Frequently Asked Questions
What exactly is a maquiladora?
A maquiladora is an American or foreign-owned factory in Mexico, governed under special provisions that allow the owner to import materials and export finished products tariff-free.
Isn’t it expensive to open a maquiladora in Tijuana?
Most of the expense you’ll incur is fitting the manufacturing facility to suit your production requirements, and transporting any equipment or machinery necessary for your operation.Border Assembly Inc. (BAI) handles most of the start-up process for you, so you can begin quickly and with minimal capital expense.
How does BAI’s corporate shelter program work?
BAI, an American company based in San Diego, uses its subsidiary in Tijuana to handle all of your permitting and licensing requirements, including regulatory compliance, staffing, facility leasing and legal issues. You provide manufacturing equipment and materials for making your product, a production supervisor, and BAI does the rest. You pay us an hourly fee that covers payroll and our service charge. Even with BAI’s fees factored in, you’ll still pay half of what you’re paying now for labor!
How could opening a manufacturing operation in Mexico possibly be simple?
BAI does all the start-up work, minimizing your start-up costs, and lets you maintain total control over production and quality once your maquiladora is up and running. It’s your plant, your profit, and you benefit from lower labor costs without the expensive, time-consuming worries associated with owning a business in a foreign country. Now that’s simple isn’t it?
Was the maquiladora program part of NAFTA?
No. Actually, the Mexican government started it in the 1960’s to stimulate the economy by attracting foreign investment. While it’s gone through some changes, including new provisions that came with NAFTA, the system has been operating efficiently, creating jobs and benefiting both Mexico and the United States since it’s inception.
How long does it take to get started?
That depends on the requirements of your particular operation, but we’ve gotten some of our clients up and running in as few as four weeks. Sometimes it takes longer, but the average for BAI clients has been six weeks.
I’d like to increase my profits, but I don’t want to produce my goods in a ‘sweatshop’.
You won’t find a sweatshop or exploited workers under BAI’s management. Our employees are paid well, get nice benefit packages, and are skilled, conscientious workers. It’s not fair to associate the entire maquiladora industry with poor working conditions. There are sweatshops in New York, Los Angeles, many other cities in the United States, and throughout the world as well. There are also lots of operations in these locations that are managed well and treat employees fairly. The same holds true for Mexico. If you’re considering a maquiladora, we encourage you to visit those we operate in Tijuana.
Why is it so much cheaper to manufacture in Tijuana?
The cost of living is lower, so employees make less. There’s also lower real estate costs, and laws and policies that encourage business, rather than impede it as many U.S. states do.
How about quality? My products need to be built to very specific standards.
Tijuana is the television-making capital of the world. Electronics, fiber-optics, computer components, automobiles, and the some of the most sophisticated products being produced are manufactured in Mexico by a young, dynamic, and highly-skilled workforce. In addition to conscientious line workers, Tijuana has a large, growing pool of engineers, designers, and administrators. No matter how complex or specific your production needs are, theworkforce in Tijuana can meet and exceed your expectations.
Are there other options besides a corporate shelter program?
Sure. If you have the time, energy, and money to burn, you can hire a multitude of consultants and do everything yourself. While some Fortune 500 companies have chosen this route, it’s not for the timid, and requires a vast amount of diligence, resources, and patience. Another option is to hire a contract manufacturer, if you can find a reliable one. Enough said.
How about shipping? Is it up to par with what I’m currently using? And how about the cost?
Tijuana has an excellent system of transportation, including truck, rail, air, and close proximity to major West Coast marine terminals. The quality is the same as the U.S., and the cost is comparable, if not cheaper.
I’m in the Midwest. Would I have to move to Tijuana to have a manufacturing operation there?
Absolutely not, but when you visit, we guarantee you’ll enjoy the dry, sunny climate, warm culture, excellent food and music, and variety of fun things to do including world-class fishing and golf. In fact, many executives enjoy the region so much, they have chosen to live in San Diego and work in Tijuana.
Is Tijuana the only city in Mexico that has maquiladoras?
No. Many cities in Mexico have maquiladoras, but none have the benefit of being in the same business community of San Diego, a logistical superior location to service the continental U.S. and the Pacific Rim, and a vibrant expanding labor pool. It’s easy to understand why there are more maquiladoras in Tijuana and the state of Baja California than any other region in Mexico.
What are some differences between manufacturing in Tijuana, Mexico and manufacturing in China, or some other country in Latin America or Southeast Asia?
For one, you can be in Tijuana in just a few hours by plane no matter what part of the United States you’re coming from. By being in relative close proximity to your operation, you can ensure quality control. Tijuana is in a superb logistical position to supply markets to both the U.S. and Pacific Rim. Moving materials there and finished products out of Tijuana is cheaper due to its location, which is just minutes from U.S. soil. A well-developed infrastructure, immense, talented labor pool, and ample supply of buildings and land for manufacturing also give Tijuana an edge.
What products can be manufactured or assembled in Mexico?
Anything that is currently being manufactured anywhere can be produced in Tijuana. Electronics, automobiles, sporting goods, toys, furniture, and chemicals are a few examples.
Do I need to speak Spanish to open a maquiladora in Tijuana?
Why should I use Border Assembly Inc.?
Experience. We’ve teamed up with more than 60 companies to establish manufacturing operations in Mexico. BAI has extensive knowledge of Mexican laws, codes, and regulations pertaining to labor, business and taxes. Our clients profit from manufacturing in Mexico without having a business in Mexico.
Isn’t manufacturing in Mexico only for huge Fortune 500 firms?
Though most Fortune 500 manufacturing firms have a factory in Mexico, there are thousands of small and medium-sized US companies reaping the same benefits.
Is manufacturing in Tijuana right for my company? How can I get more information?
If you have a labor-intensive manufacturing business (50 assembly workers or more) and payroll accounts for at least 15% of your production overhead, you should considermanufacturing in Mexico and saving 50% or more on labor costs.
Give us a call at (619) 710-0555 or fill out our info request form. We’ll gladly answer any of your questions we haven’t covered here, send you more information, or provide you with a free cost estimate.
We invite you to explore the enormous possibilities Tijuana and San Diego have to offer in business and leisure.