What happened when factory jobs moved from Warren, Ohio, to Juarez, Mexico



Chris Wade reached into the darkness to silence his blaring alarm clock. It was 4:30 on a frigid winter morning in Warren, Ohio, and outside a fresh layer of snow blanketed the yard.

Thank God, Wade thought to himself. He would be able to get out his plow and make some quick cash.

Money never used to be a problem for Wade, 47, who owned a house with a pool back when he worked at Delphi Automotive, a parts manufacturer that for years was one of the biggest employers in this wooded stretch of northeastern Ohio. But 10 years after taking a buyout as part of Delphi’s ongoing shift of production out of the United States and into Mexico and China, the house and the pool were gone.

Berta Alicia Lopez, 54, is the new face of Delphi. On a recent chilly morning, she woke before sunrise on the outskirts of Juarez, Mexico, and caught an unheated bus that dropped her an hour away at the Delphi plant.

Lopez earns $1 an hour assembling cables and electronics that will eventually be installed into vehicles — the same work that Wade once did for $30 an hour. A farmer’s daughter who grew up in an impoverished stretch of rural Mexico, Lopez is proud to own a used Toyota sedan and a concrete block house.

She frequently thanks God for the work, even if it is in a town troubled by drug violence, even if she doesn’t see many possibilities for earning more or advancing.

The two workers live 1,800 miles and a border apart and have never met. But their stories embody the massive economic shift that has accompanied the rise of free trade.


This is unfortunately nothing new for the Youngstown/Warren area. It’s been happening since the 1970s.


There has to be reasonable compromise. 30 dollars an hour, plus another 30 for benefits and taxes, is too much for unskilled labor. But GM didn’t need to move those jobs out of the US.


What none of these articles mention is, when these factories open up in Mexico and it happens to be in cartel controlled territory, they are forced to pay ‘operating fees’ directly to the cartel.

Ive seen this personally, involving a large US plastics company, after teams of lawyers and consultants worked out the details, they ended up having to write a single check to the cartel, in order to avoid monthly payments that would likely be increased over time. This is actually commonplace nowadays, they even have specialists that their only job is to facilitate a better deal for the factories.

Its not discussed in the US media because there is still a law on the books about giving money to an entity that is recognized as a terrorist organization.


If someone will do your work for one dollar an hour, you need to find new work.

Globalization doesn’t just affect manufacturing. Knowledge workers are affected as well. There is a good book to read on this - it’s big, but is very interesting.

That Used to be Us: How America Fell Behind in the World It Invented and How We Can Come Back is a non-fiction book written by Thomas Friedman, a Pulitzer Prize-winning New York Times columnist and author, with Michael Mandelbaum, a writer and foreign policy professor at Johns Hopkins University.


So we just have your word as an expert that US payments to drug cartels is commonplace, even though “it is not discussed in the media”? Did you handle the payoff? Of did someone in the company just tell you about it? I suspect a rumor, not fact.


US government and corporate policies make this kind of shift economically inevitable. The solution is not socialism or unbridled capitalism. The solution would be distributism. Repeal the heavy regulatory and taxation burden on small businesses. Suppose an economic function can only be accomplished by 1000 workers in a factory, and cannot be done by a small business; this would be relatively few. Then let these 1000 workers share ownership in the this, one factory company. There would be no stockholders who never see the factory.

There would be no union, or rather, the whole place would be a union. The wages would be set by the workers/managers themselves, based on what is economically feasible. If distributism were applied across the board, the taxes on this entity would be reduced because government would be reduced, especially less money going to distant Washington, or distant state capital. With no money getting sent out to out of town corporate headquarters, or out of town international unions, they might well be somewhat competitive with other countries.

But the biggest change would be increase in self employment and small businesses. People tend to be far more efficient taking care of their own shop, or a shop with only a few employees, than in massive operations they have no control over. This increased efficiency makes it better for people in general in that community.

At present, government and sometimes employers subsidize day care, as long as the day care providers are not the parents. This is ridiculous. In distributism, it would be possible for some (not all) mothers to choose to stay home, at least part time. Some would not choose that option, but at least there would be fewer economic penalties if they chose to take care of their own child, rather than putting their child in day care so they could work - perhaps at a day care.


I don’t know about drug cartels exacting money from corporations. Wouldn’t surprise me, and perhaps we’ll see some references.

But I have talked to Mexican nationals about what it’s like to deal with a corrupt police force there. They arrest you for something or for nothing, assess a fine right then and there, and collect it. They know when all the factories end their shifts, and “rotate” among the employees so the same people don’t get hit week after week. Equal opportunity corruption.

If that’s how it is on a small scale, and with the police, there’s little reason to think it doesn’t happen on a larger scale and with more sinister entities.


I’ve actually heard similar on a recent trip to Mexico. In some areas the cartels are almost like the civil government and it’s not good.


No, a family member was one of the lawyers involved and my ex-wife was childhood friends with the owner of this particular company.

You do not have to take my word for it though, you can search and find consultants and lawyers that specialize in these deals. Its just part of doing business in these parts of Mexico.

The US companies pay to avoid violence being done to the Mexican workers at the factories.


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