The Rise and Fall of Industry: A Failure to Diversify

The students were divided into groups and given various topics to research and on which to prepare a class lecture/discussion. The video above was just a small part of group 1's presentation. Here's a summary of some of their research:

Yucatan's failure to diversify has caused severe swings in its economy. Henequen production, which started in the 1800s, was eventually consolidated down to a handful wealthy families until most of the plantations were taken over by the Mexican government in the early 1900's. Henequen plants were primarily used to make rope or bailing twine. We saw first hand a henequen hacienda a few days before the presentation. However, the demand for henequen and the competition from cheaper sources created a crash in the market for Mexican produced henequen.  Today, Mexico has tons of henequen plants growing, but no demand for the rope. Could re-creating a demand help?  Is that possible.

So, the Mexican government created the maquila system. In 1994, Nafta was drafted between the United States, Canada, and Mexico which stated that there would be no tax on material imported into Mexico. A maquiladora is a concept often referred to an operation that involves manufacturing in a country that is not the client's and as such has an interesting duty or tariff treatment. It normally requires a factory that may import materials and equipment on a duty free and tariff-free basis for assembly or manufacturing and then "re-exports" the assembled or manufactured product, sometimes back to the originating country. 

The Dichotomy - as written by a student

"On our first day, we took a walking tour of Merida's 'downtown.'  We saw cathedrals dating to the 1500's, walked through the plaza, and visited the local Fiesta Americana and Walmart.  And then, we went to the marketplace.  The market had vendors lining the streets, with older Mayan women in their Mayan best, and people shopping for their daily vegetables and meats, among other things.
A list of things I saw at the marketplace:
1) puppies
2) live turkeys
3) pork
4) fish
5) dog food, which was next to the
6) dry pasta
7) counterfeit DVDs
8) a legit keymaker
9) papaya
The livelihood of Merida's poor was in the marketplace.  On the outer rim of the market, there were dress shops, children's school supply shops, a pharmacy, and even a wedding parlor.  Not far away, though, was the Montejo street, with mansions lining the streets.
On the trip to the Reserve, when we left the city, we encroached the rural parts of the Yucatan.  Huts, banana leaves, and emaciated dogs were our scenery.  Upon peering in the huts, hammocks only.  Many didn't have running water or sewage systems.
And again, on our way back, we stopped by and toured an old Hacienda.  The house was airy and grandiose.  They had acres and acres of private land, a private theater, upper class china and lower class china, a pool, and a stable.  Right out of the grounds, we could see a small butcher shop, and huts lining the streets.
An interesting dichotomy to see such a rich history amidst the growing poor.

Not unlike Jackson's Belhaven and Millsaps pitted against North Midtown."

Language lesson time

If you've ever been to Yucatan with one of the business classes, you know how much we love Gregorio, one of the tour guides at Uxmal. Courtesy of his expansive vocabulary, here's a little lesson in Maya and a few other languages, as well as some pictures from our trip to the ruins at Uxmal.

Class Time

Want to see what our classes are like? Here's a glimpse:

Classes are a lot more relaxed than what you might expect, but that's not to say the students aren't learning.  Millsaps business students in Merida discuss why a company might consider going global, as well as the risks and dangers they could encounter. They draw from concepts they've studied in their other courses, such as marketing, accounting, management or economics, and expand that thinking to an international perspective.  Many different multi-national corporations are studied throughout the course; Bimbo was just making headlines for acquiring Sara Lee Corporation at the time this was filmed.

Intellectual Property Scavenger Hunts

As always, the class got divided into two groups and sent out into the city with a mission: find intellectual property violations.  It's a scavenger hunt, with the goal of finding not the most, but the best that the marketplace has to offer.  Below are their videos.  Which group wins?

Team A:


Team B:

The Port of Progreso

The Port of Progreso is a major international port for both importing and exporting goods from the Yucatan, and we got to take a tour of it during our first week there.  All of the companies we've visited ship their products out from that port.  You may recognize the name Progreso from a cruise you've taken as many cruise ships now dock in Progreso.  Its proximity to Merida makes it a perfect stop.  Buses go in and out of Progreso all day long.  It's less than a half hour drive from our house in the city, so going there is an easy choice on hot afternoons.

It's not the best picture I've ever taken, but there's a photo of the port from Flamingos, the restaurant in which we ate lunch that day.  We have some video from our tour that I'll be attaching soon so you can catch a glimpse of the view.

If I dig deep enough, do you think there's a cenote there?

