Jeans Maker to Open Mexico Facility

Drawn by cheap Mexican labor and lower trade barriers, a Texas denim processor and jeans maker that is one of the nation’s largest Latino-owned companies plans to open a new facility just north of Ensenada, Baja California, that will employ 1,500.

The move by International Garment Processors of El Paso is the latest example of a broad shift of apparel manufacturers to Mexico to take better advantage of the lucrative U.S. market and avoid the tougher quotas the United States imposes on other foreign makers of apparel.

The company washes, inspects, tags and ships denim garments for a host of clothing manufacturers but does 90% of its work for Levi Strauss of San Francisco. It specializes in “stone washing” to make jeans, jackets and other items look faded, averaging 55,000 garments per day.

Besides Levi Strauss, International Garment Processors also finishes denim clothing for the Gap, Sassoon, Liz Claiborne and Guess.

The company also manufactures a line of denim clothing for the Express retail chain, said founder and Chairman Cesar Viramontes.

The company will invest $22 million in the new site, moving huge washers and dryers there capable of handling 350 pairs of blue jeans at a time, Viramontes said.

The new Ensenada facility will be an expansion of Viramontes’ operations and won’t result in any layoffs of his 925 employees in El Paso. The family-owned company reported $34 million in 1996 revenue, among the top 100 Latino firms.

The cheaper labor and gradual elimination of clothing tariffs under the North American Free Trade Agreement persuaded Viramontes to expand to Ensenada. He said he expects to pay his Ensenada workers an average starting wage of $1.25 an hour--comparable to manufacturing jobs at other border maquiladoras--versus $6 in El Paso.

Employment at the new Ensenada facility could grow to 2,500 in coming years, he said.

“This is a value-added industrial process, not piece work, and that is what we are trying to promote,” said Jorge Gallego, Baja California’s state secretary of economic development.

The plant will go either in a long-abandoned tuna processing plant or a lumber drying plant to be padlocked later this month by Louisiana Pacific, a Portland, Ore.-based timber company. About 200 workers will lose their jobs.

Louisiana Pacific opened its Ensenada plant in 1989 to plane and dry redwood fence boards destined for the Southern California market.

But the scarcity of redwood has gradually reduced the flow of lumber sent south for processing, said Louisiana Pacific spokesman Bill Windes.