Posted by Nallely Martinez on Wed, May 16, 2012 @ 02:23 PM
Are you considering moving your operation offshore? Did you know that academic infrastructure availability is one of the most undermined considerations from companies starting up in a new offshore location?
Academic infrastructure, an element commonly overlooked by manufacturers, and also critical factor responsible for adding up unexpected costs, delays, and other painful effects on production when not properly reinforced.
Corporations like Cessna, Hawker Beechcraft, Boing, Bombardier, Airbus, Delphi, Emerson, Textron, Philips Telecommunications, and Ford Motor Company realize the importance of counting on a qualified workforce to carry out specialized procedures and specific needs of particular production processes. In fact, all of them have successful operations in Mexico where people in the workforce are willing to learn and most regions in the country have now developed a strong industrial culture.
Just a few days ago, Luis Olive Hawley, ProMexico´s chief executive of Investment and International Business Promotion, emphasized the fact that Mexico has become an expert in advanced manufacturing thanks to the gradual improvement and experience it has accumulated in all the different sectors throughout the years. Mexico´s success in these advanced production processes is also attributed to factors manufacturing companies have utilized in their favor such as the availability of resources like:
- Young population - guarantying HR supply for the future
- Flexible workforce - open to change and eager to learn
- Influence on curriculum redesign - specialized student programs make qualified workers
- Technology Centers - advanced training programs and high-end equipment
Companies from all different industrial sectors have been manufacturing in Mexico for decades leveraging efforts with educational institutions, government, and other entities in order to get the qualified workforce they require for unique production processes. Therefore both fields manufacture and management, would be ready to handle new procedures particular to innovative production processes.
Even gurus from the industrial sector with more than 30 years of career like Real Gervais, vice-president of Bombardier Aerospace operations in Mexico, have decided to retired with great confidence in the successful performance of upcoming generations. Queretaro, Chihuahua, Juarez, Monterrey, Guadalajara, and other areas as well, have become experts on industrial operations and whether you are in the aerospace, automotive, medical devices, electronics, OEM, IT or any other sector, a shelter services provider could help you determine with more certainty which region will better suit your operation. Students and workers in these Mexican regions have welcome novel knowledge and techniques appreciating the move their cities have undergone to expand from manufacturing to¨ mindfacturing¨ and building synergies for future start ups.
Therefore, if you are thinking on starting up manufacturing in Mexico, we invite you to sign up for our webinars where we will share the “whole picture” of what you need to know and do to successfully start up operations in Mexico.
Sign up for our Webinar NOW!
Better yet, regardless of the stage at which your company is right now in the relocation to Mexico or expansion of manufacturing operations in Mexico project, we are dedicating expert resources to sit with you on a one-to-one basis by offering you a FREE STRATEGY SESSION that will help you determine a cost-effective roadmap to land your project on your own terms.
Request your FREE STRATEGY SESSION TODAY!
If you are seriously thinking about starting up or expanding business operations in Mexico, we encourage you to take action fast.
Since we dedicate time only to serious projects, we can only offer a very few spots per month for the FREE STRATEGY SESSION. Register Now!
About American Industries Group:
American Industries Group is Mexico's leading manufacturing facilitator with over 35 years successfully landing manufacturing projects in Mexico from over 200 global corporations through shelter –administrative- and real estate solutions.
Posted by Nallely Martinez on Tue, Apr 24, 2012 @ 05:10 PM
How would you like to star up your operation having the right connections to obtain the desired results to get ahead, not only with your macro-strategy, but also within the community in which you operate?
For years, decision makers have underestimated the importance of industrial support when confronted with the decision of a new site selection. There are so many areas of consideration involved in the planning process of an offshore move that sometimes it is easy to leave aside indirect aspects of the business environment such as industrial support. Unfortunately, neglecting such factors may have a painful and costly impact that not all companies are able to overcome. In fact, this is part of the reason why business leaders have asked for the assistance of shelter services providers. Remember, it is important to make your offshore move confident and convinced that you have a complete view because having the right information at the right time can save you trouble, time, and money. Therefore, having a network of support in your new community can be an invaluable source of information and influence.
