Industry, Banking and Finance in Mexico

u Francisco Javier Rodríguez Gutiérrez u

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Industria, Comercio, Banca y Finanzas en Monterrey, 1890-2000

UNIVERSIDAD DE MONTERREY Rector Dr. Antonio J. Dieck Assad Vicerrector Académico Dr. Fernando Mata Carrasco Director de la División de Derecho y Ciencias Sociales Dr. Arturo Azuara Flores Director del Centro de Estudios Históricos Dr. Óscar Flores Torres

Industria, Comercio, Banca y Finanzas en Monterrey, 1890-2000 Industry, Commerce, Banking & Finance in Monterrey, Mexico (1890-2000) Primera edición: agosto de 2009.

Segunda edición: septiembre de 2011.

Diseño de portada e interiores: Diseño3 / León García Dávila, Erika Rojas Sierra, Yvette Bautista Olivares.

Imagen de portada: Banco Mercantil, Mty. 1920. Manuel M. López © Óscar Flores Torres © 2011 Centro de Estudios Históricos UDEM © 2011 Universidad de Monterrey Av. Morones Prieto 4500 Pte., San Pedro Garza García, N.L., México, C.P. 66238 Conmutador: +52 (81) 8115-1000. Lada sin costo 01-800-801-UDEM http://www.udem.edu.mx/ceh Quedan rigurosamente prohibidos, sin la autorización escrita de los titulares del “Copyright”, bajo las sanciones establecidas en las leyes, la reproducción parcial o total de esta obra por cualquier medio o procedimiento, comprendidos la reprografía y el tratamiento informático, y la distribución de ejemplares de ella mediante alquiler o préstamo públicos.

Industria, Comercio, Banca y Finanzas en Monterrey 1890-2000. Industry, Commerce, Banking & Finance in Monterrey City, 1890-2000, es un libro editado por el Centro de Estudios Históricos de la Universidad de Monterrey.

La publicación de este libro, fue financiado con el Fondo del Programa de Investigación UDEM 2010, bajo el rubro intitulado: LA UDEM EN EL BICENTENARIO Y CENTENARIO: HISTORIA ECONOMICA DE MEXICO SIGLO XIX-XX. El contenido y las opiniones vertidas en esta obra y su publicación son de entera y exclusiva responsabilidad de su autor y no comprometen a los editores del mismo.

Impreso y hecho en México Printed and made in Mexico ISBN Primera edición: 978-970-95040-1-9 ISBN Segunda edición: 978-607-8077-10-6

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The beginning,

1890-1910

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Industry, Commerce, Banking & Finance in Monterrey, Mexico (1890-2000)

Cerro de la Silla, Mty., CA .1900.

C.B. White.

Banco Mercantil, Mty., 1920.

Manuel M. L贸pez.

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The beginning, 1890-1910

he onset of industrial capitalism in Monterrey that began in 1890, and had grown significantly by 1900, brought a deep change in the performance of an economic system where the manufacturing industry secured its position as the dominant sector in the century, changing our society into one where the entrepreneur and the blue-collar worker have been reaffirmed as the most prominent players in the social structure. In 1890 - 1910 the city’s grassroots industry founded in Monterrey launched an industrial revolution (Flores, 1991 and Vizcaya, 1971). Among the considerably large number of factors that define this industrial takeoff, we essentially find two. The first one consists of the soundness maintained by the Mexican domestic market after it meshed in a considerable extent with the market beyond the Rio Grande; and the second may be found to be conditioned by the national socioeconomic policy of the Porfirio Diaz liberal regime implemented in the region by General Emeritus Bernardo Reyes, governor of Nuevo Leon in 1885 - 1909. The groundwork for this industrial takeoff stems from the railroad junction (1882-1891) that crisscrosses the city of Monterrey through the four cardinal points and connects it to one of the most powerful markets in our planet through the Texas border towns Piedras Negras and Laredo. The advent of the telegraph in 1881 and the telephone at the turn of the century, expedited business transactions. These historical milestones permitted the earliest systematic inflow of American investments into our region (Flores 1994). Industrial developed was further supported and fostered by the Nuevo Leon State Government. The state legislation assured considerable state and local tax exemptions to any businesses that were considered of public benefit, and facilitated their strategic location close to utilities, roads, and urban infrastructure, among other benefits (Benavides, 1999 and Flores 1991). Capitals previously amassed in Nuevo Leon through different

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sources, such as the opportunities provided by the American Civil War (1861-1865); smuggling -which received a death blow in 1870 with the Contrarresguardo Federal Law-, and finally speculation, appropriation, and a relative exploitation of the land, converged to trigger a development never before conceived by any Mexican town (Flores y Olvera, 1988). In 1910, the two largest smelters and the only steel mill in Latin America- all based in Monterrey- generated an income of 300.4M pesos versus the 5.7M pesos earned by the farming sector in the State as a whole (Flores, 1991).

By the middle of the first decade of the 20th century, Nuevo Leon was the largest producer of industrial commodities in the country, at a rate of 13.5%, exceeding the rates of 11.7% and 11.2% accomplished by the Mexico City Metropolitan Area and the State of Mexico, respectively (Rosenzweig, 1974).

The industrialized economy flourished in a climate of social, political, and economic fellowship without precedents among the major community players in Nuevo Leon. The best example was a reception for President Porfirio Diaz in December 1898 during his only official visit to Monterrey, which had been recently labeled by Andres Molina Enriquez as “the city of the blazing industries” (Molina, 1910). On that occasion, a grand ball organized in his honor took place at the Casino de Monterrey on the December 21 1898. The two masters of ceremonies were the current mayor and prominent businessmen Adolfo Zambrano -son of Gregorio Zambrano- and Francisco G. Sada, manger of the largest brewery in the country: Cerveceria Cuauhtemoc. Sitting besides the President at the table of honor, were Governor Bernardo Reyes and the secretaries of Treasury and Interior [Gallant Division Generals, Veterans of the War against Maximillian and former Secretaries of Defense Division General Mariano Escobedo, Division General Geronimo Treviño, and Division General Francisco Naranjo, were distinguished guests (La Visita..., 1898 and Perez Maldonado, 1950)].

Free from raids by hostile nomad tribes (the last attack was in the 1860’s), and driven by the business boom, the Monterrey urban center underwent a dramatic change. The busy business core grew to the surrounding factories and the vicinity of the railroad depot, which continued extending its branches to the metal-processing factories. The large steel mills had their takeoff in 1890 (Flores, 1993, Rojas, 1997, Torres, 2006 and Vizcaya, 1971). Minera, Fundidora y Afinadora Monterrey, better known as the Number 2 Smelter, managed to get a 20-year tax exemption. Minera, Fundidora y Afinadora Monterrey started with a capital of 600 thousand pesos and had raised it to eight million by 1904. The Number 3 Smelter, later known as the American Smelting and Refining Co. (ASARCO), was favored with a similar tax benefit. This business was totally funded by American capital contributed by the Guggenheim family. In 1909, its estimated capital was 10M pesos, with a processing capacity of 400 thousand tons of ore per year. Jointly with the Number 2 Smelter, it provided employment for more than 1,600 workers.

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The third largest manufacturer in this category was Cerveceria Cuauhtemoc, founded under a franchise from the Nuevo Leon State Government conferred on December 16, 1890 to local entrepreneur Isaac Garza and his American colleague J. M. Schnaider. With an initial investment of 125 thousand pesos, the business was incorporated with the purpose of manufacturing ice and “beer to export” and was exempted from taxes for a period of 12 years. Operations started by the end of 1891.

Initially, the annual production of the brewery was 60 thousand barrels of beer and 8 thousand tons of ice. The company’s expansion benefited from the social and political stability that the extended regime of Don Porfirio Diaz provided. By the year 1900, its capital had grown to 2M pesos, and by 1909 it officially reached the 5M mark. By the end of the Porfirio Diaz administration, the local brewing industry had an installed capacity for 300 thousand barrels of beer per year. It filled 300 thousand bottles and produced 750 tons of ice per day, with a labor force of 1,500.23 New companies emerged in the dawn of the revolution, including Cementos Hidalgo (founded at the Hidalgo Municipality in 1905), which by 1913 had a capital of 2M pesos; and Compañia Vidriera de Monterrey, S.A. (glassworks) founded on December 28, 1909 with Isaac Garza and Francisco Garza Sada representing the stockholders (its predecessor, a company by the name of Fabrica de Vidrios y Cristales de Monterrey was founded in 1899 and shut down four years latter). In 1906, Joel Rocha and his brother-in-law Benjamin Salinas established a wooden furniture and brass-bed factory, the parent of what would become one of the largest and oldest chain retailers in Mexico: Salinas y Rocha. These pioneer companies were later joined by the old textile operations Fabrica de Hilados and Tejidos de Algodon La Fama de Nuevo Leon, founded in the Municipality of Santiago in 1871; 23 Production soon exceeded the domestic demand and large shipments were exported to the United States, Cuba, and Central America (Flores, l991A). This company’s products earned international recognition in many places. The following events are among them: Chicago World Fair (1893), Saint Louis Missouri World Fair (1904); Milan World Fair (1906) and Antwerp World Fair in 1907. That same year, the Cuauhtemoc Brewery was invited to preside the International Beer Judging Panel in the Madrid International Exhibition; and in a special ceremony King Alfonso XIII appointed it Royal Supplier and authorized the company, according to Isidro Vizcaya (1971)- to use the Royal Coat of Arms on its invoices and the label of its different products. The first successful brands were Carta Blanca, Bohemia, Cuauhtemoc (later renamed Indio), Estrella, Salvator, and Saturno. By 1912, the brewery produced more than 16 million liters of beer per year. Its Board of Directors - until the onset of the civil war -continued to be integrated by IsaacGarza as Chairman; Jose A. Muguerza as Secretary; Jose Calderon as Treasurer; Jose M. Schnaider as alternate member; Alberto Sada as Auditor; and Francisco G. Sada as General Manager (Vizcaya Canales, 1971).

After undergoing the bitter times of the armed struggle during the Civil War - and being confiscated for eight months by the radical Constitutionalist administration of General Antonio I. Villarreal, Governor of Nuevo Leon in March 1913 - January 1914-, the brewery had a new expansion period (Flores, 1991 and Ridaura, 2006). As for Its skilled labor requirements, which depended on foreign technicians, were met by with the creation in 1911 of the Escuela Politecnica Cuauhtemoc; which soon began to teach elementary education, arts and trades, electricity, refrigeration, fermentation systems, physics, chemistry, business, agriculture, and veterinary. This new breed of brewery employees who lived through the chaotic revolutionary decade, founded a mutual assistance worker’s association: Sociedad Cooperativa de Ahorros e Inversiones para los Operarios y Empleados de la Cerveceria Cuauhtemoc, S.A. (Savings and Investment Cooperative Society for the Operators and Employees of Cerveceria Cuauhtemoc.), March 30 1918 (Garcia Naranjo, 1990, Rojas, 1997, and Trabajo y Ahorro, 1990,1985). With the initial purpose of being a supplier of staples at discount prices for the company’s employees, this organization grew into (the multi-purpose service organization) Sociedad Cuauhtemoc y Famosa (SCYF).

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Fabrica de Hilados y Tejidos La Leona, founded in Garza Garcia in 1874; and Ladrillera Monterrey founded in Monterrey in 1891 (Flores, 1991).

In the turn of the century, wholesalers and retailers interacted with the manufacturing businesses. By the end of the Porfirio Diaz administration, it was estimated that the aggregate capital invested in these businesses in the State of Nuevo Leon was 40M, 30 of them spread across 1,110 different establishments in the city of Monterrey alone. The large majority of manufactures sold in Monterrey were made by the local industry, and regional farming produce was sold in grocery stores or popular markets such as Mercado Juarez. Among other items, staples included bolts of cotton and wool fabric, soap, lump brown sugar (piloncillo), refined cane sugar, corn, ixtle (desert palm) fiber, liquor, beer, pelts, and steel products, among others. According to the 1900 census, only 40 traveling salesmen, called “pacotilleros,” worked in the state capital (Mendirichaga, 1983).

Nevertheless, the most outstanding development accomplished by the Monterrey entrepreneurs was their joint venture in the foundation of the first steel mill in Latin America: Fundidora de Fierro (Iron) y Acero (Steel) de Monterey –incorporated in 1900 and in full production by 1903– owned by the most prominent local families and a minimum foreign capital from the Frenchmen Leon Honorat and Leon Signoret, the Spaniard Antonio Basagoiti, and the American Tomas Braniff. With an initial investment of 10M pesos, the founders could afford the luxury of acquiring the most sophisticated machinery, such as a Bessmer converter -which directly transforms cast iron into steel-, and Siemens-Martin steel furnaces capable of producing steel with cast and low-carbon iron. Its output was almost totally absorbed by the fast-growing domestic market, mainly the railroad business expansions. A totally different situation, if we compare it to the time of the Revolution (1910-1920) when, temporarily severed from sources of supply and consumption, production unavoidably went to war weapons factories in the American market. In the Mexican Independence Centennial (1910), this company employed an aggregate of two thousand people in its different departments (Flores 1991). These large enterprises were the catalyst of a growing number of carpentry, forge, and other durable goods factories and workshops. There was also on increase in utilities and public works. Industry, above all mining and manufacturing, tended to become a sound and lucrative businesses.

