." In addition, they may not work after 10:00 p.m. in an industrial plant, work for more than six hours per day, or work for more than three hours without a one hour break. In order to work, children under eighteen are required to have permission from a legal guardian or parent, have regular medical examinations, and their employers must post a list of dangerous tasks not to be performed by minors.

International Conventions

Mexico is party to the UN Convention on the Rights of the Child. The Government of Mexico has not ratified ILO Convention No. 138 Concerning Minimum Age for Admission to Employment or ILO Convention No. 59 Concerning the Minimum Age for Admission to Employment in Industry.

Freedom of Association and the Right to Collective Bargaining

Mexico has a pluralistic trade union situation guaranteed by the 1917 Constitution which provides workers the right to form and join unions of their choice without prior authorization and the right to strike. Collective bargaining is widespread. However, the legal registration of unions in Mexico is impeded by the authorities, specifically by the local Conciliation and Arbitration Boards (CABs) which have sole authority to regulate union elections and handle all phases of labour dispute resolution. Registration by CABs is necessary for trade unions to obtain legal status but these boards act to withhold or delay registration from unions that are hostile to government policy or...
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