And the accordions were silent ... How will Mexico's northern industrial powerhouse fare after the shock of Sept. 11? (Terror Fallout).

It takes something quite considerable to interrupt life here in Monterrey, a city whose residents pride themselves on working longer, faster and harder than anywhere else in Mexico. However, on Sept. 11, the life of the city was most definitely interrupted.

A quick scan across the radio stations "city of the mountains" on a normal day yields almost nothing but the accordion-filled norteno music which is so much a part of Monterrey life. On that Tuesday morning, the accordions were suddenly silenced, replaced with the frantic voices of incredulous reporters struggling to convey the horrors taking place across the border. Public accountant Patricio Gonzalez describes the mood in the maquila companies where he works: "Many people were praying. There was a feeling of extreme sadness and human warmth toward the victims."

Rene Diaz, head of the construction division of Industrias Monterrey (IMSA), talks of a "strange, quiet time" after the attack. "Nobody knew what was going to happen," he adds. "Our first reaction, like a lot of companies, was to realize that we don't have a set process for anything like this. We don't have a forecast--it's just unprecedented."

Fifteen days after the attacks, businesses here were beginning to negotiate the new economic landscape and take stock of the damage. Some US$2.1 billion had been slashed from the share prices of nine of the largest companies in Monterrey. Worst hit were regio giants Savia and Alfa who saw their share prices drop 40% below Sept. 10 levels. Many businesses are now looking anxiously over the border, just some 230 kms away, to see what lies in store for the next few months. Carlos Zambrano Plant, Secretary of Economic Development for Nuevo Leon, is quick to point out the temporary nature of these dramatic economic effects.

"In the short term we are going to see a downturn in the economy," he says. "Eighty percent of Nuevo Leon's exports go straight to the United States, and so obviously businesses will be affected. But here in Mexico, just as in the rest of the world, we don't yet know what the level of this downturn will be."

Monterrey has many Mexican-owned, family-run companies that serve the domestic market, and therefore should not be as exposed as the maquiladoras. In fact, out of some 15,000 companies in and around Monterrey, only 170 are classified as maquiladoras--nothing compared to the border-town economies, many of which depend almost entirely on these component assembly factories.

However, as any proud regio will tell you, Monterrey is Mexico's manufacturing powerhouse and so to a large extent is at the mercy of international commodity prices. According to Diaz, it is in the core manufacturing areas rather than the niche product areas that Monterrey will suffer.

Carlos Plant is keen to play down the possibility of increased unemployment in the area, pointing out that, for the first half of September at least, there were actually 1,000 more people employed than had been forecasted. However, the data for the critical second half of the month was not yet available at press time. Despite concerns such as these, Carlos Plant suggests that there could be light at the end of the tunnel for Monterrey.

"America has always had a strong strategic alliance with Mexico, especially in terms of technical industries, component supplies and assembly," he says. "In the mid- to long-term the U.S. will want to concentrate its imports to sites closer at hand than it has previously. Mexico is ideally placed to provide for the 'just-in-time' manufacturing processes many companies in the U.S. are now using. Over time, we could actually see an increase in exports to the U.S."

Stephen Pinches is a Monterrey-based freelance writer.