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Japan Leads Way : Asian Firms Find Home in Mexico

March 19, 1987|JONATHAN PETERSON and NANCY YOSHIHARA | Times Staff Writers

TIJUANA — On Mexico's Mesa de Otay, teen-age workers kick soccer balls on their lunch breaks, earthmovers bite at the sandy soil to make way for yet another factory--while passing motorists slam on their brakes for crater-like potholes and a stream of sewage that washes across the road.

The youthful soccer enthusiasts may not realize it, but they have become players in another game as well--the global battle for industrial survival. And the road may not be ready for it, but the traffic is increasing--from all over the world.

Flapping in the warm breeze outside some of Tijuana's biggest, newest factories is the emblem of a red sun on a white background. It is the flag of Japan. "We need to survive," explained Shigeru Otsuka, general manager of a Sanyo plant that until this year made its compact refrigerators in San Diego. "That's why we came over here."

Dramatic Expansion

For decades, border towns such as Tijuana, Juarez and Mexicali have been home to U.S.-controlled factories making everything from blue jeans to auto parts, water beds to cabinets. What is new is the dramatic expansion of Mexican operations by the Japanese, with signs that the South Koreans and Taiwanese are not far behind.

Success in the American market has taken on a life-and-death significance for these countries in light of intensifying competition and sluggish consumer demand throughout the world. To achieve that success, the companies are relying increasingly on the formula "assembled in Mexico." The drawing cards: low wages, an accommodating government and nearness to the wealthy consumers north of the border.

For the Japanese, Mexico has become especially appealing. The strong yen has eroded Japan's export profits as companies seek to protect their market share while holding down prices. In the Mexican plants, unskilled workers are paid $1 an hour or even less for such basic tasks as hauling materials, drilling holes and attaching stickers.

Japanese Exhortations

Just down the road from Sanyo, a Hitachi plant--where the Japanese and Mexican flags first were raised earlier this month--illustrates the internationalization of the border industry: In Japanese fashion, a poster exhorts Mexican workers to make their work "seguro, exacto, bonito, rapido"-- safe, precise, attractive and fast. In the executive offices, a Mexican secretary offers a Japanese-style bow and says "sumimasen" to excuse herself as she serves coffee.

"The competition is getting hotter and hotter in the television market," explained Morihiko Koide, president of Hitachi of Mexico, on a recent day in which U.S. Navy parachutists could be seen from his window practicing landings just across the border. "To survive, we have to use the less-expensive labor that is available here."

Already, on the mesa that looms against the horizon a half-hour's drive from San Diego, a growing number of buildings sport such names as Matsushita, Sony, Sanyo and Hitachi--assembling television sets, fans, refrigerators, vacuum cleaners and other products. And their lesser-known suppliers also are making the trek to Tijuana: Sanoh, which provides condensers for Sanyo refrigerators, and Tocabi, which makes cabinets for audio equipment that is marketed under the Fisher label.

The growing Japanese presence is increasing opportunities in a city where many have traditionally eked out a living in auto upholstery shops or by hawking cheap figurines and flower pots to drivers waiting to cross the border. The city also has served as a way station for those on clandestine journeys into the United States.

"The first plant that I set up here, I always asked, 'How many times did you cross the border?' " recalled Manuel Castillo Flores, a native of Mexico City who is Sanoh's operations coordinator and who previously helped set up a Mexican operation for a U.S. firm that manufactures rubber grips for golf clubs. "If they'd done it two or three times and been sent back, I knew it was a good time to hire them because they'd stay for a while."

Antonio Colin Negera, 17, moved to Tijuana with his brother from their hometown outside Mexico City, where they picked peaches, apples, plums and green beans. Today he runs a machine in the Sanoh plant. His brother, 18, toils on a nearby farm, milking cows.

"As soon as he can, he wants to work either here or in another factory," said Negera, who left school after the sixth grade. "I like it here," he added. "I will stay a long time."

The plants are known as maquiladoras, a word derived from "maquila"-- the fee that millers collected for processing grain in colonial Mexico. Under the 22-year-old program, foreign companies bring equipment and raw materials into Mexico duty-free, then ship the products out of the country, almost always to the United States.

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