A city that recognizes the strength of industrial support is Juarez, Mexico, a manufacturing giant located directly across the border from El Paso, TX. This border region has become home to numerous manufacturing industries in the electronics, aerospace, medical and automotive sectors. Events like the upcoming Mexico´s Manufacturing Supply Chain Summit 2012 have been fundamental to reinforce the manufacturing movement in Mexico. This annual conference, along with other similar programs, has allowed industrial leaders to identify new business partners. Plus it also has enabled OEMs to meet with potential suppliers and expand their supply base. This year, the opportunity to build in relationships with competitors, suppliers, customers, and other business leaders would be granted to 50 companies including GM, Delphi, GE, Cardinal Health, Volkswagen, Hawker Beechcraft, Werner, and Electrolux.
Making the right connections, developing relations, and combining forces with local organizations, manufacturing associations, academia, and government entities is how industrial companies in Mexico have achieve great results. Leveraging cooperation has given rise to the modification or establishment of a particular curriculum, implementation of a training program for a workforce, development of lean manufacturing techniques for a specific location, creation of roads and infrastructure, etc.
This approach to world class manufacturing is not particular to the border region. Associations supporting the manufacturing industry have presence throughout the country. Index Association of Mexico provides assistance to both independent producers and manufacturers operating under shelter services.
It is important to mention that Mexico is a pro-business country where foreign companies have found talent, incentives, connectivity, support, and a great business environment to improve their operations. As you can see, Mexico has a lot to offer and it´s ready to help you achieve success…are you ready?
Therefore, if you are thinking on starting up manufacturing in Mexico, we invite you to sign up for our webinars where we will share the “whole picture” of what you need to know and do to successfully start up operations in Mexico.
Sign up for our Webinar NOW!
Better yet, regardless of the stage at which your company is right now in the relocation to Mexico or expansion of manufacturing operations in Mexico project, we are dedicating expert resources to sit with you on a one-to-one basis by offering you a FREE STRATEGY SESSION that will help you determine a cost-effective roadmap to land your project on your own terms.
Request your FREE STRATEGY SESSION TODAY!
If you are seriously thinking about starting up or expanding business operations in Mexico, we encourage you to take action fast.
Since we dedicate time only to serious projects, we can only offer a very few spots per month for the FREE STRATEGY SESSION. Register Now!
About American Industries Group:
American Industries Group is Mexico's leading manufacturing facilitator with over 35 years successfully landing manufacturing projects in Mexico from over 200 global corporations through shelter –administrative- and real estate solutions.
Posted by Nallely Martinez on Mon, Apr 23, 2012 @ 06:54 PM
Would you like to return to profitability applying a new business strategy that would allow you to regain strength by reinventing your production process?
A great number of manufacturing companies and troubled business leaders around the world have answered this question in the affirmative and perhaps the next lines will give you some insight as to why.
The need to keep up with constant changes in technology and consumers’ demand for innovative products has represented a prevailing difficulty for companies to remain competitive. In fact, this has become the reality and every-day battle for many electronics manufacturing companies including giants like Sharp and Sony.
“Sony Layoffs Confirmed: CEO Will Cut 10,000 Jobs, Turn Around TV Business” is an article that explains how this Japanese firm, once the most powerful leader in the electronics industry, has lost strength in the market due to an overall failure to maintain its “top-notch” innovative style. Today, Sony has been overpowered by competitors like Samsung Electronics and Apple Inc. --Situation that caused an economic loss of billions of yens and translated into a major reduction in Sony’s global workforce. Now, the company faces the challenge of finding its way back to the implementation of innovation design and development, and more importantly, to profitability.
Comments on this story have described it as an “alarming” topic, but even more alarming is the fact that this is only one of many companies that have found themselves in trouble after enjoying the taste of success. It is not unusual to hear about the struggling situations well-known companies encounter as they try to realign their business and regain strength.
Interestingly enough, common problems develop upon ignoring simple unusual solutions. Certainly, something has not been working right and it needs to be fixed. This might be a good opportunity to consider an overall turn and reorganization within your business. A very successful change in strategy would be moving your operation to Mexico. Readjusting your approach with an offshore strategy can be as helpful to your business as it has been to many companies that have been able to capitalize on the move to Mexico.
