WASHINGTON -- The Warnaco Group will open its fourth bra assembly plant in Mexico today.
The venture illustrates the growing appeal of Mexico under the North American Free Trade Agreement, and represents a move for Warnaco's expanding sourcing outside the Caribbean, where offshore bra manufacturing has been booming.
"If it's a question between opening a factory in the Caribbean or Mexico, it's Mexico," said Linda J. Wachner, Warnaco's chief executive officer, in a telephone interview Wednesday from her New York office before departing for Mexico.
There she will the attend the ribbon-cutting for the new factory, located in Tlaxcala, about two hours east of Mexico City, a ceremony that will include an appearance
by Mexican President Carlos Salinas de Gortari.
Wachner, a long-time booster of free trade with Mexico, said a fifth Mexican assembly operation will be added in early 1995 in the town of Puebla, the country's textile center, southeast of the capital.
The 140,000-square-foot factory in Tlaxcala will employ 2,000 workers, who will fashion American-made and -cut materials into bras for Warnaco's Olga, Fruit of the Loom and Warner's lines.
Wachner expects that 1 million dozen bras annually will be produced at the factory and shipped to the U.S. and other foreign markets for sale. The company's three other Mexican bra assembly factories sew a total of about 1.4 million dozen bras for shipment outside of Mexico. Another factory does full production of bras for the Mexican market.
Until NAFTA went into effect on Jan. 1, Warnaco's Mexican assembly plants operated under special U.S. trade programs giving quota and duty breaks for goods sewn from U.S.-made and -cut materials. Now, under free trade, these shipments are completely duty- and quota-free because bras were among the first apparel items to receive total NAFTA benefits.
In the Caribbean, where until now Warnaco has focused its production expansion, there remains an effective duty rate equal to about 5 percent of a bra's value. This lower than usual tariff is based on a trade program similar to the one Mexico previously operated, under which the typical U.S. duty rates on bras of 18 percent and 32 percent are reduced, to be levied only on the value added during assembly.
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