Question

Amy, the CEO of a large manufacturing organization, knows that many of her competitors have closed their American factories to utilize production facilities in Mexico because labor is cheaper there and they receive special privileges in return for employing Mexican citizens. However, Amy refuses to shift her operations down south, believing that it is important to keep jobs in the U.S., despite the cost savings. These manufacturing plants that are allowed to operate in Mexico, with special privileges in return for employing Mexican citizens, are known as ________.

1) Internationldoras
2) Outsourcing
3) Offshoring
4) Manufacturing hubs

Answer 1

The manufacturing plants in Mexico that employ Mexican citizens with special privileges are known as maquiladoras. These factories take advantage of lower labor costs and relaxed regulations to produce goods, mainly for export back to the U.S., impacting American manufacturing jobs.

Step-by-step explanation:

The manufacturing plants that are allowed to operate in Mexico, with special privileges in return for employing Mexican citizens, are known as maquiladoras. These are foreign-owned factories that import raw materials or components and utilize local labor for manufacturing, assembly, or processing. The finished products are usually exported for profit, often back to the United States.

Maquiladoras benefit from lower labor costs and less stringent environmental and labor regulations, allowing them to operate more cheaply than equivalent facilities in the United States. However, the relocation of these manufacturing jobs to Mexico through offshoring has had a significant impact on the U.S. labor market, particularly in the loss of high-paying industrial jobs.