However, this would require more than simply comparing your current labor rate to the new, low cost one on your offshore location. If you were to find an expert opinion, a knowledgeable shelter services provider would let you know that the key to a successful offshore strategy is to analyze every single aspect both inside and outside your factory, such as business environment, industrial associations, materials and logistics, site selection, start up strategies, and more. In fact, one of the most important areas to consider is RH.
What would you think if instead of generating a layoff plan you would be asked to increase your labor force in order to return to profitability?
Well, even though this might not be the norm, manufacturing in Mexico requires an enhanced vision regarding your labor force because that is where the real savings are. This has been difficult to adjust since for more than twenty years companies have been focused on increasing technology and adding capital investment in order to reduce labor cost. In Mexico, you would be asked to move in the other direction. Perhaps you would need to re-engineer your process in order to take full advantage of the potential savings, but once in place, the benefits would speak for themselves.
The theory behind this case is very clear. Reducing production cost and optimizing resources represent savings and capital for future investment in research and development, which would trigger innovation revival and product improvement that will result in increased profits. However, every company is unique. Owners and decision makers must create an offshore strategy tailored to their specific business needs. Whether you are trying to come out of a downturn, or just to find new ways to excel, moving your operation to the most cost effective region in Mexico would always represent a great opportunity to enhance areas of improvement. So now is the time to think differently-- the time to think offshore!
Therefore, if you are thinking on starting up manufacturing in Mexico, we invite you to sign up for our webinars where we will share the “whole picture” of what you need to know and do to successfully start up operations in Mexico.
Sign up for our Webinar NOW!
Better yet, regardless of the stage at which your company is right now in the relocation to Mexico or expansion of manufacturing operations in Mexico project, we are dedicating expert resources to sit with you on a one-to-one basis by offering you a FREE STRATEGY SESSION that will help you determine a cost-effective roadmap to land your project on your own terms.
Request your FREE STRATEGY SESSION TODAY!
If you are seriously thinking about starting up or expanding business operations in Mexico, we encourage you to take action fast.
Since we dedicate time only to serious projects, we can only offer a very few spots per month for the FREE STRATEGY SESSION. Register Now!
About American Industries Group:
American Industries Group is Mexico's leading manufacturing facilitator with over 35 years successfully landing manufacturing projects in Mexico from over 200 global corporations through shelter –administrative- and real estate solutions.
Posted by Nallely Martinez on Tue, Apr 17, 2012 @ 06:56 PM
How would you like to reduce your overall cost as you increase the competitiveness and flexibility of you production processes in the middle of these challenging economic times?
To many business owners and decision makers, this may sound quite difficult, but you must know that it is definitely possible. This is the case for many European companies that have decided to outsource operations supported by a trustful shelter partner.
The shelter concept is a very particular one; especially for foreign companies like the ones examined on a recent study, where more than 50% of Spanish companies surveyed claimed to be either maintaining or increasing their demand for outsourcing at least for a portion of their operation as a response to the present financial crisis.
Working together with American Industries Group, the most experienced shelter services provider in Mexico, numerous European firms such as Greiner Assistec, Zodiac Aerospace, Souriau Connection Technology, Buhler Motor, Fokker, and others, have successfully transformed fixed costs into variable, centralized the firm’s major operation while delegating non-central activities to experts, optimized costs and improved process productivity, quality and results.
As a matter of fact, Volkswagen, a European automotive company originated in Germany, assigned its Jetta production exclusively to Mexico. This due to Mexico’s position as a manufacturing platform to service North America, rising wages in China and the complexity to implement JIT deliveries from Europe, India, and China. Having this in mind, in addition to the advantage associated with working hand in hand with the right partner has benefited innumerable firms within the manufacturing industry.
OEMs, electronics, medical devices, aerospace and automotive companies have taken advantage of partnering with a shelter provider who has “smooth rough edges” off their outsourcing strategy by managing administrative and legal infrastructures, hiring the right people, and providing and managing production facilities. Shelter providers have also been a key element to IT offshore to Mexico and other specialized industries.
For more than 30 years, this strategic alliance has allowed hundreds of companies not only to minimize risk, but also to reduce capital investment as they transition to Mexico. Therefore, if you are considering outsourcing, perhaps you would be interested on moving your operation to the most cost effective region confident that you would be guided and supported every step of the way because playing with the experts will always take you through to the road of success.
