Border Business: How Mexico's Maquiladoras Benefit The U.S. Economy

By Mónica Ortiz Uribe
October 03, 2011

Border Business

Mexico's maquilladora (manufacturing) industry has weathered the global economic downturn and is expanding. In a multimedia series, we explore the reasons why.

Despite its ideal location right on the U.S.-Mexico border, New Mexico ranks 38th in trade with Mexico. That's a fact not lost on the business community in the southern part of the state, where an industrial revolution of sorts is slowly taking shape.

A growing industrial hub just outside Santa Teresa, New Mexico is at the heart of the state's plan to boost trade with its southern neighbor. The industrial park is located 20 miles outside El Paso, Texas; strategically built on a barren stretch of desert right up against the border fence.

Twenty years ago, the terrain around here was nothing more than hot sand and thorny shrubs. About the only thing that crossed the border was a variety of livestock from Mexico, most on their way to be fattened and then slaughtered in the United States. Cattle continue to cross today, but they now have new companions.

A mile away from where cattle cross, there is an international border crossing where private and commercial vehicles move back and forth. The Santa Teresa Port of Entry opened up in 1993. Since then, there have been a growing number of businesses that cater to the factories, or maquiladoras, south of the border.

One of those companies is Omega Trucking, a small business owned by a tall, elegant woman named Miriam Kotowski. She's the kind of businesswoman who doesn't mind stepping out on the truck yard in slacks and heels.

Photo by Mónica Ortiz Uribe
Frank Ochoa is a driver for Omega Trucking. He delivers construction material to job sites all over the United States.

“My father started about 28 years ago,” Kotowski said. “He opened a company in New Mexico. He was taking cement in bulk to Santa Fe, New Mexico.”

Now that Kotowski is the boss, she transports construction material manufactured by maquiladora factories in northern Mexico to locations all over the United States. Her flatbeds move the steel, machinery and roofing material that's used to build Targets, Walmarts, stadiums and schools. Her business, like most others in neighboring Santa Teresa, would not exist without the robust maquila industry south of the border.

One of the strongest advocates for the Santa Teresa industrial park is Jerry Pacheco, nicknamed the town's “mayor.” His real job is helping businesses set up an international presence in southern New Mexico.

“(Santa Teresa) is an incredible industrial base for a small economy,” Pacheco said. “So it's a big deal.”

Santa Teresa, NM

The Santa Teresa industrial park generates 40 percent of the state's overall trade with Mexico. The businesses here run the gamut. Some provide logistical support to the factories south of the border, while others provide parts for car seats. One company has a sister plant in nearby Juarez that prints out greeting cards for Hallmark.

“You ask me about the impact? A couple of thousand jobs more or less, hundreds of millions of dollars worth of investment,” Pacheco said. “And the amount of product is in the billions that moves through here.”

Still, New Mexico exports just under $400 million with Mexico. Ohio, more than 1,000 miles away, trades nearly seven times that amount.

John Barela is the economic development secretary of New Mexico.

“We must do better. The governor and I have met with our Mexican counterparts,” said John Barela, the economic development secretary of New Mexico. “We have all committed to making sure that Santa Teresa...has a very bright future.”

During the last session, the legislature passed three key bills that will give New Mexico a competitive edge.

Photo by Mónica Ortiz Uribe
A truck used by Omega Trucking to transport construction material manufactured in Mexican factories across the United States.

One allows overweight trucks from Mexico to enter the state within a limited radius near the border. Another sets aside funds for improving border infrastructure. And a third allows a deduction on diesel fuel for Union Pacific Rail, which will invest $400 million dollars in Santa Teresa to build a new rail facility.

Back at Omega Trucking, Miriam Kotowski says New Mexicans – especially up north – are waking up to the possibilities of partnering with Mexico.

“You know people have this perception that in Mexico they have bad quality,” she said. “It's totally the contrary. It's impeccable.”

The latest industry to locate in Santa Teresa is a solar panel company that will supply enough energy for 16,000 families in neighboring El Paso, Texas.