Maquiladoras

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Assignment #3

Global Logistics – Maquilodoras
In 1965, the Mexican government launched the Border Industrialization Program (BIP), better known as the Maquiladora Program. This program's original purpose was to absorb the excessive amount of unemployed people who resided along a narrow-band of land on the Mexican side of the American-Mexican border. Tens of thousands of Mexicans were returning from the United States upon the termination of the Bracero program that allowed Mexican agricultural workers to work legally in the United States. It was also hoped that this program would help develop the Mexican manufacturing base and lead the transfer of technology to Mexico. Over time the Maquiladora concept evolved into nearly tax-free zones tapping into seemingly limitless foreign investment of multinational companies looking for low labour costs, and the Mexican government finally permitted that they could be established anywhere in Mexico. Maquiladora means "apparel for export," reflecting the early assumption that most factories would produce textiles. Nearly 50 years after the initial setup of the Maquiladoras, the production is much more diversified, for example, textile represents 28% of the production whereas electronics represent 16%, other manufacturing 15% and furniture assembly 11%. The Maquiladora program offers a great opportunity to recruit or contract a varied workforce at very affordable costs, mostly unregulated conditions in Mexico without traditional trade barriers and preferential duties levied on the value-added portion of your products only. World-class companies such as Acer, Bayer, BMW, Canon, Casio, Chrysler, Daewoo, Eastman Kodak, Fisher Price, Ford, General Electric, JVC, GM, Hasbro, HP, Hitachi, Mattell, Mercedes Benz, Mitsubishi, Motorola, Nissan, Phillips, Pioneer, Samsonite, Samsung, Sanyo, Sony, Toshiba, VW, Xerox and Zenith operate or contract Maquiladora companies in Mexico.

Other major advantages to this program is...
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