Therefore, if you are thinking on starting up manufacturing in Mexico, we invite you to sign up for our webinars where we will share the “whole picture” of what you need to know and do to successfully start up operations in Mexico.
Sign up for our Webinar NOW!
Better yet, regardless of the stage at which your company is right now in the relocation to Mexico or expansion of manufacturing operations in Mexico project, we are dedicating expert resources to sit with you on a one-to-one basis by offering you a FREE STRATEGY SESSION that will help you determine a cost-effective roadmap to land your project on your own terms.
Request your FREE STRATEGY SESSION TODAY!
If you are seriously thinking about starting up or expanding business operations in Mexico, we encourage you to take action fast.
Since we dedicate time only to serious projects, we can only offer a very few spots per month for the FREE STRATEGY SESSION. Register Now!
About American Industries Group:
American Industries Group is Mexico's leading manufacturing facilitator with over 35 years successfully landing manufacturing projects in Mexico from over 200 global corporations through shelter –administrative- and real estate solutions
Posted by Nallely Martinez on Mon, Apr 16, 2012 @ 04:22 PM
Why would a Japanese company consider Mexico over China when it comes to establishing an offshore strategy?
For years, China has been perceived as one of, if not the most convenient location by companies crafting an offshore plan regardless of their reasons to outsource their operations. If you take a closer look at today’s changing global economy, you will realize that in order to remain successful you must evolve at its pace. You will find out that it takes more than trends to make the right decision.
We live in a time of innovation where breaking the rule, reversing the process, or taking the whole into pieces might become the answer. This is exactly what Tohken Thermotech, a Japanese affiliated company for Exedy-Dynax, is doing. After considering both, Mexico and China, as feasible sites for landing operations by making a thorough analysis of each one of the industrial countries, the Japanese found Mexico to be the optimum solution disregarding factors pertaining to the Asian country in order to make the best choice, strengthen the supply chain and reduce logistic cost.
Regardless of China’s former popularity, certain cultural similarities, and geographical proximity to Japan, many Japanese companies have chosen Mexico as their offshore location. Prominent automakers such as Mazda, Nissan, and Honda constitute the top of the list of Asian companies that have found in Mexico a real partner compromised to the success of their offshore strategies.
The reasoning behind these decisions might be closely associated with Mexico’s recent development in the automotive industry, as well as China’s latest decline on key aspects such as intellectual property protection, comparative labor rate, and overall increase on production cost. Especially over the last year, adjacent to China’s economic growth deceleration, the Mexican automotive sector has developed into the center of attraction and investment for numerous companies. As a matter of fact, these companies have acknowledge Mexico’s proximity to major North and South American consumer markets, and the importance of reinforcing the protection of intellectual property , both product and process. Having your product compromised is one of the most underlying risks related to moving operations to China, where contracts are no guarantee and laws are not always enforced. In Mexico things are different, you can protect yourself. You just have to know “the how.” Moreover, the Mexican labor force is a skilled and experienced one on the manufacturing field. A great percentage is 100% bilingual. Therefore, communication issues are highly reduced.
Another advantage of operating in Mexico vs. China would be the reduction on total cost. Despite the fact that many would argue that China’s labor rate represents significant savings, it has been increasing on a continuous basis over the last years meaning that the gap between both countries’ comparative labor rates is becoming smaller. Without even mentioning additional direct and indirect costs associated with having inventory at sea for long periods of time, problem solving within a 12-13 hour difference, keeping up with JIT deliveries and logistics. So even though it true that transportation costs inflicted by moving manufacturing machines to Mexico might not be low, many companies would rather pay the one-time expense than facing the distress of constant challenge. It’s no wonder so many automotive manufacturers thought out the world including Europe, with Mercedes Benz and Audi, are considering Mexico to set their manufacturing facility.
Mexico has become industrial home to foreign firms looking for cost optimization. It is a country of industrial development and strong supporter of manufacturing processes. The automotive sector, as well as businesses focused on the assembly of OEM parts, recognize the opportunity of working on a country that has found its way to improve its competitive position against a giant like China and see it as a country that provides the perfect platform for decision makers considering a real offshore solution.