What do you think it would cost me to build one of these in my backyard?

Cenotes are limestone sinkholes with underground rivers running through them found throughout the Yucatan Peninsula.  These cenotes were sacred places for the Maya and were believed to be the entrance to the underworld.  Filled with crystal clear fresh water, they are absolutely on our favorite places to go.  Some are completely underground like the one we visited in Chocholá, where you could barely even stand, and others are open like the one near Chichén-Itzá (see pics above).  Regardless, the most impressive are the cenotes we visit in Cuzamá.  Get prepared to be jealous!
Pictures and videos to come.

Yaxcopoil

Yaxcopoil (pronounced Yahsh-ko-po-eel), is a hacienda located in Yucatan with a rich history.  According to their visitors' guide, the word means "the place of the green Alamo trees" in the Maya language and the place has been around since the seventeenth century.  Once spanning 22,000 acres, Yaxcopoil was at one time considered to be one of the most important rural estates in Yucatan, both among cattle ranches and henequen (sisal) plantations.  The estate is much smaller now, but the main buildings are still available to tour.
They've got a website, but you can see what we saw in the video below.

Blue Goose? Our trip to a sewing factory

Always one of our favorite places to visit, Ganso Azul was our destination for the day. Ganso Azul (which means Blue Goose in English), is a sewing maquiladora in Merida where I have interned the last two summers.  Justin jokingly mentioned that the class trip to Ganso is really just a homecoming celebration for me, and I have to admit that he's right.  The tour I was giving of the factory floor got interrupted quite a few times as I stopped to catch up with friends from my time there.

We have lots of great video of the factory and of Gus (Gordon, the owner and an accounting professor from UT Tyler) talking with the class, but it's going to take awhile for me to process it all.  Please check back soon and often for updates.

In the meantime, below are some of the things Lauren thought were worth noting about the visit today. In the class, we've spoken a lot about employment laws, wages, and reasons for doing business abroad, and Gus was incredibly accommodating and took the time to answer many of our questions.  Lauren mentions a few:

Today, we woke up early and headed to Ganso Azul which is a maquiladora that manufactures uniforms. I was very surprised to see how different the working conditions were. Before going I thought it was going to be more like a sweat shop, but actually it was very interesting and well run. It was so different than I expected. It was a huge space with workers spread out. Workers were singing to music that was being played on the speakers. We went on a tour of the place and were able to see the different product lines. The workers work for minimum wage initially, but get bonuses for meeting quotas and coming up with new ideas.

After our tour, we were able to sit with Gus and ask questions. We asked about reasons for why he chose Mexico and not China, questions pertaining to wages and labor laws. Gus chose not to go to China due to having a competitive advantage of being closer to the United States. With China it takes a lot longer to ship their products and it is never guaranteed that it will get to the United States in time. With Mexico it takes about three days to get to the United States. Also, labor in Mexico is still cheap.

He also spoke about Mexico's termination laws and how they cannot fire an employee without giving a severance package. So even if an employee is not meeting quota or not very good at their job they cannot be fired without a severance. The severance package usually consist of 3 months of pay, Christmas bonus, and vacation days.

Daniel had a similar reaction to our visit:

It was very interesting to see the maquiladora system on Thursday. It seems like we all came to Mexico with certain stereotypes--especially in regards to labor conditions and management styles. However, to my surprise, I saw my stereotypes disappear after having the chance to tour Gus's maquiladora and sit down and discuss the system with him. 

First, the most significant aspect that stuck out to me was the management style utilized. Cheap labor is a significant competitive advantage that Mexico has in the world economic environment, and I assumed that with the existence of cheap labor there would be pretty bad working conditions as well. While the minimum wage is far less than what some people would assume as a living wage, the company utilizes many upper level motivational techniques to keep productivity high and also award their employees. For instance, in the maquila that we toured, Gus discussed that they have all kinds of bonuses available to their employees. Additionally, he discussed how the company paid for each employees way to and from work everyday. Gus also explained that they placed a high importance on job satisfaction... These are all great ways to motivate a work force even through the low wages. I didn't expect to see these types of items in place in Mexico, especially not in a maquiladora. 

Before leaving, Gus made sure to impart some wisdom to us from his experiences, and encouraged us to take risks while we're young and while there is still plenty of time to clean up any mistakes we make along the way.  Do you think he may have been referring to starting businesses of our own?  Taking a big chance has worked out well for him.  Young businesspeople that we are, on the verge of entering the workforce, we may as well begin now exploring our options.