Local entrepreneurs, particularly new small and medium-sized businesses, were important players. In short, as of that year, the local: foreign capital ratio in the industrial sector of Monterrey was greater than in any other place in the country.

Native businessmen owned almost 20M pesos in stock at the beginning of the century, versus 3.4M dollars held by Americans –of which 2.5M belonged to the Guggenheims–, and 400 thousand dollars to Europeans (Flores y Cerutti, 1997).

Monterrey manufacturers were recognized in their own fields as the Mexican

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cutting edge operators, as demonstrates this extract from the memoirs of the Mexican Treasury for 1910-1911: [...] to extract iron from our rich and abundant deposits, processes vary from the primitive Catalan approach, such as the small iron foundries in the Oaxaca mountains and other locations, where 30 or even 40 percent of the ore is lost, to the blast furnaces operating in Monterrey and [...] both represent and summarize the metallurgic endeavor of the better part of a century (Memoirs of Secretaria de Fomento, 1912: X).

The sumptuous centennial celebrations could not provide a more splendid backdrop to commemorate, with great joy, a significant cycle of economic progress. Yet, the breakthroughs accomplished by Monterrey led it to become the prototype of the mythical city of Expressionism: a mechanized and gloomy energy grinder.

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San Francisco Church, Monterrey, 1900.

Carlos García Pérez Maldonado, Narraciones Históricas Regiomontanas, 1961.

Compañía de Luz Eléctrica y Fuerza Motriz de Monterrey, CA. 1903.

Nuevo León de cara al siglo XXI, Gob. de Nuevo León, 2005

Monterrey in 1934.

Márquez y Barros, Mapas, Revista de Turismo, Sep., 1934.

Palace of Government of Nuevo Leon built in 1900.

Roberto Ortíz Giacomán, Nuevo León de cara al siglo XXI, Gob. de Nuevo León, 2005.

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Revolution and National Reconstruction,

1911-1940

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Aerial view of the Cristaleria.

Nuevo Le贸n de cara al siglo XXI, Gob. de Nuevo Le贸n, 2005.

La Industrial, CA, 1929.

Fototeca del Centro de las Artes, Fondo Carlos P茅rez Maldonado, Monterrey.

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1. The entrepreneurs and their organizations

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he fall of the old regime and the intrusion of the revolutionary movement that disrupted business activities caused a prompt reorganization of the manufacturers and other businessmen of Nuevo Leon. As a consequence, the activities of the Monterrey Chamber of Commerce (CANACOM) were resumed by the end of 1911, after 12 years of inactivity. This type of organizations had a national legal status since 1908, with the creation of the first Law on Chambers of Commerce legalizing this collaboration between public and private entities. In fact, the Chambers of Commerce not only gathered small and large businessmen, but also -and Monterrey’s case is an illustration- landowners, mine owners, and promoters of financial and industrial development. Therefore, it comes as no surprise that in May 1921 a group of leaders constituted, through a merger, an organization that would become the apex of the Monterrey business sector: the National Chamber of Commerce, Industry, and Mining of the State of Nuevo Leon (CANACOIM), which prevailed until the early 40’s. It was thus that industry, commerce, and finance entrepreneurs transformed it, up to that time, into the extremely strong organization that would cope with the social, economic, and political havoc that the armed movement brought. Other, smaller, organizations should likewise be mentioned here, such as Union de Comerciantes al Menudeo y Pequeños Industriales (Retailers and Small Manufacturers Society), founded in 1921; and Camara de Propietarios de Nuevo Leon (Chamber of Nuevo Leon Landowners), created during the Revolution (Flores y Olvera, 1988 and Snograss, 1996 and 2003).

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Throughout these years, the CANACOM always showed evidence of a strong drive for political leadership; and went as far as taking over the local state administration in times of a power void. During its direct administration of governmental functions –a historical milestone of the revolutionary process–, it temporarily managed everyday issues involving the Post Office, City Council sessions, law enforcement, and the like. At times of shortage, it imported corn and controlled the distribution of food commodities –at a low price and sometimes free of cost– through the creation of distribution centers in Monterrey and throughout the State. The “businessmen commune,” as it was called during the city administration by CANACOM, withstood the scrambling of central government agencies and grew in Monterrey and the Nuevo Leon at large as the most homogeneous and strongest regional power in the nation. Assistance funds to supply and distribute commodities among the people and frequent loans to the local revolutionary and post-revolutionary Administrations –by manufacturers and merchants– built a large power structure that in a large extent conditioned the applicability of social and economical reforms enacted by the Constitutionalists during their most radical times.24 And not only this also but it projected their vision of the national economic project throughout the nation smack inthe middle of the Revolution (Flores,1993). And not only this also but it projected their vision of the national economic project throughout the nation smack in the middle of the Revolution (Flores,1993).

Monterrey’s participation in national decision-making positions through its entrepreneurs started with the triumph of Constitutionalism. The active presence of an homogeneous block of local businessmen and manufacturers in the Mexican Congress –which would later shape the Confederations of Chambers of Commerce and of Industry, respectively– lead them to assume business leadership during the configuration of the post-revolutionary State. On September 13, 1918 in the presence of 28 industrial delegations, the National Confederation of Industrial Chambers was constituted with Spaniard Adolfo Prieto as its first elected Chairman.

He was not only the delegate from the textile industry of the State of Mexico, but also Chairman of the Board of the Monterrey Steelworks since 1906. One year earlier, after organizing the Confederation of National Chambers of Commerce (CONCANACO), the local businessmen had already gained national recognition.

In this occasion, before 37 commercial delegations, the first elected Executive Commission was presided by the brewer Enrique Sada Muguerza. Negotiations between these organizations and the public administration that emerged from the Revolution pivoted around three basic issues, all related to the role that the recent Constitution of 1917 conferred to the new State. The first one was the role of the 24 Among these loans, we should highlight Francisco Villa’s demand of a million pesos loan to the business owners of Monterrey on March 14, 1915 to assist the poor. Although the amount could not be raised, more than 300 thousand pesos were collected through the Banco of Nuevo Leon and distributed by Villista authorities among 800 low income families (Flores, 1991).

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State in the economy, particularly pursuant to Article 27. Secondly, the boundaries, arena, and involvement of private enterprise in economic development; and finally, specificity of employee-employer relations. The interference of the State in private business, the economical crisis of 1929, and the Government’s debate on the Federal Labor Code –immediate predecessor of the Federal Labor Law enacted in 1931– drove the Monterrey businessmen to create organizations to defend their interests. This is how, under the initiative of industrialist Luis G. Sada,25 the Centro Patronal de Nuevo Leon (Nuevo Leon Employers’ Center) was created.

This alternate businessmen organization, an innovation of Monterrey industrialists, was soon known all over the Mexico; and the so-called Employers Group headed

by Luis G. Sada himself decided to create a nation-wide organization. Among the initial purposes, it was not only planned as an organization that could overcome the existing limitations, but also one that would be independent from the public administration to ensure that capital interests were safeguarded. Based on Article 123, Fraction XVI in the Constitution, the Confederacion Patronal de la Republica Mexicana (COPARMEX), would be a union directed –among other manufacturers–

by Luis G. Sada. This employer’s organization, still a symbol of the rallying power of the Mexican private sector, was the most elaborate projection that emerged from the organic structure of the Monterrey business sector. That is, the experience of creating a local leading body–in 1883-1940– that would unite all the employers, regardless of their type of business or membership in other organizations or chambers, facilitated the achievement of national exposure through COPARMEX, and an awareness of the business class as different to all the other existing social groups (Basave and Hernandez, 2007).

2. Crisis and comeback of industry

The situation of the Monterrey community after a decade of Civil War was a long way from the one it enjoyed in 1910. In the early 30’s, industry, commerce, and banking started to recover. The business boost that started in the region at the end of Carranza’s administration was modest but steady, and the Revolution had stayed away from the fundamental interests of local businessmen. By 1916, most of the exiled industry owners had returned to expand their investments, diversify, and adapt to the new political scenario. Penetration of Monterrey’s businesses into the market beyond the Rio Grande deepened as compared to the turn of the Century, when it was only of a supplementary nature, whereas the bulk of production was sold in the busy domestic market at the end of the Porfirio Diaz administration. With the advent of the Revolution, the domestic market collapsed, and the few regional 25 Articles of Incorporation, COPARMEX, 1935

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markets shrunk. The events at this stage are very eloquently exemplified in the production figures reported by two of the largest manufacturers of the period.

The steel industry was dramatically affected by the consequences and destructive scope of the Revolution. Compañia de Fierro y Acero de Monterrey, S.A. saw its production drop in the different departments to the extent that some of them were shut down for several years. The recorded figure for steel production in 1911 –85 thousand metric tons– would not be exceeded until 1928. On the other hand, the company’s sales revenues for merchandise fell from 6.5M pesos in 1911, to less than 100 thousand pesos in 1915. Cerveceria Cuahutemoc did not escape the demolishing impact of the economic crisis. In 1914, the brewing company’s directors mourned a sales drop of 50% as compared to 1909. It goes without saying, of course, that a loss of almost 2M pesos, as estimated by its CEO Francisco G. Sada, occurred during confiscation of the company by the Carrancista authorities. In 1909, Cerveceria Cuahutemoc employed more than 1500 people in the different departments. In 1916, during the tremendous economic downfall, the company’s payroll only included 300 employees (Flores, 1987).

Local businessmen stressed the adverse factors that led to this situation. Some causes were directly related to the physical havoc brought about by the armed struggle: lack of communications and rolling stock for the railroad; shortage of fuel, raw materials and spare parts; and the monetary crisis that extended throughout the nation, particularly at the end of the 20’s (Perez, 2008). On the other hand were the social consequences. With these I refer to the new labor provisions that demanded less working hours –8 hours per day as a maximum, when the normal shift used to be 12 hours– as well as higher wages and more fringe benefits for workers.

The consequences were much more significant for Monterrey’s heavy industry, particularly the steel mills, since they worked day and night shifts. In steel mills, for instance, the blast furnace was not shut down for more than six consecutive months. So, if it formerly took two shifts to manufacture one day’s output, now it required three shifts. Additionally, when the right to strike was enacted several unions were officially recognized. Under these conditions, the export market ceased to have the minor importance it used to have and became a business priority. The expansion of foreign markets during World War I –as of 1917, when the United States became involved– was like a shot of fresh energy to the Mexican economy. Once again, the example of the steel industry is a case in point. Fundidora de Fierro y Acero de Monterrey shifted from almost exclusively supplying the national market in 1910, to selling 80% of its production to the United States and Cuban markets in 1918. On the other hand, the internal market nurtured itself from new and eager investors that added thrust to the local economy. As of 1919, business proliferation increased. This new expansion of the foreign and domestic markets was linked to diversification by investors, introduction of technical changes to production

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processes, and an increased control over the emerging labor movement (Flores, 1995, 1994, 1993 and 1989 and Mora-Torres, 1998).

3. New industries

In 1920-1940, the industrial infrastructure in Monterrey, and in a smaller extent the rest of the Nuevo Leon, became stronger; not only with the consolidation of a number of business founded during the old administration, but also with the creation of new industries. The origin of the Grupo Cementos Mexicanos (CEMEX) dates from 1906, when it was founded at the Hidalgo Municipality (30 kilometers northeast of Monterrey) as one of the earliest cement plants in the country. Fourteen years later, in 1920, a second firm was organized in Monterrey to complete the launching pad of the future cement group: Cementos Portland de Monterrey, S.A. This company was founded on June 8, 1920 by five members of the Zambrano family, two from the Madero dynasty –Alfonso and Salvador– and Santiago Belden, among others. Acquiring a property of more than 16 hectares owned by Vicente Ferrara, by 1923 they had built an annual production capacity for 4,000 bags of cement, with a capital of 1.2M pesos (Flores, 1933 and 1991). In 1931, the merger of these two companies into Cementos Mexicanos, S.A., became a the cornerstone of the present group (Caintra, 1983). Vidriera de Monterrey, in turn, expanded its facilities in 1923, and reached a capacity of 150 thousand pieces of glass per day to bottle beer, wine, pharmaceuticals, and food, among other products. Substitution of old machinery with more sophisticated equipment was from the beginning the strategy followed, whereas “it saves a good number of arms” –remarked its Management in 1923-,

whereas the purpose of our business by introducing this new organization is to maintain our facilities and systems at their highest state of perfection, the only way in which manufacturers can prevail against their competitors [...] (Flores, 1991:248).

Isaac Garza, President of the company, proudly commented in an interview published by a local newspaper that same year that it was “the first successful largescale glass manufacturing operation in our country” (Flores, 1993:66). A glassware department was added in 1927 to meet the demand of new products, and a European glass blower was put in charge of training its select group of workmen.

During 10 years he developed highly skilled operators in glassware manufacture, and in 1936 the department became a new, spin-off business: Cristaleria S.A. It was also in 1927 that a plate glass plant was incorporated under a joint investment with Belgian glass manufacturers. In June 1928, the Monterrey glassworks owners signed the first agreement with United States partners, which originated the arrival in 1930 of the first natural gas pipeline from Texas to Monterrey to supply this vital

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power source (natural gas) to the local glass industry (Flores, 1994). By the thirties, the glassworks were manufacturing three different product lines: bottles, glassware, and plate glass. To meet the growing demand of glass bottles in central Mexico, Vidriera Mexico S.A. was built in Mexico City in 1934-1936. Two more companies were created in 1936 when the respective departments in the parent business were upgraded: Vidrio Plano, S.A. (plate glass) and Cristaleria, S.A. (glassware) (Cordero, 1977 and Flores, 1988).

