TIJUANA (Border Report) — With fears of a recession growing in the U.S., those who operate maquiladoras in Northern Baja are drawing up contingency plans and preparing to lay off personnel.

“There could be labor cutbacks, fewer days for workers or fewer hours per day,” said Pedro Montejo Peterson, president of the Maquiladora and Export Industry Association in Baja’s coastal zone.

Montejo Peterson went on to say if the U.S. economy struggles it will have an impact worldwide and certainly in Mexico.

“Since we’re neighbors and it’s our biggest trading partner, there will be repercussions,” said Montejo Peterson. “About 80 percent of the maquiladora industry is owned by United States interests, so we would have to readjust and turn to other commercial sources in other parts of the world such as South America and Asia.”

Montejo Peterson stated he expects many people to stop working in the United States when difficult times set in, saying many will simply not work hoping to get financial support like they got during the pandemic.

“Many people used their money to buy electronic devices for their homes and that created an imbalance in the market,” he said. “On the other hand, a recession in the United States would lower demand on the supply chain and deliveries might stabilize, some of our members have seen up to a 400 percent increase in demand for their products.”

If there’s a bright spot, according to Montejo Peterson, it is that there will be a recovery following the recession.

“It would be an important recovery period so we need to start preparing for it and return to production and inventory levels we saw in 2019,” he said.