Do you know where your food was grown? Our trip to Valle del Sur

As part of the course, the students are required to keep up a blog of their own, journaling their experiences in Yucatan.  Below are some of their comments from a trip we recently took to Valle del Sur:

Yesterday, we woke up early in the morning to head to Southern Valley Farms, a cucumber/squash/green bean farm. It was about two and a half hours away and the roads were treacherous and bumpy. When we got to the farm, we all loaded up in a school bus brought down from Georgia and went to tour the entire farm. We saw where the vegetables were first planted in the greenhouse and then replanted in the ground. We took a break and had lunch with all the 600-800 people working there. Then we were able to go see people picking the cucumbers, wrapping vines, cleaning the cucumbers, sorting out the bad and good ones, and we saw the packing area where the cucumbers are sorted, refrigerated, and shipped out.

-Kelly

Chino [the property overseer and our guide] took us on a tour of the property and explained how they practically farmed all 1200 acres by hand. He showed us every facet of the farming process, from planting to harvesting and to packaging the fruit. The coolest part of the day was during lunch. We went to eat lunch with the [workers], which was really awkward as well. The workers were staring at us the entire time and they were probably thinking, "What are those Gringos doing here?" lol. The food was wicked awesome by the way. All in all, Valle Del Sur was really cool and they take pride in their property and provide high quality product.

-Tyler

Like they mentioned, we were lead on a very impressive tour of the farm and had the opportunity to join the workers for lunch in what could only be described as an outdoor mess hall, much to our delight.  Ask anyone of us, and we can now identify with certainty the difference between their 3 grades of cucumbers, as well as tell you how to "train cucumber vines."  Thank you so much, Southern Valley for lunch and for showing us what you do!  I think all of us will be looking for your name next time we go produce shopping.

Curious?  Have a look for yourself!

Video pending.

The Meaning of Work

One of our students reflects on her time in Mexico and contemplates "the meaning of work."

     I just finished my interview with the woman from Mexico City, and our conversation revolved predominantly on what I've gathered most from this trip: the meaning of work.
     The meaning of work, as I learned in undergrad, is about vocation or calling.  It's about finding a higher purpose or meaning in your work, whether that means [something] religious, something you're passionate about, something challenging, something enlightening, or even something that facilitates your calling/vocation.
     I've struggled with finding both a definition for and an actual meaning in my work.  What work can I do that is both meaningful and something that reaches out to me?  Is reaching out to me earning money or giving back?  Should I be a social worker or a lawyer who makes money and is able to donate money?  Which is the greater good while also making me reach my calling?
     While here, we've seen several factories with employees, as well as farms, maids who cook and clean for us, and waiters at various restaurants we've visited.
     And I have to wonder at each place, with each interaction, what sort of higher purpose have they found?  How does going through security every day, with constant video surveillance and only one exit, feed into your meaning or purpose?
     How does picking cucumbers by hand in the Mexican sun translate to vocation or calling?
     Maybe, for some, the opportunity to earn a living wage or the opportunity to provide for your family is enough.
     But sewing a particular button on a particular part of a shirt all day, every day, in the way that others tell you to do it so it's the quickest... I don't know.  There's no higher thought process or intellectual capability involved.  Sure, some equipment is dangerous, but for the most part, the job is about doing something that's boiled down to such a science that the efficiencies would make even Henry Ford sick.
     My point being, it's important to note that we are talking about whether we would ever bring operations to Mexico versus China.  What I wonder is, if I did, would (or could) I translate a living wage and meaningful work for my employees?
     Perhaps I should just crack open a beer and head to the jungle with the hammocks and the trees.

-Sital

In the coming days, I'll be posting more from our trips to the many places she mentioned above. Photos, videos, and commentary from other students will help paint a more detailed picture of some of the businesses we've visited, and I encourage you to develop your own opinion about it all.  One of the questions raised throughout the class has been, "Would you open a business in Mexico?"  Take into consideration the benefits as well as the risks of moving operations here, but also think about what values would be important to you, just as Sital has.