It was also in 1936 that one of the three major business groups was created in Monterrey. I am referring to Fomento de Industria y Comercio (FIC), a predecessor of Vitro S.A. (the other two were Industrias Monterrey, S.A. and Valores Industriales, S. A.). This holding firm was the largest stockholder of the companies in the original group: Vidriera Monterrey, S. A., Vidrio Plano S. A., Cristaleria, S. A., and Vidriera Mexico, S. A. (Flores and Davila 1996).

Yet another prominent local company –Industrias Monterrey, S. A., incorporated on February 14, 1936– was organized in the thirties, this time from a background in garment manufacturing and wholesale. The founding stockholders were Arturo Garza, Eugenio Dominguez, and Maria Garza Viuda de Clariond. As in the case of those by the Garza and Sada families in 1936 (Fomento de Industria y Comercio and Valores Industriales), IMSA became one more large holding firm. It grouped the majority stock of several manufacturing companies: Fabrica de Ropa La Sultana, Molino de Trigo Nuevo Leon, Fabrica de Artefactos de Madera La Sultana, and Planta Galvanizadora de Lamina La Sultana. The subsisting Clariond-Reyes and CanalesClariond families are presently the major stockholders in this group. They are the descendants of Eugenio and Maria del Consuelo Clariond Garza, the children of French immigrant Santiago Clariond-Desdieau, who arrived in Monterrey around the end of the 19th Century and married Maria del Consuelo Garza. ClariondDesdieau founded a wholesale garment business and a retail store by the name of Garza Hermanos y Compaùia with his two brothers-in-law, Arturo and Eugenio Garza, and a capital of 14 thousand pesos. Although Clariond Desdieau passed away on April 30, 1921, and the original garment wholesale and retail operation was dissolved, on April 20, 1932 his widow and two of her brothers, associated with Eugenio Domiguez, founded Centro Mercantil de Monterrey, S.A., the parent company of what four years later would become Industrias Monterrey S.A., founded by the two businessmen and the son of Clariond-Desdieau and Maria del Consuelo, Eugenio Clariond-Garza. The cornerstone of Industrias Monterrey was -and still is- its steel division, Planta Galvanizadora de Lamina, which started operating with sheet steel imported from the United States (Rojas, 1997).

Cerveceria Cuauhtemoc, its owners and their successors, were promoters as well as creators of a further outstanding player in the industrial history of Monterrey (Flores, 1933). In a pursuit of vertical and horizontal integration of the production process, other manufacturing companies were created, such as: Vidrios y Cristales

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(founded in 1899, shut down in 1903, and reincorporated in 1909 with the name of Vidriera Monterrey); Fabricas Monterrey (bottle caps, carbonic gas, cartons, corrugated cardboard goods, and glued paper tape) in 1920; Malta (up to 1989 supplier of cattle, poultry and hog feed) in 1928; and Empaques de Carton Titan, S.A. (corrugated cardboard products) in 1936.

Another large company that emerged after the end of the Revolution was Fabrica de Galletas y Pastas La Industrial (parent of the Gamesa Group), which started operating in 1925 with an initial capital stock of 25 thousand pesos and a labor force of 150. The new supplier of food products was quite welcome in a constantly expanding domestic market. One year later, the Santos family began to produce its own raw material at a large wheat mill located in the facilities of a new company by the name of Harinera Monterrey.

Banks played an important role in this process, rallying funds for the large companies. Since the end of the Porfirio Diaz administration, banking services had increasingly centered on industry. Such was the case with Banco de Nuevo Leon (founded in 1892) and Banco Mercantil (1899). The importance of financing grew after reorganization in 1925 of the banking sector by the Federal Government, with the foundation of Banco Unico de Emision: Banco de Mexico (the Central Bank). In 1925, Centro Bancario de Monterrey, A.C. was created as a result of the Mexican Law on Lending Institutions enacted in December 24, 1924. On the other hand, Mexican finance companies –particularly their pioneer, founded in Monterrey in 1933 with the name of Sociedad General de Credito, S.A. and an authorized capital stock of 1.5 M million pesos– emerged under the Mexican Law on Lending Institutions of June 28, 1932, which allowed “general” or “financing” corporations with the nature of supplementary lending companies, conceived to advance business firms and operations by granting loans on the installment plan and other terms that common banks did not provide. Thus, in the 30’s (additionally to Sociedad General de Credito) the following banking and financing companies were incorporated in Monterrey: Credito Industrial de Monterrey, S.A. on January 29, 1932, with an initial capital of 500 thousand pesos; Banco Popular de Edificacion y Ahorros, S.A. on March 2, 1934, with an initial capital of 500 thousand pesos; Compañia General de Aceptaciones, S.A. (before Financiera Aceptaciones S.A.) on September 29, 1936, with a similar capital; Financiera del Norte, on December 9, 1936, with a capital of 300 thousand pesos; and finally Financiera de Credito, S.A. on February 20, 1939. As far as insurance companies are concerned, two were founded in this same period of time. One was Compañia de Seguros Monterrey, owned by Circulo Mercantil, S.A., on April 8, 1937; and the other Aseguradora del Norte, S.A., a fire insurance operation incorporated on December 4, 1939 with an authorized capital of one million pesos (Flores 1997 and Morado, 1996).

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Wholesale and retail operations recovered in the 20’s after a long shortage of goods that started around the middle of the second decade of the 20th Century.

At this time, downtown businessmen protested the proliferation of sidewalk vendors on Morelos Street (1925); unfair competition of low-priced garments brought from Laredo Texas to sell on the streets and door-to-door, (1929)26; and smuggling of merchandise (clothes, shoes, etc.) from the U.S. border into Monterrey.

Finally, in 1939, the Subsistence Market Regulating Committee (Comite Regulador de Mercado de Subsistencias) was instated at the State capital and started to set retail prices for food commodities such as beans, corn, and hot peppers.

26 Item in the agenda of the July 17, 1929 Unión de Comerciantes al Menudeo y Pequeños Industriales de Monterrey of the Board (Retailers and Small Manufacturers of Monterrey) (Mendirichaga 1983).

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La Industrial, CA, 1929.

Fototeca del Centro de las Artes, Fondo Carlos Pérez Maldonado, Monterrey.

Aerial view of the Cristalería Monterrey, Monterrey.

Nuevo León de cara al siglo XXI, Gob. de Nuevo León, 2005.

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Cervecería Cuauhtémoc.

Nuevo León de cara al siglo XXI, Gob. de Nuevo León, 2005.

Pabellón de Cementos Mexicanos.

Monterrey, 1926.

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Commerce, utilities, and infrastructure in MMA,

1940-2000

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Parque Fundidora, Monterrey.

Roberto Ortíz Giacomán.

Rectoría del ITESM, campus Monterrey.

Roberto Ortíz Giacomán.

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s discussed above, from its origins in the last century, heavy industry in the iron and steel sector gradually introduced businesses that supplied consumer goods to the Monterrey manufacturing businesses. As of 1940, this industrializing effort was strongly encouraged when a drive to substitute imported industrial inputs became an essential part of the development strategies designed for the Mexican economy. An accelerated growth of local industry, that averaged 8.3 percent in 1950-1980, was the result of a thrust for expansion by Monterrey’s major industries. On the other hand, it was also in a fair extent the result of the Nuevo Leon State Government’s fiscal and financial incentives, subsidies, and infrastructural support, particularly in Monterrey Metropolitan Area (MMA).

This uninterrupted expansion continued until the early 80’s. The creation of large corporations was prevalent throughout this period, led by companies that had since the 40’s undertaken an expansion process, horizontally and vertically, both within and outside the manufacturing sector. This growth allowed Nuevo Leon’s industry to produce more than 12 percent of the total Mexican manufacturing output from 1990 on, converting MMA into the largest development pole in the northeast (Flores, 1994).

Now I will analyze the elements that should allow us to explain, not only the large population, but also of the type of businesses now existing in the City of Monterrey, and the irreversible trend that started in 1940. In the following section I will review the significance of MMA’s infrastructure as a support for manufacturing operations, as well as for the growth and expansion of the commercial and service sectors.

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1. MMA’s infrastructure as a support for its business community

Infrastructure is fundamentally intended for the development of Mexican industry, whereas it provides the power, secondary raw materials, and communications that are indispensable for the implementation of modern production processes.

The high concentration of infrastructure works at MMA is the best explanation of its extensive industrial community. Now, let us examine the three categories in which the social means of production are divided to illustrate the importance and meaning of these works in the high concentration of people and business activity in this northeastern city. a. Power systems Power sources are fundamental for the development of industry. Large electric power generators started arriving in Monterrey and the State of Nuevo Leon in 1889 with the first utility, Compañia de Luz y Fuerza Motriz de Monterrey. Nowadays, more than a century later, the main beneficiary and consumer of electric power in Monterrey is the manufacturing industry for whose benefit it was installed, and by the middle of the 90’s it used 70 percent of the total supply, followed by households with 20 percent for, and the remaining 10 percent shared by commerce (7 percent), street lighting, other public utilities (3 percent) (Flores, 1994). It may be said that MMA is at the present time one of the best-served localities in the national power system, a situation that has allowed it to use one-ninth of the total electric power available in Mexico and made the dynamic growth of its industry possible. The outlook also seems optimistic, with the recent proposal by the Federal Government of opening the utility market to private suppliers. Regarding hydrocarbons, these arrived from Roma, Texas in 1930, through a natural gas pipeline built, installed, and operated by Compañia Mexicana de Gas, S.A., owned by local businessmen.

As of the takeover of the oil companies by the Mexican government in 1938, land transportation through pipelines became the best option to supply large industrial centers at a low cost. Presently, Monterrey is one of the urban centers best favored by the extensive infrastructure of oil pipelines –carrying crude oil from production fields to refining centers and fuel oil to consumption centers–; natural gas pipelines –taking natural gas from the wells to the refinery, and from there to consumers–; and, finally, multi-purpose pipelines that carry different power supplies or raw materials from the refineries to the cities where they are consumed. Since in Nuevo Leon there is no oil or gas, these fuels are brought from oil fields in the Mexican southeast states of Chiapas and Tabasco and marine platforms located in the Gulf of Mexico at Campeche. In 1977, one of Mexico’s largest refineries

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started operating at a daily rate of 235 thousand barrels of crude oil in the city of Cadereyta, 26 kilometers away from Monterrey. Its foundation had a great impact in the economy, not only for Cadereyta, but also for the State as a whole. Recently, in 1998, distribution of natural gas was franchised to the private sector in Monterrey, the largest consumer of natural gas in the nation. In March 1999, gas distribution was shared as follows: 35 percent goes to Ginsa for its own consumption; 26 percent to Compañia Mexicana de Gas (a local outlet); 24 percent to the Spanish business Gas Natural; and the remaining 15 percent is retained by Petroleos Mexicanos (PEMEX).27 As it happened throughout Mexico, particularly after 1940, MMA’s growing economical development of the 1930-1999 period was accompanied by a parallel growth in refining and consumption of hydrocarbons. It is beyond any doubt that without this growth in production, economic development would have not been possible given the large dependence of industry, transportation, and power companies as well28, on this additional supply. Not to speak of the decisive role of hydrocarbons in the fast expansion of the automotive industry, metallurgy, and the steel manufactures in MMA; fundamentally supported by the abundant availability and relative low cost of this input. Similar situations are also evident in other branches of the predominant MMA industries (cement, mining, metallurgy, paper, chemicals, and plastics, to name a few) where a plentiful supply of this power source has been crucial for development.

Regarding secondary raw materials, we should highlight water. Due to the industrial and demographic growth of the city during the last third of the 19th Century, the sources and hydraulic system that fed the urban water supply became obsolete. Consequently, since the end of the Century huge infrastructure works have been undertaken to provide this vital liquid to the large city and its industry; not to mention the huge reservoirs intended for human consumption. The local industry was a pioneer in Latin America when in 1955 it founded Agua Industrial de Monterrey, a wastewater treatment plant with an initial capacity of 60 liters per second created to supply the Celulosa and Derivados, S.A. (now Cydsa) processes. Of the 10 thousand liters per second that the Monterrey Metropolitan Area consumed in August 1998, 9,300 (93 percent) were for human consumption and 700 (7 percent) for industrial use. Yet, 3000 more liters per second are supplied to manufacturers by water-recycling plants, and by private wells to food and beverage manufacturers.

The major water recycling plants are owned by Grupo Imsa (APM) with a capacity of 600 liters per second (l/s), Agua Industrial de Monterrey, S. de U. (300 l/s), Cydsa 27 Interview with Marcelo Chauvert, C.E.O. of Compañia Mexicana de Gas, March 11, 1999, El Norte newspaper, Monterrey.

28 For instance, in 1990 the latter sector, integrated by the two largest companies in Mexico –Petroleos Mexicanos (PEMEX) and the utility Comision Federal de Electricidad (CFE)– consumed 29.9 percent of the total hydrocarbon production, while the remaining 70.1 percent was supplied to final consumers. The ratio of these inputs in the energy sector inputs for 1990, particularly the electric power utility, were as follows: 65.6 percent of the fuel oil and 15.8 percent of the residual gas produced for power generators. Secretaria de Energia y Minas Paraestatal, 1991.

