These should be the best of times for Mexico's auto industry. The country produced a record 2 million cars and light trucks last year, exporting three-fourths of them, while more than $4 billion in foreign investment poured into the sector. And the government anticipates much more as Detroit's cash-strapped automakers head south for cost savings.
Mexican assembly workers average just $3.50 an hour plus benefits, compared with about $27 hourly plus benefits at a GM or Ford plant in the U.S. But less skilled workers at parts makers such as Delphi Corp. in Mexico earn as little as $1.50 per hour, and their benefits are skimpier because unions are weaker in the fragmented parts industry.
Two years ago Ford embarked on a $1 billion expansion in Hermosillo, which employed 1,200. The company sat down with union leaders and pledged to create as many as 2,000 more jobs, as long as workers agreed to flexible work rules and lower starting wages. Today, the union says, about half of the factory's 3,000 hourly workers earn $2 an hour--just half what those with more seniority do. "It's a reality we cannot deny," says César Flores, president of the Mexican Automotive Industry Assn. "An assembly plant now creates fewer good jobs."
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