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9110: Assmbling vs Manufacturing (fwd)
From: Lance Durban <firstname.lastname@example.org>
The recent article posted by Kevin Pina from The Black World
Today cites the following:
Haitian assembly factories, which employ more than 20,000
workers, last year exported 245.1 million dollars worth
of clothes and electronic equipment to the United States.
In 2000, this industry accounted for 7.2 percent of the
gross domestic product (GDP).
It would be nice to draw a better distinction between 'assembly'
factories and true 'manufacturers'. The former receive raw
material on consignment from a (generally U.S.) customer,
assemble it and ship back to the States, billing only for the
labor added. On the other hand, manufacturers (of which there
are precious few in Haiti) purchase raw material abroad, bring
it to their plant, build a product, export and bill for it.
If a sewn garment has 80 cents of material and 20 cents of
labor, the assembler will bill his U.S. customer 20 cents. A
Haitian manufacturer, who has gone through the effort to
purchase and import the fabric will bill his U.S. customer
$1.20. That's right, the mark-up on the material may equal the
value of the labor added.
To get back to the quotation cited above, a couple of points:
1) I would like to see a list of the companies employing
those 20,000 workers. What is the breakdown by industry?
And how many assemblers are there relative to
2) The $245 million in exports refers to the value of the
products but must INCLUDE raw material. Since most Haitian
industry is assembling rather than manufacturing, a good
part of this money never gets to Haiti, nor should it
since the Haitian entity did not take the risk in
laying out dollars for the raw material in the first place.
My own experience indicates that the ratio one can derive from
the employment figure and export values cited in the quotation
is, at the very least, misleading. If 20,000 people in the
assembly sector export product worth $245.1 million only a
fraction of that value will get back to Haiti.
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