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S.A. (140 l/s), Agua Industrial del Poniente, S. A. (125 l/s), Papelera Maldonado (50 l/s), Campestre (Golf Club) with 50 (l/s), Cydsa Corporativo, S. A. de C. V. (50 l/s) and Vitro Corporativo, S. A. de C. V. (25 l/s).29 b. Industrial infrastructure On the other hand, an adequate infrastructure for the industrial zone was invested with ordinances and strategies through a number of government planning agencies.30 The Master Monterrey Metropolitan Area Urban Development Plan (Plan Director de Desarrollo Urbano del Area Metropolitana de Monterrey) for 19882010 is outstanding among contemporary projects. Based on the premise of an existing urban area integrated by the nine municipalities that make up the existing Monterrey Metropolitan Area,31 the plan accommodates both industrial growth and its physical space. Infrastructure developed from the onset of regional industrialization has favored the continuance of this proclivity, and this plan only comes to confirm it. By 1990, 95 percent of the state’s manufacturing facilities were located in MMA, where the urban structure in 1986 was zoned as follows: 884 different residential/housing sectors, eight manufacturing districts, and five industrial corridors (Nuevo Leon State Government, 1988). MMA extends over an area of 36,097 hectares, of which 65.6 percent are occupied by homes; 13.7 percent by factories; 11.6 percent by the primary and master street systems; and the remaining 9.1 percent by the city apparatus (utilities and government agencies). This infrastructure, taken jointly with the constituents I have discussed, substantiates the claim that its benefits fall directly on the environmental space where the physical investments are made. Consequently, the infrastructure grows concurrently with and according to the territorial distribution of the population and its businesses. A feature of this distribution is the high concentration in space with favorable production conditions in general, which in turn becomes the core 29 Data provided by Instituto de Proteccion Ambiental de la Camara de la Industria y de la Transformacion de Nuevo Leon (Institute for Environmental Protection, Nuevo Leon Chamber of the Manufacturing Industry) (CAINTRA), El Norte newspaper, Monterrey, August 6, 1998.

30 The following macro-projects have been implemented in MMA by federal, state, and city administrations: Programa Nacional de Desarrollo Urbano y Vivienda (National Program for Urban Development and Housing), 1984-1988; Plan Nacional de Desarrollo Urbano (National Plan for Urban Development) 1978; Plan Estatal de Desarrollo Urbano (State Urban Development Plan) 1979; Plan Subregional de Desarrollo Urbano de Monterrey Metropolitano (Sub-regional Plan for Urban Development of Metropolitan Monterrey) 1982; Municipal Plans for Urban Development of Apodaca, San Pedro Garza Garcia, General Escobedo, Guadalupe, Monterrey, San Nicolas de los Garza and Santa Catarina, 1980; Plan Nuevo Leon (Nuevo Leon Project), 1988-1991; and Plan Director de Desarrollo Urbano del Area Metropolitana de Monterrey (Master Plan for Urban Development of the Monterrey Metropolitan Area), 1988-2010.

31 This Plan was triggered by a reminder of a an action of the Governor in the face of a manifest reality. On January 23, 1984, his decree was published in the Nuevo Leon Official Gazette, declaring the existence of a conurbated zone integrated by the municipalities of Monterrey, San Nicolas de los Garza, Apodaca, Guadalupe, Garza Garcia (now San Pedro Garza Garcia), Santa Catarina, and General Escobedo. In a further decree two municipalities were added: Villa de Garcia, and Juarez (Government of the State of New Leon, 1988).

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element that explains and replicates concentration. However, the agglomeration in the Monterrey Metropolitan Area of a significant portion of local businesses and of the nation’s urban population leads to complex and growing urban issues: housing and utilities shortage, pollution of the ecosystem,32 public insecurity, poverty belts, underemployment, and other negative characteristics that make up the framework of a metropolitan pathology and demand an urgent remedy. c. Legal and tax incentives in pre-established territorial zones While it is true that the location of industrial facilities cannot be ruled by decree, it is also true that the appropriate legislation can influence private location decisions.

In this sense, and considering the infrastructure factors described above, a distinct and firm policy of industrial decentralization has been enforced to drive facilities towards the outskirts of the Monterrey Metropolitan Area. This is how industrial parks began to emerge with the purpose of grouping medium and small operations in the same geographic location, through incentives for their establishment and facilities for their growth. The initial industrial park developments in Nuevo Leon were nine, of which up to 1987 the State Government managed seven and private companies the other two: Ciudad Mitras and Fraccionamiento Industrial Lincoln, respectively (Flores 1988). By 1997, industrial park development was booming, and 19 parks were built in Escobedo, Linares, Sabinas, Cienega de Flores, Doctor Gonzalez, El Carmen, Pesqueria, Guadalupe, San Nicolas, and Apodaca, over an aggregate area of 1777.31 hectares, of which 912.2 were developed. They accommodated 233 operating businesses, had 10 under construction, and 16 in the planning stage.33 The latter were primarily oriented to the maquiladora industry, mainly located in the north of MMA, with ready access to major freeways and highways leading to the Texas border. These type of parks were designed for 32 There are truly alarming studies regarding the pollution of the MMA environment . The Plan Director de Desarrollo Urbano (Master Urban Development Plan), designed by Nuevo Leon Government disclosed the following data in 1988: “ Given the amount and features of polluting waste, the manufacturing industry is the main source, at a ratio of 50 percent; vehicles are next at 40 percent; the deficient disposal of solid urban waste, mainly garbage burning, generates 5 percent; and a number of other causes the remaining 5 percent. In general terms, the cement, chemical, paper, smelting, glass, quarry, and power industries are most significant pollutants.”

Of these, 4% pollute with emissions, 6% with grease, and 11% with dust. Yet another 13% generates highly toxic pollutants. And to make matters worse, only 21% of the plants that cause highly toxic contamination have emission-control equipment. Not to mention water, soil, noise, and urban image pollution (commonly called “visual contamination”). Likewise, the Plan Director (Master Plan) alerts to the pollution of inhabited areas close to plants; as well as liquid gas, oil, and of other hydrocarbon outlets installed nearby . Which means- the study assures- “a potential risk of toxic leaks, explosion, and fire that impairs the safety and well-being of the citizens” (Nuevo Leon State Government, 1988).

33 Information provided by the Subsecretaria de Industria, Comercio y Turismo, de la Secretaria de Desarrollo Economico del Gobierno del Estado de Nuevo Leon, El Norte newspaper, Monterrey (Industry , Commerce, and Tourism Undersecretariat, Secretariat of Economic Development of the Government of Nuevo Leon State), May 4, 1997.

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non-polluting maquiladoras and so-called light industries, built on properties of 10 hectares or less. Taking advantage of the generally favorable driving conditions that prevail in MMA, the owners control the maintenance and proper operation of these parks through regulations and/or trusts created by the occupants.

Another clear example of the correlation between legal/tax benefits and the boom of some companies are the so-called maquiladoras, defined as a manufacturing operation shared by one or more nations. This production mode tends to generate lower costs, since it derives benefits from the comparative advantages of each particular country. In the last few years, implementation of maquiladora plants has gained increasing significance in the major cities of the Mexican northern border. These companies come mainly from the United States (but there is a fair number of Asian companies, particularly in the Northwest), and are engaged in assembling parts or transforming temporarily imported raw materials and intermediate components into finished products that are later returned to the country of origin. This development is also extending into central Mexico, but the plants in the border strip are still a majority. The leading processed products include electric parts and assemblies, garments, and transportation equipment. Any manufacturing business can be organized as a maquiladora, except those reserved by the government and polluting industries. Today, this type of industry constitutes a significant part of the Mexican economy. Originally, it was intended to provide jobs for a great number of unemployed and potential United States immigrants passing through the northern border. Presently, it is a significant source of foreign currency and a prominent establishment in the business community as a source of employment. Maquiladoras have progressed in different aspects, such as the number of plants, geographic coverage, and product diversity. A staunch reflection of their growth is the fact that in 1997 an average of almost 50 maquiladoras per month were opened with an aggregate investment of almost 1.28 M dollars.

The industrialization process by way of maquiladoras is presently being boosted significantly by the Mexican authorities that regulate business operations. According to the official agenda, maquiladoras process unfinished products shipped from and later sent back to United States. To support expansion of these companies, several amendments were made to the Maquiladora and Export Business Promotion Act (Decreto para el Fomento de la Industria Maquiladora de Exportacion); including: •

•

• •

Definition of sub-maquila as the industrial processes or interrelated services provided by maquiladoras.

Allowing these companies to sell their products without restriction in the domestic market; Ensuring a treatment of “indirect exporters” for their domestic suppliers; Extending to two years the allowed permanence of raw materials, parts, and inputs temporarily imported into Mexico;

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• Facilitating payment of the applicable taxes; and • Setting mandatory terms to complete incorporation procedures.

Until the year 2000, the maquiladora industry worked under the temporary imports approach. NAFTA (North American Free Trade Agreement) provides that maquiladoras may continue importing inputs and components temporarily without paying customs duties or added value (IVA) tax, as they do now, according to the following criteria: firstly, inputs and components from and incorporated to products shipped to a country that is a party to NAFTA; and secondly, inputs and components incorporated to products shipped to a country that is not included in NAFTA. However, in 1998 nearly 90 percent of the existing maquiladoras fell under these two categories, and therefore the large part of this type of production will not be affected. Given the proximity of the American market, northeast Mexico, as well as the northern border strip, are attractive locations for maquiladoras. As I discussed earlier, both Federal and State Government programs provide support and facilities for these companies in terms of financing; importing, transporting, and exporting red tape; taxes, etc. Unlike the other border states, it was until 1986 that maquiladoras had their official start in Nuevo Leon (CAINTRA, 1991); but regardless of this tardiness, the boom they have had throughout the state is remarkable.

While in 1986 they were only 15 in existence by 1998 there were already 121, with an aggregate labor force of 48,133 (INEGI, 1999). In a good extent, the financial benefits available to foreign investors are the cause of this fast growth. They are based in the following expectations: • • •

•

•

Low-cost skilled labor; Ready- built and available conditions for production, as a general rule; Proximity for American maquiladoras or companies focused on the U.S. market, which allows for more operational control over the plants and lower freight/inventory costs; Steady power and fuel supplies below the average international market price, keeping in mind the benefits for MMA of electric power and hydrocarbons brought through the pipeline system built by the Mexican government.

Import and export facilitation through a local customs office and the Nuevo Leon State Commission for the Promotion of Maquiladora and Export Industries (Comision de Fomento a la Industria Maquiladora y de Exportacion del Estado de Nuevo Leon).34

34 The products made by these companies in 1997 included: sports articles and toys; automotive motors, parts, and accessories; electronic accessories; metal furniture; electric parts and telephone cables; ceramic plaster and accessories; garments; coils for air conditioning equipment; fine leather goods and jewelry, machinery and electric equipment; plastic spray assemblies; food products; ball bearings; recovery of mechanical products; material

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These infrastructural conditions continue attracting foreign capitals to Monterrey.

According to the Nuevo Leon State Under secretariat of Foreign Trade (Subsecretaria de Comercio Internacional del Gobierno de Nuevo Leon), in 1999 Mexico should have a foreign currency income of 11B dollars in direct foreign investments; of which an estimated 10 percent will be invested in Nuevo Leon. These funds are expected to go into expansion of existing plants and addition of new ones. Facilities are being erected in the Apodaca, Cienega de Flores, Montemorelos, San Nicolas, Escobedo, Guadalupe, and Garcia municipalities, creating an estimate of 18 thousand new jobs. Some businesses that are re-investing in expansion are Densa at Apodaca, Navistar at Escobedo, Lithonia Lighting at Guadalupe, Mercedes at Garcia, and Alcoa Fujikura also at Apodaca. On the other hand, some that will be installed under agreements with the Under secretariat are Alpeck/Dupont (130 M dollars in Santa Catarina); Axtel (100 M) a relatively unknown firm in the telecoms sector (85 M in Escobedo and San Nicolas); GE/Toshiba (25 M in Cienega de Flores), General Electric (22 M in Apodaca), Varco Prudent (20 M in Cienega de Flores), Square D. (15 M in Apodaca), REMSA (12 M in Cienega de Flores), HEB (22 millions in two hypermarkets, at Monterrey and San Nicolas),Celestica (10 Min Apodaca), Hon (10 M in Cienega de Flores), Bemis (8 M in Cienega de Flores). Soon to be erected in Apodaca are Hendricson (7 M), Parker Fluid Connectors (6 M), Saturn Electronics (6 M) and Johnson & Johnson (5 M); in Monterrey, Hilton Garden Inn (5 M); in Montemorelos, Carters (4 M); ATCO Flex in Linares (3 M); and Compaq, the latest, in San Pedro with an initial investment of 2M dollars.35

2. Expansion of the marketing and service sectors As we speak, the largest contributions to the Mexican GNP come from commerce and services, at a rate of more than of the total and providing jobs for more than 50 percent of the working population (WP). Monterrey is no exception to this framework, whereas more than 64 percent of the WP works in this third sector of the economy versus 35.2 percent who work in the secondary sector; which means that the former is undoubtedly the dominating economic sector at the end of this century.36 A multiplicity of small and medium stores distributed throughout Nuevo Leon, and particularly in MMA characterizes the commercial and service salvage; and services (cutting, etc.). Information provided by Jaime Contro Yllanes, Chairman of the Nuevo Leon Maquiladora Association Leon, El Norte newspaper, Monterrey, “Made in Mexico,� Special Supplement, April 19, 1998.

