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Mexico Tries to Bolster Its Productivity : Commerce: More efficient production is seen as a key to success under the proposed free trade accord. But some workers, citing their low pay, are balking.


MEXICO CITY — Mexicans have a ready reply for bosses who gripe about low productivity: "If you pretend to pay me, I'll pretend to work."

Mexico's $4-a-day minimum wage, which some American businesses find enticing but U.S. unions fear, is resented by workers here. They remember when their paychecks bought twice as much as they do today, and when they did not have to take a second job or sell tacos on the weekend to support their families.

Complaints that workers produce too few goods, or that their work is poor quality, simply adds to the resentment.

Now Mexican authorities are trying to persuade people that the days of prosperity could return if they would be more productive.

The average Mexican worker is about half as productive as his U.S. counterpart, according to a study by the Mexico City-based Xabre Productivity Institute.

Virtually everyone agrees that Mexico must increase worker output to compete in the proposed North American free trade zone, much less the world market. It cannot attract investment simply on the basis of lower wages.

The disagreements begin when it comes to deciding how to achieve higher productivity and how the rewards from it are to be shared.

Take the question of why Mexican productivity is so low in the first place.

Feather-bedding and outdated work rules, say employers.

"The main problem is management," counters Tomas Martinez, an official at the Union Center for Advanced Studies at Mexico's largest labor federation, the CTM.

Underlying the finger-pointing are decades of labor-management distrust and the entrenched interests of union busters and labor's own hired guns who have flourished under a system of confrontation and class consciousness.

That system--not workers or management--is really to blame, said Jose Giral, director of the Interdisciplinary Seminar on Development at National Autonomous University of Mexico and author of the Xabre study.

To illustrate his point, Giral notes: "The 15 million Mexican workers who go to the United States do not have the same kinds of problems they have here. They are just as productive as anyone else."

Conversely, when U.S. companies set up shop in Mexico, they usually are about as productive--or unproductive--as neighboring factories. "The company depends on Mexican vendors and supplies the Mexican market, which does not demand a quality product," he said.

Same workers, same companies, different productivity. And the only variable is a move across the border.

To Giral, this means, "What we need is a change in organizational culture." That will require changing deeply embedded idiosyncrasies of Mexican society, such as class discrimination, he added.

Ezekiel Garcia Vargas, a 35-year-old lathe operator at Sealed Power Mexicana, Mexico's biggest piston ring maker, can attest to how deeply that discrimination runs and how it affects workplace relations and, ultimately, productivity.

Just after he had gone to work at the factory near Mexico City 13 years ago, the union negotiated a subsidized lunch program for workers. Once the cafeteria was finished, it was opened to all employees. But office workers said they wanted a separate section with a different menu.

Management refused, to the union's delight. "To us it meant we all work together, we all eat together--and we eat the same thing," recalled Garcia Vargas, a stout man with thinning, dark curly hair and a mustache.

That was the beginning of a new respect between labor and management that became critical when the company's biggest customer, Ford de Mexico, raised quality standards in 1986 for parts produced in Mexico.

By 1989, SPM had met the higher standards. Along the way, workers were rewarded with pay raises. They now earn $11 to $27 a day, plus benefits that nearly double their wages. That is top pay in the Mexican auto parts industry.

But these days, besides quality, the company has to think about productivity. Ford can import piston rings from the Far East or the United States at prices lower than SPM's.

To help cut prices, workers are trying to reduce the $2 million a year in waste from broken rings. They have also become more flexible about moving to production lines where more workers are needed, although their contract still specifies rigid job categories.

Despite its success, SPM suffers from many of the problems that Giral cites when he discusses Mexico's low productivity.

Over the last two decades, Mexican economic policy has switched direction more often than a barnstorming pilot. With each swoop and turn, hundreds of companies changed hands, causing a rapid management turnover that has left workers distrustful.

Controlling interest in SPM was sold to the Mexican conglomerate Condumex in 1981. Then, last year, Carlos Slim, one of Mexico's leading entrepreneurs, bought control of the parent company. Workers are wary of the new management.

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