Scenario: Blickinstock at the Crossroads
Auto parts supplier, Blickinstock Ltd., would like to expand its presence in Latin America. To that end, Blickinstock is trying to decide whether to purchase an existing company in a remote region of Argentina or build its own subsidiary. Keith Moon, Blickinstock's vice president of global business development, will be making a presentation to the board outlining the company's options.
-One board member has asked about the maquiladora industry, which refers to ________.
A) Mexico's low-cost labor unions
B) the cross-border drug trafficking problem that threatens to limit legitimate production in Mexico
C) the low-wage, 130-mile-wide strip along the U.S.-Mexico border
D) Latin America's new model for business that allows foreign investors to take advantage of government incentives designed to attract foreign direct investment

Question

Quizplus · Accepted Answer

The maquiladora industry is a manufacturing operation in which factories in Mexico, particularly within a low-wage, 130-mile-wide strip along the U.S.-Mexico border, import materials and equipment on a duty-free and tariff-free basis for assembly, processing, or manufacturing, and then export the assembled, processed, or manufactured products, sometimes with a portion of the value-added by the Mexico-based operation, back to the country of origin. It is not relevant to Blickinstock's expansion plans in Argentina.