35 Information provided by the Subsecretaria de Comercio Internacional del Gobierno del Estado de Nuevo Leon (Subsecretariat of International Trade, Nuevo Leon State Government), El Norte newspaper, April 19, 1998.

36 See final findings. Basic tabulations. Conteo 1995 de Poblacion y Vivienda (Count of Population and Housing, Nuevo Leon), 1996. Mexico, INEGI, 1996.

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foundations. Nevertheless, for more than twenty years the consolidation trend followed by large modern companies in MMA by this sector has found growing support in consumers and, as a consequence, has been taking over the urban space.

Monterrey commerce, in line with the tradition of the domestic environment, is classified by the type of its (wholesale or retail) merchandise, its distribution system (traditional or modern); and, finally, by the size of the operation (micro, small, medium and large).

Wholesalers distribute and transport large quantities of products, and regularly operate well as go-between merchants offering intermediate goods to manufacturers or as a link between manufacturers and importers where retailers are involved. Presently, the Mexican Institute of Statistics, Geography, History and Informatics (INEGI) defines the wholesale business as “resale (without processing) of new or used products, to retailers, commercial or industrial users, and institutions or professionals; as well as to other wholesalers “. On the other hand, a retail business mostly sells goods to the final consumer in the last stage of a distribution process, and likewise presents a bipolar framework: traditional and modern.

Traditional retail commerce is integrated by micro stores (up to 15 employees and annual sales of 900 thousand pesos or less), small stores (up to 100 employees and 9 M pesos in sales), and a few medium-sized stores, that, together with farmer’s markets, are characterized by the small quantity and diversity of the merchandise they handle, their low productivity, and family ownership.37 Modern commerce basically takes place in large establishments (more than 250 employees, and net annual sales above 20M pesos) mostly supplied directly by the producers, and a few medium-sized stores (no more than 250 employees, and net annual sales of 20M pesos or less). This system allows for better planning of sales margins. Those types of operations include large department stores, supermarkets, hypermarts, and other large establishments.

The commercial sector is organized much like the industrial sector, in this case

by Chambers of Commerce. On April 22, 1941, a new amendment of the Law on Chambers of Commerce and Industry was approved by the Mexican Senate. The main variance was that each business sector would be differentiated by its own chamber. This brought about the dissolution of the National Chamber of Commerce, Industry and Mining of the State of Nuevo Leon (CANACOIM) and each one organized its own chamber according to its business. Thus, on December 29, 1941, the Extraordinary General Assembly of Merchants wrote the new bylaws that would rule the new National Chamber of Commerce of Monterrey. Their first important action was to support (in 1941-1942) the businessmen of German, Japanese, and Italian descent, who had a good reputation in town, and prevent their names from 37 See Secretaria de Comercio y Fomento Industrial (Commerce and Industrial Development Secretariat), Mexico, 1997.

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appearing on the black lists prepared in the United States when it got involved in the Second World War. Some of them worth mentioning were the owners of Casa Holck and many retailers in the jewelry, garment, and shoe trade, among others. (Mendirichaga 1996, 1983). The 40’s and 50’s were abundant in concern for local merchants, expressed through the Chamber of Commerce, on account of the competition they were having from the Texas border trade. By May 1957, and particularly in July 1959, the Chamber insisted on fighting advertisements from Texan cities such as Brownsville, Laredo, and McAllen published and broadcast by the local media. This persisting concern, latent to this day, reflected the significance of this sector’s expansion for a large part of the Monterrey working class. By 1960, the commercial sector in MMA employed 47 thousand 456 people in the community, 13 percent of the total Nuevo Leon WP; and this figure continued growing in the following years. In 1968, in the midst of a major political and social turmoil (May 13), came the first large-scale removal by the city authorities of all the sidewalk vendors and merchants with semi-fixed stands in the main city streets (Mendirichaga, 1983).

This action brought real chaos to some downtown streets and culminated with a rally gathered by the damaged merchants to solve the situation. The event was an historic milestone when the merchants delegated their interests to the local union leaders of Confederacion Nacional de Trabajadores de Mexico (National Mexican Workers Confederation) and Confederacion Regional Obrera y Campesina (Regional Confederation of Laborers and Peasants) (from now on referred to as CTM and CROC, respectively) and initiated negotiations with the authorities for relocation to places that were never clearly determined. This started a new sidewalk invasion in the city’s shopping zone.

In the seventies, friction increased between local merchants and both the State and Federal governments. Specifically during the Luis Echeverria-Alvarez administration (1970-1976),38 businessmen fought against the government trend toward an increased involvement in the economy. Federal programs to sell commodities through state organizations and stores such as CONASUPO, ISSSTE, SAHOP, CONASUPER; the creation of the National Fund for Workers’ Consumer Goods (FONACOT) and the Federal Law on Consumer Protection, were considered an attempt against business (and consumer freedom), and creators of a huge monopoly in the hands of the State. In July 1983, Monterrey started a concentration of large business capitals through new forms of merchandising such as hypermarts, malls, and large shopping centers in the style of Perisur in Mexico City or Plaza Dorada in Guadalajara (Flores, 1996). Around this time, the Galerias Monterrey Mall opened, to be soon followed by others such as Moll del Valle and Plaza Fiesta San Agustin in Garza Garcia. It was a year to be commemorated, and a new monument 38 A particularly violent time. Increasing terrorism reached its peak on September 17, 1973, with the murder after a failed kidnapping attempt of the entrepreneur Eugenio Garza Sada.

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was built in MMA: Faro del Comercio (Commerce Beacon) donated to the city by organized commerce (and dedicated on December 7, 1983) in the central square known as the Macroplaza symbolizing the Centennial of the Monterrey Chamber of Commerce. The project designers were architects Luis Barragan and Raul Ferrera Torres, and it consists of a 69.8-meters high, 12.53-meters long, and 1.83-meters wide concrete tower built with one thousand cubic meters of cement and 250 thousand kilos of rebar. The monument is illuminated, and a moving laser ray of green light from its apex into the sky enhances its verticality. That same year (1983) two new wholesale and retail staples and produce supply centers were created, one in Guadalupe –240 warehouses that generated 800 new jobs– and the other in Santa Catarina, which originally had 198 warehouses (Mendirichaga, 1996).

Recurrent recent crises in 1982, 1985, 1988, and 1995, increased the number of families engaged in the so called “informal” market as a way of life or incomeearning alternative. As a consequence, parallel to the expansion of MMA toward all the cardinal points, came the creation of well-defined areas dubbed flea markets by the people, overpopulated with vendors whose merchandise was 90 percent of foreign origin (mostly from the United States and Asia) and did not comply with tax and sanitary regulations. Even though they were continually relocated, these flea markets did not solve the problem of sidewalk vendors in Monterrey. I wish to make a special mention of the enormous “tianquiztli” (“market”) in the Nahuatl Indian dialect that operates every weekends on the bed of the Santa Catarina River, and in a smaller scale in all the large parks of Monterrey and the central square of every municipality in MMA, where one is surprised by the wares, which range from old mining and manufacturing tools to modern, imported electronics.

There is no doubt that this aspect of Mexican tradition and culture can not be concealed because it sprouts in different forms and aspects all over Mexico. Let us remember what friar Juan de Torquemada narrated in the turn of the 17th Century (1615) about San Hipolito Market vendors in Mexico City.

Many come to buy and others with no business at all, just to see what is for sale. There are mostly women, under makeshift roofs or shades they build to guard off the sun.

They exhibit their merchandise on the floor and they all know and have their assigned seats that nobody else will take, because gentleness to each other runs in their blood; such are the ways in this one and all the markets of New Spain, each trade has its own seat and place (Torquemada 1978:144).

Parallel to this Mexican tradition, the nineties brought new and foreign luxury hypermarts. In Monterrey, United States chain stores such as Wall Mart, HEB, Price Costco, and SAM’S (the latter two introducing a novelty in the Monterrey wholesaleretail market: consumers can only buy through a membership that costs less than 200 pesos a year), the French firm Carrefour, and a new approach to building and home materials introduced by Total Home (initially established as a joint venture

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of the local WPa Group and United States associates, WPa now owns all the stock).

The International Business Center (Cintermex) was also dedicated in this decade, at the site of the old Fundidora de Fierro y Acero de Monterrey (steel smelter). There is no question that Mexico’s aperture to free trade started in 1986 when it joined GATT. Later, with the advent of NAFTA in January 1994, trade was stimulated and defined new paths to grow and achieve consumer satisfaction. As a matter of fact, under the National Program for Domestic Supply and Commerce, in Monterrey up to 50 percent of retail sales are handled by self-service stores, and the other 50 percent by small shops. Locally-owned hypermarts operating in Mexico in the last decades are Soriana-Hipermart and Gigante, joining others of regional good standing and great tradition such as Azcunaga (Flores, 1996), Casa Holk, and Mode, among others.

Finally, marketing businesses reflect the country’s economic structure, and also contribute in a high extent to the GNP. On the other hand, the commercial segment is a ready example of recent changes in the Mexican economic structure. The purpose of domestic commerce is distributing merchandise and services, which allows it to determine the requirements of the domestic manufacturing sector; as discussed below.

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Refinery in Cadereyta Jiménez.

Carlos Rodríguez, PEMEX, Nuevo León.

Magna Library Raúl Rangel Frías de la UANL.

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Commerce Beacon, Monterrey.

Alejandro Covarrubias.

Rectory of UDEM. Roberto OrtĂ­z GiacomĂĄn.

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C hapter

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Recent stability, crisis, and growth.

Characteristics of industrial expansion,

1940-2000

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Casa de Calderas, Alto Horno.

Fundidora de Fierro y Acero de Monterrey, S.A. Guillermo Kahlo.

Panorámica de Hylsa.

Erick Bachhausen.

Fundidora de Fierro y Acero de Monterrey, S.A. Roberto Ortíz Giacomán.

Hojalata y Lámina (HYLSA) en la década de 1950.

Fototeca Centro de las Artes, Fondo Carlos Pérez Maldonado, Monterrey.

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T

he above economic growth process based on industry and supported by the commercial and service sectors, as well as the MMA infrastructure, adopted the following set of characteristics in 1940-2000: increased production of capital and durable goods; concentration and centralization of capitals; financial strategies and capital accumulation; and the creation of industrial groups.

1. Increased production of capital and durable goods

In the 1944 industrial census, the most salient sub-groups in the Nuevo Leon manufacturing sector continued to produce the following: steel goods; machinery and equipment; chemicals; oil, coke, rubber, and plastic byproducts; food; and steel commodities. These four industrial subgroups represented 61 percent of the listed business units; 70.4 percent of the sector’s labor force; and 79.7 per cent of the contribution of manufacturers to the state’s gross product.39 Nevertheless, the Nuevo Leon manufacturing sector, confirming several trends that had held for a few decades, made significant changes in its industrial structure. To begin with, it evidenced “a continuous shift towards modern, capital-intensive branches engaged in capital goods production” (Flores y Olvera, 1988:106). This trend is clear in several types of merchandise produced in the Monterrey Metropolitan Area. While in 1970 39 See Anuario Estadistico de Nuevo Leon (Annual Statistics of the State of Nuevo Leon), 1995 Edition, Mexico, INEGI, Nuevo Leon State Government, 1995.

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manufacture of machinery, instruments, accessories, and electric/ electronic articles represented less than 5 percent of the city’s total industrial production, the ratio grew to 26.9 percent in 1944. This growth in capital and durable goods in the MMA industrial structure occurred at the expense of production of intermediate goods by a number of companies. Such was the case of the steel commodities subgroup, which in 1980 contributed 41.7 percent to the total manufactures produced in MMA. At the turn of this century, this industrial subgroup was the one that brought about an actual revolution in the Porfirian era. The strength of the steel commodities industry was since then related to the industrial growth of Monterrey, up to the early 80’s. The economic crisis of 1982 and shutdown in 1986 of the most prominent company in Monterrey, Compaùia de Fierro y Acero de Monterrey (the original smelter) operating since 1900, had a negative effect on this subgroup of the local industrial sector (Flores, 1993). The turning point that lead toward a new and exciting industrial structure in MMA is shown in the 1989 industrial census, which closes the centennial cycle in Monterrey recording for the steel commodities industry: 1.7 percent census units (fallen to 0.6 percent by 1994), 6 percent of the total WP (3 percent by 1994), 6 percent of the total net fixed asset, and 10.6 percent of the total gross product of the manufacturing sector.

The latter figure became more critical by 1944, when it fell to 9.7 percent.40 This subgroup showed a drop for the first time in a century and gave place to capital and durable goods manufactures (such as machinery, instruments, accessories, and electric/electronic articles); intermediate goods suppliers, especially chemical producers, oil, coke, rubber, and plastic products, non-metal minerals producers, and finally to the perishable goods industry engaged in food processing.

2. Concentration and centralization of capitals

As a second feature of the 1940-2000 period in the State of Nuevo Leon, we find an increasing growth in the trend towards concentration and centralization of capitals. Out of the 9,729 manufacturing operations, 92 percent (8,947 companies) were small, 6.1 percent (597) were medium-sized and only 1.9 percent (185) could be considered large.41 The latter owned 67.2 percent of total local capital stock and had 50 percent of the total employed labor in their payrolls. Concurrently, small operations (92 percent) only had 11.3 percent of the total invested capital and had 24.2 percent of the total WP. Nevertheless, the small business concept is tricky.

