The extension of the road system formed a key ingredient of the Mexican economic miracle. Highways allowed the rapid transport of goods between major cities and extended sales into areas not reached by rail. Road construction facilitated Mexico’s superb bus service, which to this day is light years ahead of its U. S. counterpart.
A wide variety of interests favored building roads. Mexican manufacturers sought roads to get their products to market and to lower the cost of bringing food to their workers. The U. S. auto industry, Mexican auto dealers, and Mexican construction companies also favored road construction. In 1947, U. S. Ambassador to Mexico Walter Thurston commented on how the Mexican auto industry benefited the United States when advocating a loan to Mexico for road building:
American export trade will be benefited in many ways by the augmentation of these communications facilities between the two counties, in addition to the direct benefit deriving from the sale of additional road construction machinery, filling station equipment, et cetera. Additional sales to Mexico of automobiles, trucks, parts and accessories are only some of the items which are bound eventually to enter in larger volume by reason of the additional mileage added to the highway system.36
The extension of roads stimulated the Mexican automobile industry. In 1961, twelve companies assembled 40,000 autos, compared to only four companies in the far larger U. S. market. Auto dealers distributed forty-three brands and 117 models. Auto assembly involved very little actual manufacturing. Rather, parts were imported and assembled in Mexico. Imports were so pervasive that assemblers joked that they even imported air to inflate tires.37
In 1962, the Mexican government decided to restructure the auto industry since it considered there were too many models for the small Mexican market and that importing parts, rather than manufacturing them in Mexico, cost jobs. The auto sector alone accounted for 10 percent of imports. The government announced it would limit to seven the number of auto manufacturers and require
That 60 percent of the value of each car be manufactured in Mexico. The government also sought to eliminate costly annual model changes, limit the number of models sold in Mexico, and produce standardized parts through the entire Mexican auto industry.38
Mexico immediately came up against the power of not only the multinationals but also their home governments. Nissan was allowed into the Mexican market after the Japanese government threatened to cease buying Mexico’s number one export, cotton, if Nissan was excluded from the Mexican market. U. S. Ambassador Thomas Mann informed the Mexican government that the exclusion of any U. S. auto firm that had been operating in Mexico would be viewed unfavorably by the United States, so the U. S. Big Three were allowed in. Auto manufacturers mobilized domestic auto dealers and parts vendors, threatening to pull out of Mexico entirely if they were not allowed to make their own manufacturing decisions.39
Due to pressure from corporations and foreign governments, Mexico backed down on standardizing parts and limiting the number of auto makers, the number of models, and annual model changes. The Mexican government did achieve its goal of 60 percent local content. The content rule alone produced major changes. Between 1962 and 1966, the number of workers in the auto parts industry increased from 29,000 to 52,000, and investment rose from $160 million to $448 million. Increased auto parts manufacturing stimulated glass, steel, aluminum, paint, plastics, and machine-tool production.40
World History
