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.Daniel had a similar reaction to our visit:
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.
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.
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