Assembly plants

Assembly plants are factories located all over the world that bring together materials and machines to produce PRODUCTs. They are typically located where there is access to large numbers of low-cost workers. MAQUILADORAS, assembly plants located in the northern part of Mexico, take materials and parts produced around the world and produce components and final goods primarily destined for the North American marketplace. The primary manufacturer or a local production management company that agrees to manage PRODUCTION for another firm may own assembly plants.

Textile factories are another typical example of assembly plants. Textile equipment is relatively easily shipped and assembled anywhere in the world. Examination of labels in almost any U.S. clothing store will show that the clothes are made in Mauritius, Mongolia, Mexico, or the Northern Marianas. Entrepreneurs shift assembly-plant textile production based on cheap labor, transportation, and TARIFFs. Changes in international trade laws and regional ECONOMIC CONDITIONS frequently result in new, low-cost centers of assembly-plant production. Often developing countries initially expand their export production based on assembly plants. As market opportunities and workers’ skills improve, they move into higher, valueadded products for global markets.