The Arrival of Tesla in Mexico is Not What it Seems.
Will there be benefits? Yes, definitely, but only for a very small group of people. The fantasy of economic overflow is similar to what happened when Amazon opened a plant in Tijuana. If you look at the recent photos of the Amazon plant, it looks like scenes from the movie Elysium, where there is a giant, automated plant producing robots of the future while outside there are shanties made from recycled cardboard and metal sheeting. This is not what people envisioned when they were hoping for a utopia to arise from the arrival of Amazon or Tesla in our country.
The great benefit that Tesla generates as a company does not stay within Mexico because it is not a national or Mexican company. Secondly, there will be some job creation, but what kind of jobs? Firstly, Tesla has already announced that it is interested in and is already highly invested in the automation of its own production facilities. The intention is that Tesla plants function at over 90% automation capacity. So when people think of a giant car manufacturer, the fact that it is over 90% automated is what they should be considering. Additionally, true intellectual capital and technology patents will not be developed in Mexico but will continue to be developed in places like Silicon Valley in California or the United States.
Would New Jobs Be Created In a Plant with 90% of Automation?
In terms of jobs, this will mean low-added value employment, perhaps some intermediate-skill jobs, but ultimately, the jobs will not be high-paying positions with a long shelf-life. The production of vehicles consumes a lot of water, and Monterrey just recently suffered a severe water crisis, so this is yet another negative factor to consider.
Finally, the best possible outcome would be fiscal revenue for the government, but unfortunately, these negotiations often result in many years of tax breaks for the companies. So while there will be benefits for a small group of people who own the factories that will be supplying Tesla with products to assemble their cars, the owners of the land on which Tesla plants will be built, and the construction companies that will develop and produce all the necessary infrastructure, there will not be any direct salary increases for the state’s workers. The only thing that will effectively increase is the profit margins of those who already own the means of production and are already selling land, machinery, and raw materials.
The arrival of Tesla in Mexico should be celebrated, undoubtedly they will create some positive effects, but we must constantly keep a critical eye to see all the consequences and unintended effects it may cause.
Additionally, we must be acutely aware that historically, the idea of economic overflow is a great lie, both politically and economically, and hand-in-hand with neoliberalism.