Sick days

Here's what happens when you get sick.. Keep in mind they went to a private hospital rather than the public ones:

Daniel, Harvey, and I went to a Merida, Mexico hospital. We asked around for a doctor when we got there and they pointed us toward the emergency room, so we walked over there and asked for the doctor again. Within about 2 minutes of being in the emergency room, I was being looked at by a doctor. After I tried to describe to him my symptoms, he walked out of the room and got one of those masks that people wear to avoid diseases. He looked in my throat and made a funny sound and started writing down prescriptions. Four prescriptions later I was walking towards the farmacia. Within an hour of leaving the house, we had seen a doctor, been prescribed medications, and picked up our medicine at the farmacia. Now, I am sitting here writing this blog after watching/sleeping through [the movies] "Salt" and "Harry Potter," while everyone else went to the cenotes all day.

Getting sick seemed like the fun thing to do this week, so several of us are trying it out.  Poor John and Daniel had to miss out on a cenote today, but hopefully everyone will be able to join us for the ones at Cuzamá on Friday.  Cenote video to come from the well portion of our group soon!

Bullfight!

Because this wasn't our first rodeo, err.. I mean bullfight, Justin, Sital, and I knew exactly what we were looking for-- our favorite little crazies with the fancy jackets that charged the bull.  They are called forcados, and their job is to (quite literally) take the bull by the horns.  It's apparently a great honor to do this, which is why these guys fly all the way over from Puebla and risk their lives for reportedly no pay.  They were definitely struggling a little more this year than would be ideal; you can see it takes them quite a while with the second bull.  Would you do it?

Class Presentations

The students were divided into groups and assigned a variety of topics to research and present to the class.  Presentations began Sunday, and below is a very brief summary of one of the groups' work.  In their own words:

Our group presentation topic was the gap between the rich and the poor in Mexico. Mexico, as a whole, is a fairly wealthy country. However, for many reasons, the wealth is so unevenly distributed between rich and poor that Mexico is one of the most economically unequal countries in the world. Boomer discussed monopolies, and the problems that arise from countries like Mexico that are controlled by them with little to no government intervention. Ryan talked about Carlos Slim, the world's richest man, who makes his fortune basically by owning Mexico. Our research indicated to us that poverty is perpetuated by these monopolies and billionaires, and we feel the government should have intervened years ago and regulated them so that they weren't able to seemingly take Mexico over.

These are a few videos that related to our topic:
Milton Friedman - Monopoly
Mexican policy on poverty
Analysis of Carlos Slim's monopoly

Langostas aren't just lobsters

While at the bullfight, the stadium got infiltrated by a swarm of locusts.. which I'm told the Spanish word for is the same as the word for lobsters. In case you don't believe me, here's a video of what went down, with opinions from two students and a local (our "cultural ambassador" who I am about to fire if he doesn't step up his game):

UPDATE: Apparently, the locusts were just the first of many strange animal events around the world! Have you seen the news? Birds falling from the sky, crabs washing up on shore.. Yahoo! mentions a few of them in an article here.

Hammocks aren't Lauren's friends

Lauren's list of 11 things to know before sleeping in a hammock in the jungle

11. Bring sleeping pills…lots and lots of sleeping pills
10. Bring a pillow…if not your neck will hurt!
  9.  Bring an ipod to sleep…unless you like the sound of wild animals in the jungle
  8.  Pack clothes for cold weather and hot weather because you just never know the temperature
  7.  8:00 bed time…trust me it's not that much fun sitting in the dark not able to see anyone
  6.  Febreze and lots of it…the hammocks smell! But don't worry you'll just add to the smell because you won't be showering!
  5.  If you don't bring sleeping pills-Just know you won't sleep AND if you do you will not find your comfortable spot until about 4 am…just ask Harvey
  4.  Lie diagonal…according to Sital it's the only way to get comfortable
  3.  If you get motion sickness easy bring Dramamine because the hammock does rock back and forth ALL night long…mostly from you or others tossing and turning all night
  2.  Bring lots and lots of bug spray…mosquitoes don't care that you are uncomfortable in a hammock
  1.  If scared of scorpions or tarantulas DO NOT take off your shoes.

On the other hand, I slept like a rock, and so did the other repeat offenders on the trip.. So I guess you just have to figure out how to find your happy place.

En el mercado

Like always, we started off the trip with a quick run through the marketplace in Centro.  Since the marketplace is pretty far removed from anything to which we are accustomed, we made a video with some of the highlights of our little tour. That's below, but if we were to put the experience into words, it would be something like this:

Imagine a US flea market multiplied by a thousand, filled with ... Mayans all speaking Spanish, and you still might not be able to fathom the extent to which these people go about their daily lives.

 -Ryan

La araña discoteca

Courtesy of Sital and NBC's Community, we wanted to provide you with a quick Spanish lesson to help you get in the spirit.