TIJUANA — Ike Munoz, a corporate manager at the vanguard of a new industrial age along the U.S.-Mexico border, struts confidently through assembly lines of seamstresses and upholsterers, carpenters and painters, all busily fashioning chairs, sofas and tables for U.S. consumers.
"This business would never have been able to survive in the United States," said Munoz, a self-assured U.S. Navy veteran who favors open-collar shirts and blue jeans while overseeing a massive furniture-manufacturing operation here. "This is our opportunity to be competitive. We just couldn't compete any more in the United States."
Munoz, whose family emigrated from Mexico to California when he was a youngster, is now general manager of Douglas Furniture of California's sprawling Tijuana operations, which are centered in two adjoining industrial complexes in the city's Otay Mesa area, east of downtown.
Douglas, based in Redondo Beach, built its subsidiary on tracts scooped out of a hillside above a residential neighborhood called El Ejido Chilpancingo, many of whose residents work at Douglas and other foreign-owned \o7 maquiladoras \f7 on the hillside and mesa to the north.
Douglas now employs about 850 workers here, making it one of the largest of Tijuana's more than 500 \o7 maquiladoras\f7 , along with Japanese electronics giants Matsushita, Sanyo and Sony, and U.S. manufacturers such as toy producer Mattel.
If the United States and Mexico sign a free-trade accord, many observers view so-called "offshore" production facilities, such as the Douglas Furniture plant, as a kind of precursor of the future, for better or worse.
The company is among several dozen furniture makers from Southern California that, in recent years, have joined the exodus of manufacturers to Tijuana and other Mexican border cities.
Lower wages and benefits are not the only attractions to relocating in Mexico. (Total labor costs in Mexico amount to anywhere from one-quarter to one-eighth of similar expenses north of the border, experts say.) In addition, wood furniture manufacturers, whose standard treatment processes emit toxic paint coatings and solvents, face less stringent enforcement of environmental regulations--particularly air pollution guidelines--and occupational safety standards in Mexico.
From management's perspective, Mexico represents an opportunity to be competitive, especially with Far East manufacturers, and remain geographically close to the Southern California market.
"There are people in our industry, particularly in wood furniture, who are finding it virtually impossible to manufacture in Los Angeles," said Douglas Vice President Harold Applebaum, who specifically cited stringent Los Angeles-area air standards, promulgated by the South Coast Air Quality Management District and the U.S. Environmental Protection Agency.
Organized labor representatives and other critics view the motivations of furniture firms differently. Union officials maintain that executives of Douglas and other companies that moved south were eager to reap huge profits on low-cost labor, wanted to escape U.S. worker-safety regulations, and were insufficiently creative to integrate more environmentally sound technologies, such as water-based coatings.
"I would say that Douglas was lacking in foresight and was downright cheap," said Peter Olney, an organizer for Local 1010, International Union of Electronic, Electrical, Salaried, Machine & Furniture Workers, AFL-CIO. The Huntington Park-based union chapter represents about 1,200 Los Angeles-area furniture workers, not including Douglas workers.
"The companies that are crying about regulations in Southern California today are the same type of companies who were crying about child-labor laws 70 years ago," Olney said.
Douglas, long one of the nation's leading dining-room furniture manufacturers, has plans to add a third Tijuana manufacturing site on a lot adjoining its property, Munoz said, eventually increasing its Mexican payroll to about 1,200. The move would give the company about half a million square feet of production space--roughly equivalent to more than 10 U.S. football fields. Douglas began moving operations to Tijuana almost six years ago.
Douglas' Tijuana plants are identical to sister facilities in Southern California and Chicago, Munoz said, dismissing suggestions that any kind of substandard methods are employed. "I would say this plant is better than what we have in Los Angeles," he said while escorting a visitor through one of the cavernous production buildings, abuzz with workers sewing and sawing, painting and finishing.