Best known for it’s Pacific coast sport fishing, Ensenada is still primarily a tourist destination with a very agreeable climate and only occasional rain. The resort hotels are popular getaways for Southern California’s jet set. The community is predominantly a fishing economy, with stable growth.

POPULATION

• Ensenada is a smaller, seaside, fishing community of approximately 367,573 persons or 14.86% of the state’s population.
• It is located 75 miles south of San Diego and along the coast of the Pacific Ocean. This fishing port, now a popular U.S. tourist destination and resort, lies on the beautiful Bay of Todos Los Santos.

STATE DESCRIPTION

• Baja California Norte, or B.C.N., encompasses the northern half of Mexico’s Baja Peninsula.
• It is a region that depends largely upon its industrial base, commerce, fishing, agriculture and, of course, a booming tourist trade.
• Major cities include Tijuana, the state capital Mexicali, the Pacific Seaside City of Ensenada, and Tecate.

LOCATION

• The westernmost Border State of Mexico possesses a long and beautiful Pacific coastline.
• Ensenada is one of the most beautiful cities in the world, wedged between the Pacific Ocean, the Rocky Mountains and the Valle de Guadalupe, Mexico’s top wine-producing region. The city is a port of call for more than 50 cruise ships a month, bringing more than 385,000 visitors to the city.

REGIONAL INFLUENCE

Best known for it’s Pacific coast sport fishing, Ensenada is still primarily a tourist destination with a very agreeable climate and only occasional rain. The resort hotels are popular getaways for Southern California’s jet set. The community is predominantly a fishing economy, with stable growth.

Maquiladoras grew from smaller assembly shops that were originally in Tijuana and fled the high costs and overcrowding that accelerated in the 1980’s. There are approximately 55 maquilas in the city of Ensenada employing approximately 7,000 people.

Ensenada is trying to become one of the busiest ports in the world. Shipping goods through Ensenada is quick and cheap. The volume of traffic is lower at the Sea Port than that of a normal border crossing. Some Ensenada business leaders estimate Tijuana maquilas could shave 20 percent off their transportation costs if they used the Sea Port of Ensenada.

PROXIMITY TO U.S. CITIES

Once across the border, which is 67 highway miles north to the crossing in Tijuana, trucks find quick Interstate access to Southern California.

The City

DEMOGRAPHIC IMPACT

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WORKER SKILL LEVEL

• Ensenada’s literacy rate is above average for border cities.
• Larger maquilas have not located in Ensenada in the past five years, so there is little reason to expect comparable skill levels with Tijuana.

EDUCATION and TRAINING PROGRAMS

• Ensenada has several technical schools and a university campus supported by a Tijuana faculty.
• Adequate management level personnel is available for local companies.

TURNOVER RATES

• Northbound migration contributes heavily to Ensenada’s turnover.
• Ensenada has a montly turnover rate of Click Here To Register    in comparison with Tijuana, which experiences a monthly rate of 8%.

The Operation

Of all of the manufacturing inputs, labor is the only one less expensive in Mexico. Everything else costs more in Mexico, from shipping to telecommunications, to energy, to real estate, to the cost of capital. Accurate information on labor rates is therefore of paramount importance to any company considering manufacturing in Mexico. Wage rates in Mexico are controversial. The government, in conjunction with union representatives and members of the largest industrial organizations, adjust the minimum wage on an annual or semi-annual basis. There is a minimum wage rate for 88 different "professional classifications" that vary from construction supervisor to shoemaker. Few workers earn the minimum wage, especially in the export-manufacturing sector. 47% of employed workers in Mexico earn more than twice the minimum wage, and 11% earn more than five times the minimum wage. The minimum wage in Mexico is in reality a benchmark or reference wage, used by the government to direct increases in salaries that are congruent with its monetary and fiscal policies. The wage rates below are the product of a survey done by the state government on certain industrial parks.

WAGE RATES

Average hourly wages (fully burdened) paid in Ensenada manufacturing:

(U.S. dollars per hour)

Source: CIEMEX-WEFA, Maquiladora Industry Analysis

INDUSTRIAL COSTS

Source: Mexican Dept. of Energy and B.C.N. State Government (1999)

Costs increase 1% per month

Fossil Fuels USD @ 9.65

Costs increase 1% per month

INDUSTRIAL REAL ESTATE

A current survey of three industrial parks in Ensenada with a variety of site options reveals the following average prices:

Source: Mexican Dept. of Energy and B.C.N. State Government (1999)

INFRASTRUCTURE

• A Four-lane highway to Tijuana provides access to supplier base.
• Truck rates are similar to carriers in Tijuana
• There is a rail link from Ensenada to Tijuana and other Mexican cities.
• An important seaport, due to its major commercial activity, is located in Ensenada.
• Industrial Parks, are available with all services necessary for manufacturing including water, electricity, natural gas and fiber optic telephone services.

CUSTOMS

Most shelter operators and maquilas depend upon the Mesa de Otay crossing located in Tijuana. The limited traffic does translate into fewer delays, although the crossing is not staffed adequately at all times. A seaport customs service is offered in Ensenada.

TAXES

• Baja is considered a Free Trade Zone by the Mexican Government, a designation roughly similar to an U.S. Foreign Trade Zone.
• Maquiladoras pay B.C.N. State taxes, 2% of the base wage paid.

The Support

SERVICE and SUPPORT COMPANIES

The service and support capacity of Ensenada is severely limited. Most shelters must rely upon Tijuana and San Diego based support companies.

The Politics

UNIONS

Unionized labor in Ensenada realized in the past their actions only worked against them. Therefore unions no longer represent a major impediment to new starts or expansion.

OTHER BIG NAMES

ADVANTAGES

New areas offer better facilities and infrastructure than before.

• Labor costs are lower than in Tijuana.
• Highway to Tijuana expands support capabilities.
• The port of Ensenada is presently being upgraded and is Mexico’s third largest.

DISADVANTAGES

• Low level of skilled labor.
• The tourist season crimps the work force.
• There is limited infrastructure for large manufacturing operation.
• The small size of a labor base will inhibit support for a complex manufacturing operation.

Conclusion

Ensenada is only a viable option for the smaller maquila functions that a shelter operator can provide. Large maquila operations are better situated elsewhere such as Tijuana and Mexicali.