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Maquiladora operations have become increasingly popular during the past 10 years. The driving force behind this popularity has been the dramatic devaluation of the Mexican peso, which has made Mexican labour among the lowest cost in the world. However to take full advantage of maquiladora operations additional logistics costs are incurred in supporting the Mexican production/assembly facilities. The logistics/manufacturing cost trade‐offs inherent in maquiladora operations are explored empirically. While logistics costs were found to increase and logistics performance decreased, most of the firms involved in maquiladora operations considered their operations to be highly successful based on product cost savings.

The goal of this study is to further the existing understanding of the diverging pollution prevention and occupational and safety practices undertaken in the Mexican maquiladora industry in order to promote the creation of a sustainable production system.

This study explores in detail the occupational health, safety and environmental practices performed by six electronic maquiladoras located in the State of Sonora, Mexico. The OSHA's program evaluation profile (PEP) and cleaner production and pollution prevention and worker surveys were the instruments used for collecting information. All instruments were complemented with short interviews and walkthroughs in the production lines.

Evidences from this study suggest that today's trends in maquiladoras production patterns continue to go in an unsustainable direction because of the lack of good environmental and occupational and safety practices.

This study reveals the most telling and significant sustainability themes associated to the maquiladora industry that holds the exciting potential of protecting the environment and labor and strengthening economic growth through more efficient and sustainable production.

Sustainability production is an issue that is often neglected into the actual stock of published material about maquiladoras. This study fills this gap through a broad structural approach that takes into account economic, social, and environment aspects as a way to helping the adoption of sustainability practices in the maquiladora industry.

The maquiladora program is an important part of the economy in North America. A significant share of intra‐industry trade has been generated between the USA and Mexico. The imports and exports from maquiladoras to the USA continue to grow under NAFTA. However, non‐maquiladora sectors are growing at a faster pace. Non‐US foreign direct investment, particularly from Asian and European companies, is a current trend in maquiladoras. A cluster concept is now developed among new maquiladoras from Asia and Europe to remain competitive in an increasingly price‐sensitive market, to maintain consistent quality standards in a high‐volume environment, and to fulfill the NAFTA’s rules of origin provision. Maquiladora production is now shifting from lower‐skilled, labor‐intensive assembly to advanced production technologies. Obstacles still remain in Mexico’s infrastructure and regulations to its market. There are some debates on the future of maquiladoras after January 1, 2001, the theoretical expiration date of maquiladoras. However, the complementarity of the US and Mexican economies should nonetheless sustain incentives for production sharing and sourcing.

Case studies were conducted with two small apparel businesses in Mexico to determine the physical and human resources critically influencing full‐package apparel manufacturing and export. Data analysis deductively focused on the use of local resources, the role of technology, understanding of the export market and the ability to develop a product suitable for that market, business skills needed for production and delivery, and availability of capital. Based on the results, a study guide was developed for use by individuals, small business owners, cooperatives, and communities as they promote development and job creation in Mexico through apparel production and export under NAFTA.

The purpose of this paper is to examine the effect of cyclical and structural factors on the decline of maquiladora employment. In addition to the US industrial production, the cyclical factors examined are relative Mexican US wages, the Mexican exchange rate relative to the US, and US foreign direct investment (FDI). The paper also explores the effect of competition from China, a structural effect, on the decline of maquiladora employment.

A vector error correction (VEC) model of maquila employment for the period 1980‐2002 is estimated and controlled for US industrial production, FDI flows, relative wage rates of Mexico and USA. To empirically investigate the structural differences of lower costs in Mexico vs China a seemingly unrelated regression (SUR) is estimated across three sectors: apparel and textile, electronic, and transportation.

From the VEC maquila employment model it is found that, in addition to the strong effect of US industrial production on the maquila employment, there exist significant short‐ and long‐run effects of Mexico US exchange rate and Mexican wages relative to USA on maquila employment. The sectoral (SUR) model shows that competition from China has a bigger adverse effect on relatively labor‐intensive good and commodities which are cheaper to transport (such as textiles) over more bulky transportation goods. The transportation sector has a location advantage, though is more sensitive to the cyclical fluctuations in the US industrial production.

Future research should investigate the role of USA and world FDI exclusively into Mexico and maquiladora sector.

Well designed controls, output choice, and location advantage are important for the growth and viability of small scale manufacturing industries.

The VEC model for maquila employment and the SUR framework across main maquila sectors is the first to account for wages, exchange rate, and FDI in addition to the US industrial production in understanding the decline in maquiladora employment.

Maquiladora plants are foreign‐owned plants operating in Mexico and represent a pre‐North American Trade Agreement (NAFTA) mechanism to reduce tariffs on the assembly of component parts and finished products for re‐export. Maquilas first opened along the Mexican‐US border in the mid‐1960s to provide employment for Mexican workers as well as cheap labor for low‐skilled US manufacturers. Beginning in 1999 the industry started experiencing a sharp decline, which cost jobs and closed factories on both sides of the border. This study applies grounded theory to develop an initial understanding of the factors contributing to the success (and failure) of maquiladora realized strategies, that is, performed operating behaviors and the role of culture in the results these operations achieve. Broadly, these factors include internal relationships (with both management and line employees) and external relationships (both organizational and governmental). The study culminates in a series of suggestions for increasing the likelihood of success of maquiladoras and proposes the applicability of these factors in other multinational operations in labor‐intensive industries.

Examines the total quality management (TQM) programmes of Maquiladora operations located on the Mexican border and benchmarks their quality practices vis‐à‐vis those in the USA. Six domains of TQM programmes (information and analysis, strategic quality planning, human resource development and management, management of process quality, customer focus and satisfaction, and quality and operational results) were investigated; these domains were based on the Baldrige Award criteria. The results identify areas of improvement for both Maquiladora and US operations. Maquiladora operations need to improve customer focus and satisfaction, and employee training, whereas US operations need to improve quality and operational results, information and analysis, management of process quality, human resource development and strategic quality planning. Overall, the results suggest that US companies relocating their operations to the Maquiladora zone can obtain a competitive advantage in terms of both lower costs and implementation of TQM programmes.

One strategy for dealing with the increasing problem of cross‐border movement is to involve third‐party specialists. Reports on an investigation of third‐party use in maquiladora or twin‐plant logistics across the US‐Mexico border. A mail survey of 250 companies operating in the El Paso‐Juarex area was carried out. Results showed that the surveyed firms used third parties more than US firms in general.

Co‐production through maquiladora operations has become an increasingly popular approach to meeting the competitive challenges presented by economic globalization. To take full advantage of the benefits available through co‐production, a comprehensive logistics system must be put in place to support the geographically separated production activities. This article explores the level of emphasis companies place on logistics issues in the initial decision to establish maquiladora operations. Findings indicate that much greater emphasis is placed on manufacturing issues than on logistics issues; however, those firms that were classified as high‐emphasis firms experienced higher levels of performance than low‐emphasis firms.

ABC Consumer Electronics is headquartered in the USA, with major operations in Mexico. During the Mexican peso devaluation and economic crisis of late 1994, the company faced the greatest labor problem of its long history. The workers’ purchasing power was reduced to nearly one‐half of its value before the crisis. Other underlying and un‐addressed problems at ABC were brought to surface by workers who found themselves incapable of providing the basic necessities of life for themselves and their families. This paper explores the manner in which ABC handled the strike, how the strike affected ABC’s operations and strategies; and the impact of ABC’s decisions on other maquiladoras in Juarez, Mexico is fully explained and delineated. The case’s arguments are supported by the collection of field‐based data, the company’s archival records, numerous interviews, and the US and Mexican statistical abstracts.