What is the most cost effective location for your manufacturing company in Mexico?
We can mention key regions like Chihuahua, Queretaro, Monterrey, Guadalajara and others. However the best location to start up your manufacturing operation in Mexico can be best selected if the site selection process is done in a thorough way.
So if you are thinking on starting up manufacturing in Mexico, we invite you to sign up for our webinars where we will share the “whole picture” of what you need to know and do to successfully start up operations in Mexico.
Sign up for our Webinar NOW!
Better yet, regardless of the stage at which your company is right now in the relocation to Mexico or expansion of manufacturing operations in Mexico project, we are dedicating expert resources to sit with you on a one-to-one basis by offering you a FREE STRATEGY SESSION that will help you determine a cost-effective roadmap to land your project on your own terms.
Request your FREE STRATEGY SESSION TODAY!
If you are seriously thinking about starting up or expanding business operations in Mexico, we encourage you to take action fast.
Since we dedicate time only to serious projects, we can only offer a very few spots per month for the FREE STRATEGY SESSION. Register Now!
About American Industries Group:
American Industries Group is Mexico's leading Automotive manufacturing facilitator with over 35 years successfully landing manufacturing projects in Mexico from over 200 global corporations through shelter –administrative- and real estate solutions.
Posted by Nallely Martinez on Mon, Apr 16, 2012 @ 10:40 AM
Looking for cost effective, pro-business strategic sites to outsource? How would you like to operate and enjoy the benefit of being part of one of the most convenient industrial locations in the world?
Innumerable companies within the manufacturing industry including Honeywell, Toyota, Ford, GM, Electrolux, Whirlpool, among others, have established operations in Mexico. But what is it about this country that so many well-known companies have selected it as their most cost effective offshore location?
The answer becomes evident as you look at Mexico’s effort to assist OEMs, Automotive, Aeronautic, and Aerospace clusters, just to name a few. A good example of this is the recent cooperation between President Calderon, Obama, and Prime Minister Stephen Harper to accelerate trade among Mexico, U.S., and Canada in order to strengthen their joint economies. Effort that will enable important trade benefits related to:
- Reducing transaction costs
- Vehicle emission standards
- Enhancing railroad safety
- Harmonizing rules on workplace chemicals
The leaders expressed concern for challenges affecting the manufacturing sector such as safety on the borders and the global financial crisis. They agreed on joint cooperation to restore and fortify safety and environmental issues, as well as, economic competitiveness with one objective in mind—to boost the North American economy.
Calderon recognizes the future impact of enhancing the Free Trade Agreement as a symbol for more opportunities, more savings, and thus, more successful manufacturing operations in Mexico. As for the industrial sector, this explains why North America is a very attractive area to start up an offshore strategy and why more decision makers are outsourcing to Mexico as it has become the most cost effective location in the area. Making it clear that Mexico has, is, and will continue working to offer great advantages to manufacturers and promote industrial success.
If you are thinking on starting up manufacturing in Mexico we invite you to sign up for our webinars where we will share the “whole picture” of what you need to know and do to successfully start up operations in Mexico.
Sign up for our webinars NOW!
Better yet, regardless of the stage at which your company is right now in the relocation to Mexico or expansion of manufacturing operations in Mexico project, we are dedicating expert resources to sit with you on a one-to-one basis by offering you a FREE STRATEGY SESSION that will help you determine a cost-effective roadmap to land your project on your own terms.
Request your FREE STRATEGY SESSION TODAY!
If you are seriously thinking about starting up or expanding business operations in Mexico, we encourage you to take action fast.
Since we dedicate time only to serious projects, we can only offer a very few spots per month for a FREE STRATEGY SESSION. Register Now!
About American Industries Group:
American Industries Group is Mexico's leading manufacturing facilitator with over 35 years successfully landing manufacturing projects in Mexico from over 200 global corporations through shelter –administrative- and real estate solutions.
Posted by Alejandra Ramirez on Fri, Oct 21, 2011 @ 06:57 PM
American Industries Group is holding its “Aerospace Industry in Mexico: BOOTCAMP” where decision makers from industrial companies who are interested in starting up manufacturing operations in Mexico will be able to:
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Learn about all the direct and “HIDDEN” costs of manufacturing in an offshore location.
