Contorting transformations: Uneven impacts of the U.S.–Mexico automotive industrial complex

Abstract

Contrary to the triumphalist rhetoric that describes the automotive industry as a lever for both regional development in North America and industrial upgrading in Mexico, this article argues that the formation of the Mexico–U.S. automotive complex has instead been consolidated on the basis of longstanding processes of uneven regional development. To make this argument, the paper examines how global economic restructuring, trade policies, domestic economic development processes, transnational firm decision making and the maintenance of the geopolitical border have reproduced extreme wage differences between the United States and Mexico, resulting in the creation of a regional automotive sector that is both highly integrated and highly unequal. In this scenario, both nations are home to profoundly different industrial landscapes: the U.S. hosts the highest value-added links of the production chain, monopolizing processes of innovation and scientific and technological knowledge production, while in contrast, Mexico manufactures the most labour intense and lowest value-added links of the automotive production chain. From this perspective, the Mexican economy can be essentially understood as an export manufacturing platform which derives its ‘competitiveness’ from the aggressive industry maintenance of low wages.