Out of the 8,947 companies under this category, 7,372 were classified as micro businesses (75.8 percent located in Nuevo Leon); employed 24,292 people (9.8 40 Ibid 41 Ibid

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percent of the total) and represented 3.5 percent of the industrial capital invested in the State. These operations, with an average of three employees, deepen the gap that separates them from the next category: small businesses. If we apply a more rigorous standard to the latter, we find that only 16.2 percent of these were based in Nuevo Leon, had 14.4 percent of the employed labor force in their payroll, and represented 7.8 percent of the capital invested in manufacturing operations.

To continue with my discussion on concentration and centralization of capitals: out of 185 businesses chartered at MMA in 1994, only 31 may be depicted as dominating the Nuevo Leon industrial scene; since they employed more than one thousand workers per factory and concentrated most of capital invested in this category. In fact, at the time these 31 companies had in their payroll 41 percent of the WP (48,875 people) employed by large companies and 33 percent (or 16 billion pesos) of total investments made in MMA. Even though Nuevo Leon has 4 percent of the country’s total population, its industry generates 12 percent of the GNP, and its outputs represent 15 percent of the national manufactured exports.

In 1955, Nuevo Leon held the GNP fourth place (6.4 percent) as contributor of the GNP under Distrito Federal (27.4 percent), the State of Mexico (10.7 percent); and Jalisco (6.9 percent). As a matter of fact, these three states and Distrito Federal, contributed 51.4 percent of the GNP.42 Nuevo Leon’s foreign trade share in 1990 was 8.7 percent of total Mexican exports and 7.7 percent of that year’s imports.

Product exports and imports in the state –as an sign of national trend– were heavily centered on and oriented to a single country: the United States. 89.23 percent of the State’s exports were shipped to the north border, while 91.02 of the incoming merchandise was from the U.S. (Nuevo Leon State Government, 1993).

Concentration and centralization was also reflected in overcrowded population and bustling business activity in this Northeastern City. 95 percent of the State’s industry is impressively concentrated in this way in its metropolitan area. 65 percent of the factories are located in Monterrey, 11 percent in San Nicolas de los Garza, 10 percent in Guadalupe, and the rest in the other metropolitan municipalities (Flores y Olvera, 1988).

The phenomenon of conurbation in the Monterrey Metropolitan Area started in the 70‘s, when the populated areas of Monterrey, Guadalupe, Garza Garcia, San Nicolas de los Garza, and Santa Catarina were physically joined by streets, bus lines, adjoining housing developments, and a more fluid inter-communication, especially on account of the growing industrialization in the area (Garcia Ortega, 1988 and Nuevo Leon State Government, 1988). By 1984, the Governor decreed the integration of Escobedo and Apodaca and declared the existence of a conurbated zone with the purpose of having them contribute to development as a unit through joint planning efforts (Nuevo Leon Government, Official Gazette, January 42 Ibid.

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1, 1984). Subsequently, two more municipalities were added, Villa de Garcia and Juarez, to complete what is now known as the Monterrey Metropolitan Area. By 1986, official confirmation was issued of what is now known as the urban area of MMA. It measures 36,097 hectares, 69 percent occupied by three of the nine municipalities: Monterrey (35 percent), Guadalupe (19 Percent), and San Nicolas de los Garza (15 percent). In the distribution of urban land use at MMA, one finds that 60 percent of the housing is concentrated in the Guadalupe and Monterrey municipalities, 51.5 percent of the industrial area in Monterrey and San Nicolas de los Garza, and 43 percent of the city’s utilities are based in Monterrey (Nuevo Leon State Government, 1988).

Regarding MMA’s population, it steadily became overwhelmingly larger than the total State population, and by 1995, was more than 50 percent thereof. Concurrently, the WP in MMA concentrated in the second (35.2 percent) and third (64.3 percent) sectors, while it gradually disappeared in the first sector; by 1995, it housed only 0.5 percent of the total.43 Mainly in the 70’s and 80’s, the local WP showed an annual growth rate of 5.4 percent, exceeding the total population growth by 4.8 percent (Nuevo Leon State Government, 1988 and Vellinga, 1988). This factor sets the stage for an explanation of the three-way division of local economy.

As a matter of fact, the increase of the working force and its low skill levels exceed the employment demand of secondary businesses and, as a consequence, obstruct access to industrial jobs.

This industrial concentration in the last half century at MMA has a bearing on the shift in the factors used to determine the location of manufacturing plants in Mexico. At the onset, location was linked to availability of natural resources, and later to the marketplace and saving opportunities generated by large clusters of manufacturing, commercial, and service businesses that is evident in the Monterrey Metropolitan Area.

3. Financial strategies and capital accumulation

The accumulation in 1940-2000 was mainly achieved by way of particular financing strategies. Prior to 1940, Monterrey’s large industries had managed to build a relatively strong financial system. Nevertheless, as of 1940 –and especially after 1950–, banks showed signs of prosperity. The end of this period coincides with the foundation of the Monterrey Stock Market, and a proliferation of domestic banks. The direct result of financing development is the Mexican industrial boom and structural change that Mexico is now undergoing. In other words, production of manufacturing goods grew faster than that of consumer goods. Usually, when 43 Ibid.

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people refer to the primary sources of private business financing in Mexico, they claim that it came from capital mergers and reinvestment of their profits. It is likewise said that as of the 70’s there was a shift in the origin of the development resources, from domestic to foreign financing. (Cordero, 1977; Cordero and Santin, 1976; Davila, 1997; Flores y Davila, 1996; Flores, 1993 and 1998; Hoshino, 1991; and Medina Cervantes, 1984). Monterrey’s large industries were no exception, even though we can detect this process at an earlier stage. Industrial financing in Monterrey was generated by two obvious sources: domestic and foreign financing.

The former came in two fashions: cash flow generated locally (reinvestment of earnings); and tapping of the financing companies and banks owned by the local groups. Two examples are the Visa-Banca Serfin and the Vitro-Banpais liaisons (Flores, 1988; Hamilton, 1986 and Luna 1986). As I already commented, Monterrey was always an important financing site in the country. Until the government takeover of the Mexican banks (1982), MMA had 214 private and mixed bank branch offices, and captured 15 percent of the total national funds and 14 percent of the loans (CAINTRA, 1983). Up to 1982, the banks based in Monterrey affected by the government takeover were seven: Banco Mercantil de Monterrey (founded in 1899), Banpais (initially Banco de Nuevo Leon), Banco Popular (1934), Bancam (1940), Banco Monterrey (1943), Banco Regional del Norte (1947), and Banca Serfin (1971). But the economic expansion of the industrial groups, especially in the 70’s, demonstrated that the capacity of the national banks for financing development was limited.

Notwithstanding, the internal debt -that is, loans granted in pesos- was significant. Usually, a bank operated by an industrial group was the major creditor of the group’s affiliates, above all, in the case of long-term loans. It should be noted that companies that had a bank in their group had a better chance of getting longterm financing than the ones that had no bank. But the bank in their group was not the only one that made them loans. In many instances, their creditor banks were other than the group’s own, and usually foreign.

The second approach to industrial financing was resorting to foreign banks using two major approaches: one was placing shares in the Stock Market and issuing commercial paper, among other debt instruments; and the second getting direct loans from foreign banks. Due to the economic expansion that brought the oil boom and euphoria of the 70’s, foreign loans grew in this last decade (Davila, 1997; and Flores y Olvera, 1988).

During the 70’s, many Mexican companies –among them several local ones– joined the Stock Market motivated by two factors: need of funds and the tax incentives conferred by a decree on Industrial Promotion Corporations. Issued in June, 1973, this decree provided benefits “to those corporations and business units that promoted industrial and tourism growth in our country” (Flores y Olvera, 1988). The legal provision granted a preferential tax treatment to companies that

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controlled capital stock. As a result of these two factors –need of funds and tax exemptions- the companies adjusted their image. The manufacturing corporations became more transparent. Here the reader may wonder about the reason for such transparency. Well, one of the prerequisites to be listed in the Stock Market is to publish the company’s financial report. Therefore, their patterns of conduct, erstwhile unknown, were placed in full view. Among the industrial, commercial, and service companies that were listed in the Mexican Stock Market in 1985, one third did so in the second half of the 70’s. The largest local companies went public in that period. We are referring to the Grupo Cydsa (1973); Grupo Vitro, S.A. (1976); Cementos Mexicanos (also in 1976); Grupo Industrial Alfa (1978), and Valores Industriales, now FEMSA (1978). It is significant how the government policy of the 70’s, insofar as promoting the public sale of stock shares, helped to expand of the Stock Exchange business. Even in the years (1982-1988) of crisis adjustments by the business groups, the actual returns of several local companies in the Mexican Stock Market exceeded those of other listed industries. In December 1982 - September 1988, Vitro headed the list with an actual return of 960 percent; Cydsa was third with 580 percent; Alfa was seventh with 470 percent; and Cemex was ninth with 45 percent (Mexican Stock Market, X-1988).

The other financing approach was getting loans from foreign banks. The only inconvenience was that most of them were made in U.S. dollars. This brought as a consequence that international economy shifts directly affected the financial statements of these companies, as it actually occurred by the summer of 1981, and even more so the following year. The severe economic crisis of 1981-1982 brought several problems to manufacturing groups that have apparently been solved by now. The adverse factors that they had to face as of 1982 were: increased international interest rates, sharpened by the succeeding devaluation of the Mexican peso; fall in government subsidies; and drops in the price of shares listed in the Stock Market. This meant two great survival issues: the foreign debt and market contraction. The solution to the foreign debt was negotiating debt rescheduling with the foreign banks. An effective instrument to accelerate negotiations between these companies and foreign banks was the establishment by the Federal Government, in March, 1983, of a system named Exchange Rate Risk Protection Trust (FICORCA). FICORCA’s stated purpose was to prevent the exchange risk from affecting companies with a foreign debt that at the time were negotiating a rescheduling and insure availability of dollars at the controlled rate, that is, at a low cost. Almost all the local companies that had a foreign debt signed an agreement with FICORCA as soon as it was created. This means that they were saved of the losses that a peso devaluation would mean; but without being released from the burden of their debt. It should be noted that the agreement between the companies and FICORCA clearly established that the company continued to be liable for its debt to the foreign banks and would not be substituted by

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FICORCA. There is no doubt that FICORCA was effective in this critical crossroads of companies in debt.

Since then, the majority shareholders adopted different strategies to regain an increased control margin within the companies themselves. The means to solve the problem was to increase production, but since the domestic market was at the time undergoing a fall on account of the domestic crisis, they opted for rationalizing production and putting their thrust on exports.

The former strategy was accomplished by selling and/or shutting down the losing operations and the laying off employees. For instance, Corporativo ALFA officially announced at the end of 1981 that it had terminated 4,300 employees and sold companies worth 5.697 billion pesos (Davila, 1997). There were other dramatic layoffs, like Grupo Valores Industriales S. A. (now Femsa), that in 19811983 terminated 21,393 employees; Grupo Industrial ALFA (18,143) in 1980-1984; and Vitro Corporativo (more than 10 thousand in 1980-1984). Generally speaking, almost all the corporate groups had some recuperation in this aspect as of 1985, and even after the 1981-1982, 1985, 1988, and 1995 crises seem quite strong nowadays in this respect.

The thrust on exporting their products was used by most of the companies to compensate for the fall of the domestic market. Even though all the local industrial groups already had a successful experience in the export business, it was until 1983, with the fall of the domestic market, that exports grew significantly in the total sales of many companies. Government policies also favored this trend. As of July 1985, the decision was made to accelerate release of the external sector of the economy (Gaeta, 1988). The (Mexican) Fund for Promotion of Exports, through the Foreign Commerce Bank, has been a further and very helpful instrument. Finally, the need of exports so that these companies may stay in business is reflected in the conferences that preceded Mexico’s formal adhesion to GATT in June 24, 1986 (Gaeta, 1988). Two months later, on August 24, Mexico became the ninety-second party to goin. In short, after 1940 and especially after the 60’s, this flow of financial capitals into Monterrey has been compensated by Monterrey’s investments all over Mexico, and even overseas, through its powerful industrial groups. Investment projects for other geographic areas are particularly directed to the capital goods, chemicals, petro-chemicals, fishing, and agricultural sectors. (Flores y Davila, 1996).

Finally, we must keep in mind that the re-privatization process of government banks of 1982 was completed until 1991-1992. Monterrey’s large industrial companies and entrepreneurs resolved to participate in this process and purchased several banks.

By 1993, they had purchased Bancomer, Serfin, Banorte, Banpais, Confia, and Banco de Oriente; and held 40 percent of the national bank assets and liabilities, 42 percent of the total bank equities; 46 percent of the profits; 43 percent of the revenues; and

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35 percent of the total domestic banks’ capital stock.44 These figures have changed the last few years on account of the Confia bankruptcy (1997), purchase of Banpais (by Banorte in 1997), and the foundation of Banregio (1995).

4. The formation of industrial groups

Finally, as far as the national industry sector is concerned economic growth created industrial groups in several sectors. In this process diversity and diversification of interests flow together over and beyond emphasis on the manufacturing business.

The commercial, financing, services, tourism, and communications sectors constitute horizontal, vertical, and territorial integration. Vertical integration was the initial response to an uncertain and imperfect market that allowed large companies to allay uncertainties relative to their suppliers of inputs and cutting down costs.

On the other hand, horizontal integration and product diversification allows these corporations to increase information flows and reduce the margin of error in investment and production decision-making. In fact, the stock shares and the administration of the groups were concentrated in headquarters (corporativo). With this reorganization, the industrial groups became a clearer entity with a corporativo on the summit. Additionally to their administrative function, corporativos are in charge of watching over the affiliated companies’ income, and at times planning and coordinating the group’s actions (Cordero and Santin, 1976). With industrial group expansion, the initiation of new businesses by the corporativos through the creation of new companies paved the way for foreign capital participation; directly or through licenses. The example of industrial corporativos born in Monterrey that continue to have their decision-making centers here is significant, particularly after the 70’s. In this decade, the government’s support was crucial in the creation of new companies. Keep in mind that it was the Federal Government who encouraged their existence through the aforementioned decree enacted in June, 1973 which created the so-called Industry and Tourism Promotion Business Units. It should also be noted that that the Secretary of the Mexican Treasury (Hacienda y Credito Publico) in charge of writing the law at the time was Jose Lopez Portillo, and the strategies in this law became a policy during his presidency (1976-1982). Even though transformation of companies into industrial groups seems to be more the result of the government’s encouragement to create stock-controlling companies that would encourage industrial and tourism growth in the country, the large companies did not let the opportunity pass them by. They found the right time to rebuild their business strategies under the protection of a group strategy. Presently, 44 Figures based on reports published and/or sent by the banks to the Mexican Stock Exchange (BMV) pertaining to the first two quarters of 1993. See El Porvenir newspaper, Monterrey, August 25, 1993.

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this strategy has three common characteristics throughout Monterrey’s industrial groups: a.) almost all the founding families are majority stockholders; b.) all the groups became divisional structures with strategic business units (UEN’s, better known as subsidiaries) and a corporativo in command at the organizational apex, and; c.) in all the groups the corporate strategy is concentrated on industrial integration and diversification (Davila, 1997).

Some of the largest groups in Nuevo Leon are: WPa, Cydsa, Grupo Industrial Ramirez, Gruma, Pulsar, Femsa, Vitro, Protexa, Imsa, Cemex, and Lamosa.

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Celulosa y Derivados (Cydsa) in 1959.

Fototeca Centro de las Artes, Fondo Carlos Pérez Maldonado, Monterrey.

Fábrica de Hilados La Fama, Nuevo León.

Roberto Ortíz Giacomán.

Inside a steel company in Monterrey.

Fototeca Centro de las Artes, Fondo Eugenio Espino Barros, Monterrey.

Vitro, Monterrey.

Roberto Ortíz Giacomán.

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Cervecería Cuauhtémoc Moctezuma, Monterrey.

Roberto Ortíz Giacomán.

Company Xignum, Monterrey.

Roberto Ortíz Giacomán.

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Final Remark

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n evaluation of the internal conditions prevailing in each region of Mexico is crucial if we are to understand the type of connections that our nation can establish with the international economy.

The State of Nuevo Leon, and particularly MMA, had by the end of the 19th Century a community of local entrepreneurs and businesses with enough economic power, political clout, and experience, to participate in and benefit the region as a whole with international businesses, especially as of 1940. Contrary to what has recently happened in other regional environments as a result of the latest economic crises [1981-1982, 1985, 1988 and 1995] and de-regulation of the national economy where the massive income of the maquiladora industry and businesses with foreign capital have displaced the traditional local entrepreneurs, in Nuevo Leon the local business community does not seem to have lost any of the protagonist influence exerted by its companies or entrepreneurs. In fact, they have made strategic alliances with foreign firms that have set up their operations in the region and undertook expansions of their businesses beyond the regional and national environment to become in multiple cases multinational and/or world-class companies. Concurrently, the medium and small businesses of the secondary and tertiary sectors of the local economy have been animated by the economic boom of the big corporations, and encouraged to be more competitive and rational in order to survive. If we add to these the infrastructure that MMA has to support its business activities and abundant skilled labor (blue collar, technicians, and professionals), the regional economy will not only continue to foster the generation of great wealth in this city surrounded by an unfriendly natural environment, but also to transform many lives in the process.

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Monterrey has managed to blend the old economy that built an agglomeration of materials, suppliers, factories, and transportation to the modern economy, a new agglomeration built on intellectual skills; an actual economy of knowledge, where university campuses are hardly celebrating their 66th anniversary. I refer to both Universidad Autonoma de Nuevo Leon (1933) as the oldest institution of public education, and private higher education colleges such as Instituto Tecnologico de Monterrey (1943) and Universidad de Monterrey (1969), among others.

If we consider that (technical as well as scientific) professionals are often more in tune with their career than with their respective industries, we are talking of an exceptionally qualified labor force driven, above all, by new ways to do things.

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k Selected Bibliography Manuscript Sources

Archivo General del Estado de Nuevo León, Monterrey, México Archivo General de la Nación, Ciudad de México.

Archivo Histórico de la Secretaría de Relaciones Exteriores, Ciudad de México.

Archivo del Honorable Congreso del Estado de Nuevo León, Monterrey.

Archivo de Manuel Gómez Morín, Ciudad de México Archivo de Pablo González Garza, Colmex, ciudad de México Archivo de Venustiano Carranza, Condumex, ciudad de México Hemeroteca Nacional, Ciudad de México Nettie Lee Benson Latin American Collection, Austin, Texas

Newspapers

El Diario de Monterrey, Monterrey El Financiero, Ciudad de México El Mercurio, Santiago de Chile El Norte, Monterrey El Porvenir, Monterrey Emporio, Monterrey Excélsior, Ciudad de México Expansión, Ciudad de México La Jornada, Ciudad de México Periódico Oficial del Estado de Nuevo León, Monterrey Trabajo y Ahorro, SCyF, Monterrey Universal, Ciudad de México

k Primary and Secondary Sources ACLE Tomasini, Alfredo (1995). Planeación estratégica y control total de calidad. Un caso real hecho en México, México, Editorial Grijalbo.

Acta Constitutiva de la Confederación Patronal de la República Mexicana (1935). México, Cía. Editora La Afición.

ALESTRA (1998 y 1997). “Alestra. Servicios de Telecomunicaciones AT&T”, Monterrey, N.L., Alestra.

ALVA Vega, Carlos y Dirk KRUIJT (1988). Los empresarios y la industria de Guadalajara, Guadalajara, COLJAL. ALFA (1980-1998). Informe anual, 1979-1997, Monterrey, Alfa. _______ (1998ª). “Alfa reporta resultados del primer trimestre de 1998”, Monterrey, Alfa, 23 de abril. _______ (1998b). Who is Alfa (Quién es Alfa), Monterrey.

BANCO DE MÉXICO, 1997. Informe Anual, 1997, México, B. de M. _______ (1997). Indicadores Económicos, 1997, México, B. de M. BANCO NACIONAL DE COMERCIO EXTERIOR (Bancomext) (1992-1998). Industria siderúrgica (19921998), México.

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BASAVE, J. y Strassburger, C. (1994). Propiedad y control en los grupos financieros empresariales en México.

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RUIZ y Unikel GARZA (1976). El desarrollo urbano de México, México, COLMEX. SADA, Roberto G. (1981). Ensayos sobre la historia de una industria, Monterrey, Litográfica Monterrey.

SARAGOZA, Alejandro (1988). The state and capitalism in Mexico: the formation of the Grupo Monterrey, 1880-1940, California, Universidad de Berckley.

SEMPER, Erwin (1904). “La industria del Salitre en Chile”, en Revista Oficial de Minas Metalurgia y Sustancias Salinas, Berlín, vol. 52, 1904.

SECRETARÍA DE COMERCIO Y FOMENTO INDUSTRIAL (SECOFI) (1997). Indicadores del mercado interno, México, 1997, SECOFI. SECRETARÍA DE LA ECONOMÍA NACIONAL (1933). México, SEN. _______ (1931). México, SEN. SECRETARÍA DE ENERGÍA Y MINAS PARAESTATAL (1993). Panorama Energético, México, SEMIP. _______ (1992). Balance Nacional. Energía. 1991, México, SEMIP. _______ (1991). Balance Nacional de Energía, 1990, México, SEMIP. _______ (1987). Balances Nacionales. Energía, 1965-1985, México, SEMIP. SECRETARÍA DEL PATRIMONIO Y FOMENTO INDUSTRIAL (1981). Balances de Energía y Estadísticas Complementarias. Metas a 1990 y proyecciones al año 2000, México, SPFI. SECRETARÍA DE PROGRAMACIÓN Y PRESUPUESTO-INEGI (SPP-INEGI) (1962-1995). Censo Industrial de México, VII, VIII, IX, X, XI, XII y XIII. México, SPP-INEGI. _______ (1985). Sistema de cuentas nacionales de México. Estructura económica regional, producto interno bruto por entidad federativa, 1970-1975-1980, México, SPP-INEGI. SEMPER, Erwin (1904). “La industria del salitre en Chile”, en Revista Oficial de Minas Metalurgia y Sustancias Salinas, Berlín, vol. 52.

SERRANO, Sol (comp.) (1986). La diplomacia chilena y la revolución mexicana, México, Secretaría de Relaciones Exteriores.

SERVICIO DE AGUA Y DRENAJE DE MONTERREY, (AYD DE MONTERREY) (1995). Estadísticas del AMM, Monterrey, AYD de Monterrey.

SNOGRASS, Michael (2003). Deference and defiance in Monterrey. Workers, paternalism and revolution in Mexico, 1890-1950 [Deferencia y desafío en Monterrey. Trabajadores, paternalismo y revolución en México, 1890-1950], Cambridge University Press. _______ (1996) La lucha sindical y la resistencia patronal en Monterrey, México, 1918-1940, México, AGENL.

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SUÁREZ Gaytan, Mariangela (1994). “Rodolfo Gaytán Saucedo y la consolidación del sindicalismo en Nuevo León”, tesis profesional, Monterrey, Universidad de Monterrey.

The Oil Weeky (1931). EUA. TORQUEMADA, Juan de (1978). Monarquía Indiana, México, UNAM. TORRES López, E. y Mario A. SANTOSCOY (1985). La historia del agua en Monterrey desde 1577 hasta 1985, Monterrey, Ediciones Castillo.

TORRES Trejo, Jaime (2006). Minerales, rocas, minería y metalurgia en México: Catálogo Bibliográfico, México, INHA VÁZQUEZ, Juan Antonio y Miguel GONZÁLEZ Quiroga (1987). “Capitalistas norteamericanos en Monterrey: Joseph A. Robertson”, en Mario Cerutti (coordinador) Monterrey, Nuevo León, el Noreste, Monterrey, UANL. VELLINGA, Menno (1988). “La dinámica del desarrollo capitalista periférico. Crecimiento económico y distribución del ingreso en Monterrey”, en Mario Cerutti (ed.) Monterrey, Siete estudios contemporáneos, Monterrey, FFyL-UANL. VILLACERO (1998). “Villacero”, Monterrey, Grupo Villacero.

VITRO (1999). Historia y Visión de Vitro, Monterrey, Vitro _______ (1980-1998). Informe Anual, 1979-1990 y 1997, Monterrey, Vitro.

VIZCAYA Canales, Isidro (1971). Los orígenes de la industrialización de Monterrey, 1867-1920, Monterrey, Librería Tecnológico.

WILLIAMSON, O. (1983). Markets and hierarchies, analysis and antitrust implications: A study in the economics of internal organization (Mercados y jerarquías, análisis e implicaciones antimonopólicas: Un estudio económico de la organización interna), Nueva York, Free press.

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Industry, Commerce, Banking & Finance in Monterrey, Mexico (1890-2000)

Ă“scar Flores

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Contents Introduction

83

Chapter 1 The beginning, 1890-1910

87

Chapter 2 Revolution and National Reconstruction, 1911-1940

95

97 99 101

1. The entrepreneurs and their organizations 2. Crisis and comeback of industry 3. New industries

Chapter 3 Commerce, utilities, and infrastructure in MMA, 1940-2000

107

110 110 112 113 116

1. MMA’s infrastructure as a support for its business community Power systems Industrial infrastructure Legal and tax incentives in pre-established territorial zones 2. Expansion of the marketing and service sectors

Chapter 4 Recent stability, crisis, and growth. Characteristics of industrial expansion, 1940-2000

123

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1. Increased production of capital and durable goods 2. Concentration and centralization of capitals 3. Financial strategies and capital accumulation 4. The formation of industrial groups

125 126 128 132

Final Remark

137

Selected Bibliography

139

Manuscript Sources Newspapers Primary and Secondary Sources

Index

139 139 139 151

Óscar Flores

Index

k A

Agua Industrial de Monterrey: 111 Agua Industrial del Poniente S.A.: Monterrey, 112 Alcoa Fujikura: 116 ALFA: 130, 131, 133 Alfonso XIII: King of the Spain, 91n ASARCO: Fundición 3, American Smelting and Refining Co, Guggenheim, 91, 93 Aseguradora del Norte, S.A.: 104 Azcúnaga: self-service, 120

B

k 151

Banca Confía: 132 Banca Serfín: 129, 132 Banco de Comercio Exterior: 131 Banco Mercantil de Monterrey: founded in 1899, 88i, 103, 129 Banco de México: Central Bank, founded in 1925, 104 Banco de Nuevo León: founded in 1892, 103 Banco de Oriente: 132 Banco Popular de Edificación y Ahorros, S.A.: founded in 1934, 97, 129 Banco Regional del Norte: founded in 1947: 129, 132 Bancomer: 132 Banpaís: initially Banco de Nuevo León (1892), 129, 132 Banregio: founded en 1995, 132 Barragán Morfín, Luis: 119 Basagoiti, Antonio: businessman, Fundidora de Fierro y Acero de Monterrey, 92 Belden, Santiago: businessman, Cementos Portland Monterrey, S.A., 101 Bessemer, converter: this which directly transforms cast iron into steel, 92 Bolsa Mexicana de Valores (BMV): 129, 130 Bolsa de Valores de Monterrey: 129 Braniff, Tomas: businessman, Fundidora de Fierro y Acero de Monterrey, 92 Bravo, river: 89, 100 businessmen commune: CANACOM, 98

C

Cadereyta: city, PEMEX, 41 Calderón, José: businessman, Cervecería Cuauhtémoc, 92n canteras: mining, 86 Carrefour: 120 Casa Holck: 120 Casino de Monterrey: 90 cement: production, 86 Cementos Hidalgo: founded in 1905, 91 Cementos Portland Monterrey, S.A.: funded on June 8, 1920, 101 CEMEX: Cementos Mexicanos, family’s Zambrano, Madero, Belden, 101, 106i, 130, 133 Central America: 91n Centro Bancario de Monterrey, A.C.: founded in 1925, 103 Centro Mercantil de Monterrey, S.A.: founded on April 20, 1932, 103 Centro Patronal de Nuevo León: Luis G. Sada, founder, 99 Cervecería Cuauhtémoc: founded under a franchise from the Nuevo Leon State Government conferred on December 16, 1890 to local entrepreneur Isaac Garza and his American colleague J. M. Schnaider, 90, 91, 100, 103, 106i, 135i CINTERMEX: The International Business Center, built in the grounds of the former Fundidora de Fierro y Acero de Monterrey, 120 Clariond Desideau, Santiago: children of French immigrant, 102, 103 Clariond Garza, Eugenio: businessman, IMSA, 102 Clariond Garza, María del Consuelo: 102, 103 coffee: milling, 86 Commerce Beacon: opened in Monterrey on December 7, 1983, 119, 122i Compañía General de Aceptaciones, S.A.: founded in 1936, 104 Compañía de Luz Eléctrica y Fuerza Motriz de Monterrey: 104 Compañía Mexicana de Gas, S.A.: 34, 111

Page numbers followed by the letter i refer to the illustrations and which are followed by the letter corresponding to the n footnote.

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Compañía de Seguros Monterrey del Círculo Mercantil, S.A.: founded in 1937, 104 CONASUPER: 119 CONASUPO: 119 CONCANACO: Confederation of National Chambers of Commerce, 98 Constitution of 1917: 99 Contrarresguardo Federal Law: in 1870, 90 COPARMEX: Confederación Patronal de la República Mexicana, founded in 1935, Luis G. Sada, 99 Crédito Industrial de Monterrey, S.A.: founded in 1932, 104 Cristaleria, S.A.: founded in 1936, 32, 105i CROC: Regional Confederation of Laborers and Peasants, 118 CTM: National Mexican Workers Confederation, 118 Cuba: 103n CYDSA: Celulosa y Derivados, petrochemical company, 112, 130, 134i

CH

Chamber of Commerce (CANACOM): 97, 98 Chamber of Nuevo Leon Landowners: 97 Chicago Word Fair: in 1893, 91n

D

Densa: at Apodaca, Nuevo Leon, 116 Díaz, Porfirio: President of Mexico, 89, 90, 91 Distrito Federal: Mexico, 90 Domínguez, Eugenio: businessman, IMSA, 102

E

Echeverría Alvarez, Luis: President of Mexico, 19701976, 119 Empaques de Cartón Titán, S.A.: founded in 1936, 103 Escobedo, Mariano: Secretarie of Defense, 90 Escuela Politécnica Cuauhtémoc: 92n

F

Fábrica de Artefactos de Madera La Sultana: 102 Fábrica de Hilados y Tejidos de Algodón La Fama de Nuevo León: founded in 1854, 91, 134i Fábrica de Hilados y Tejidos La Leona: founded in 1874, 91 Fábrica de Hilados y Tejidos El Porvenir: founded in the Municipality of Santiago, 91 Fábrica de Ropa la Sultana: 102 Fábricas Monterrey: founded in 1920, 103

Federal Labor Code: 99 Federal Labor Law: enacted in 1931: 99 FEMSA: before Grupo VISA, 130, 131 Ferrara, Vicente: businessman, 101 Ferrera Torres, Raúl: 119 FICORCA: Exchange Rate Risk Protection Trust, 131 Financiera Aceptaciones S.A.: 104 Financiera de Crédito, S.A.: founded in 1939, 104 Financiera del Norte: founded in 1936, 104 Fomento de Industria y Comercio (FIC): a predecesor of Vitro, S.A., founded in 1936, 102 Fomento de la Industria Maquiladora de Exportación: 114, 115 FONACOT: 119 Fototeca Centro de las Artes: Parque Fundidora, 134i Fundición 2: Compañía Minera, Fundidora y Afinadora Monterrey, 90,91 Fundición 3: American Smelting and Refining Co, (ASARCO), Guggenheim family, 91 Fundidora de Fierro y Acero de Monterrey, Compañía: founded in 1900 and in full production by 1903, 92, 100, 101, 120, 124i, 126, Casa de Calderas, Alto Horno, 124i

G

Galerías Monterrey Mall: 119 Galletas y Pastas La Industrial: founded in 1925 with an initial capital stock of 25 thousand pesos and labor force of 150, 103 Garza, Arturo: businessman, IMSA, 96, 103 Garza, Issac: businessman, Cervecería Cuauhtémoc, Vidriera Monterrey, 91, 92, 102 Garza, Roberto: businessman, IMSA, 102, 103 Garza Sada, Francisco: businessman, Compañía Vidriera Monterrey, 91 Gas Natural: spanish company, 111, 111n GATT: aperture to free trade started in 1986, 120, 132 Gigante: self-service store, 120 GRUMA: 133 Grupo Industrial ALFA: 130, 131, 132 Grupos Industriales: 125 Guadalajara, City: 85 Guggenheim: family, Fundición 3, American Smelting and Refining Co (ASARCO), 91, 93

H

Hapsburg, Maximillian: Emperor of Mexico, 90 Harinera Monterrey, S.A.: company, 103

Óscar Flores HEB: 120 Honorat, León: businessman, steel mill, 92 HYLSA: Hojalata y Lámina, S.A.: 124i

I

IMSA: Industrias Monterrey, S.A., founded in 1936, Arturo Garza, Roberto Garza, Eugenio Clariond Garza, Eugenio Dominguez, María Garza viuda de Clariond, 102, 103 Industry and Tourism Promotion Business Units: founded in 1973, 133 ISSSTE: 119 ITESM: Monterrey, 108i

L

LAMOSA: before Compañía Manufacturera de Ladrillos de Monterrey, founded in 1891, 133 Laredo, City: 90 Latin America: 90 Law on Chambers of Commerce and Industry: approved by the Mexican Senate on April 22, 1941, 118.

Lithonia Lighting: 116 López Portillo, José: President of Mexico, 1976 a 1982, 133 Luz Eléctrica y Fuerza Motriz de Monterrey, Company: 94i

M

Madero, Alfonso: businessman, Cementos Portland Monterrey, S.A., 101 Madero, Salvador: businessman, Cementos Portland Monterrey, S.A., 101 Malta, S.A.: founded in 1928, 103 Mercado Juárez: 92 Mexico: state, 90, city, 85, country, 85, 86 Minera, Fundidora y Afinadora Monterrey, compañía: 91 MMA: Monterrey Metropolitan Area 86, 109, 110, 111, 113, 114, 116, 118, 119, 126, 127, 129 Mode: regional good standing, 120 Molina Enríquez, Andrés: 90 Molino de Trigo Nuevo Leon: 102 Moll del Valle: 119 Monterrey: see MMA Monterrey, city: 89, 90, 93, 94i, 98, 113, 125 Muguerza, José A: businessman, Cervecería Cuauhtémoc, 91n

N

NAFTA: North American Free Trade Agreemend, 115, 120

k 153 National Confederation of Industrial Chambers: Adolfo Prieto, 98 Naranjo, Francisco: Secretarie of Defense and Division General, 90 National Chamber of Commerce, Industry, and Mining of the State of NuevoLeon (CANACOIM): founded in 1921, 97, 98, 118 Navistar: company in Escobedo N. L., 117 Nomadic: tribes, 90 Nuevo León: Federal State, 90

O

Oaxaca: Federal State, 93

P

Palace of the Government of Nuevo Leon: 94i Papelera Maldonado: company, 112 Parque Fundidora: Monterrey, 108i PEMEX: Petróleos Mexicanos, 111, 111n Petrochemicals: industry, 86 Piedras Negras: city, 90 Planta Galvanizadora de Lámina La Sultana: 102 Plaza Fiesta San Agustín: shopping center, 118 Price Costco: 119 Prieto, Adolfo: businessman, 97, 98 printing presses: 86 PROEZA: International group with headquarters in Monterrey. It currently has automotive business, agricultural and service sectors, Guillermo Zambrano, 133 PROTEXA: 133 PULSAR: 133

R

railroad: junctions, 89, depot, 90 Ramírez, Grupo Industrial: 133 Refinery PEMEX: Cadereyta, 121i, 110 Retailers and Small Manufacturers Society: founded in 1921, 97 Reyes, Bernardo: military and governor of Nuevo Leon, 89, 90 Rocha, Joel: businessman, Benjamín Salinas, Salinas y Rocha company founded in 1906, 91 Roma: Texas, 110

S

Sada, Alberto: businessman, Cervecería Cuauhtémoc, 91n Sada, Francisco G.: businessman, 84, 91n

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Sada, Luis G.: businessman, Centro Patronal de Nuevo León, 99 Sada Muguerza, Enrique: businessman, 98 SAHOP: 119 Salinas, Benjamín: businessman, Joel Rocha, Salinas y Rocha company, founded in 1906, 92 SAM´S: 120 San Francisco: church, 94i San Hipólito: market in México City, Juan de Torquemada, 120 San Luis Missouri, World Fair (1904): 91n sand mining: 86 Saving and Investment Cooperative Society for the Operators and Employees of Cerveceria Cuauhtemoc (SCYF): founded in 1918, 91n Schnaider, J. M.: American businessman, Cerveceria Cuauhtemoc, 91, 91n Siemens-Martin: steel furnaces, 92 Signoret, León: businessman, steel mill, 92 Silla, Cerro de la: 88i Sociedad General de Crédito, S.A.: founded in 1932, 103 Soriana-Hipermart: 120 steel mill: industry, Monterrey, 90 submaquila: 115 Subsistence Market Regulating Committee: founded in 1939, 104

T

tobacco: production, 86 telephone: establishment, 89 telegraph: the advent in 1881, 89 telephone: establishment, 89 tianquiztli: prehispanic market, 119 Torquemada, Juan: friar of the 17th Century, 119 Total Home: 119 Treviño, Gerónimo: Secretarie of Defense, 90

U

UANL: Universidad Autónoma de Nuevo León, founded in 1933, 108i United States of America: 91n Universidad de Monterrey: founded in 1969, Rectoría, 122i

V

Vidriera México, S.A.: founded in 1926, 102 Vidriera Monterrey, Compañía: founded in 1909, Isaac Garza, Francisco Garza Sada, 91, 101, 102, 134i Vidrio Plano, S.A.: founded in 1936, 102 Vidrios y Cristales de Monterrey, Company: founded in 1899 and shot down in 1903, 91 Villa, Francisco: in Monterrey, 98n Villarreal, Antonio I.: Governor of Nuevo Leon, 92n VISA: Valores Industriales S.A., founded in 1936, 112, 129, 130, 131 VITRO Corporativo: 112, 129, 130, 133

W

Wall Mart: 119 wood products: 86

X

Xignum: 135i

Z

Zambrano, Adolfo: businessman, 90 Zambrano, Gregorio: businessman, 90 Zambrano, Guillermo: businessman, 6

Óscar Flores

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Otras obras del autor

Revolución Mexicana y diplomacia española Contrarevolución y oligarquía hispana en México, 1909-1920 ISBN 970-628-091-X

Historiadores de México siglo XX Selección, presentación y notas de Óscar Flores Torres.

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Industria, Comercio, Banca y Finanzas en Monterrey, 1890-2000

Industria, Comercio, Banca y Finanzas en Monterrey, 1890-2000.

Industry, Commerce, Banking & Finance in Monterrey, Mexico (1890-2000), de Óscar Flores, se terminó de imprimir en el mes de septiembre de 2011 en los talleres de Diseño3 y/o León García Dávila, Valle de San Juan del Río No. 10, Col. Vista del Valle, Naucalpan, Estado de México.

Se tiraron 1,000 ejemplares en papel cultural de 75 gms.

Se utilizó tipografía Myriad Roman 11 en 13 puntos.

Supervisión de la edición: Óscar Flores Torres y Marco Aurelio Ávalos Díaz.

Diseño de portada e interiores: Diseño3 / León García Dávila, Yvette Bautista Olivares, Carmen Alegría Hernández.

u Francisco Javier Rodríguez Gutiérrez u

1u