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Ask all your offshoring questions and get answers from EXPERTS.
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Learn about REAL MANUFACTURING LEADERS who have already gone through the experience of not only starting up in Mexico, but actually lived there.
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Build your own ROADMAP to start up operations in Mexico with a 360º view and cost analysis.
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Determine what the best location will be for your offshoring project.
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Among other benefits.
To register go to: http://Bootcamp.AerospaceInMexico.com
Interested professionals who register will be able to receive frequent updates about the Aerospace Manufacturing Industry in Mexico, such as success stories of OEMs and suppliers, new projects landing on Mexico’s regions, and so on.
Companies like Cessna, Hawker Beechcraft, Nordam, CAV Aerospace, Fokker, Arnprior, AE Petsche, Safran Group, Kaman Aerospace, Soriau, BE Aerospace, Motion Industries, Zodiac Aerospace, among many other international aerospace manufacturing companies have leveraged from the high quality production culture and standards, yet low cost advantage that Mexico offers.
Posted by Alejandra Ramirez on Fri, Oct 21, 2011 @ 06:34 PM
Decision makers from Automotive Manufacturing companies thinking on starting up an operation in Mexico will be able to have a 360° angle view of every single aspect they need to know that will have a direct impact on their offshore bottom line.
American Industries Group is holding its “Automotive Industry in Mexico: BOOTCAMP” where decision makers from industrial companies who are interested in starting up manufacturing operations in Mexico will be able to:
-
Learn about all the direct and “HIDDEN” costs of manufacturing in an offshore location.
-
Ask all your offshoring questions and get answers from EXPERTS.
-
Learn about REAL MANUFACTURING LEADERS who have already gone through the experience of not only starting up in Mexico, but actually lived there.
-
Build your own ROADMAP to start up operations in Mexico with a 360º view and cost analysis.
-
Determine what the best location will be for your offshoring project.
-
Among other benefits.
To register go to: http://Bootcamp.AutoIndustryInMexico.com Interested professionals who register will be able to receive frequent updates about the Automotive Manufacturing Industry in Mexico, such as success stories of OEMs and suppliers, new projects landing on Mexico’s regions, and so on.
Companies like Goodyear, Lear, Sumitomo, Veyance, DTR, Stabilus, Yazaki, Automotive Lighting, Bühler Motor, Federal Mogul, Dana, Stoneridge, Polaris, Affinia, among many other international automotive manufacturing companies have leveraged from the high quality production culture and standards, yet low cost advantage that Mexico offers.
Posted by Alejandra Ramirez on Mon, Jul 18, 2011 @ 10:54 AM
By RANDAL C. ARCHIBOLD
Published: July 10, 2011
When the latest bloody headlines from the drug war in Mexico reach headquarters in New York, Ken Chandler, the manager of an American electronics manufacturing plant here, jumps on the phone.
He is not begging to come home. He is begging to stay.
“We try to put them at ease, to say it is not time to pack up,” said Mr. Chandler, who oversees the company’s operations in this border city, where the military arrived last week to help purge drug cartel members from the police department.
Not that his employer, Spellman High Voltage, needs much assurance. Like a crop of other manufacturers at the border, including six companies in this city alone, Spellman is expanding its operations, with a new plant under construction after making a calculation that offers one of the starker paradoxes of these violent days in Mexico.
Despite the bleak outlook the drug war summons, the Mexican economy is humming along, not without warning signs, but growing considerably faster than that of the United States.
Even as drug organizations battle for turf around them, more TV sets are being assembled, car parts boxed up and electronic widgets soldered together in the large manufacturing plants here known as maquiladoras. The result is a boomlet in jobs in some of Mexico’s hardest-hit cities, a bright spot in an otherwise bleak stream of shootouts, departing small businesses and fear of random death.
Over all, jobs in Mexico’s manufacturing sector increased 8.2 percent to 1.8 million as of January, the most recent figures available, driven mostly by what Mexican officials called regaining health in the auto and electronics industries, the engine of the economy along the border. Even Ciudad Juárez, which has both the highest level of violence and the largest number of maquiladoras, added 1.3 percent more jobs, to 176,824.
Mostly American-owned and in border states, the plants import raw materials duty free and export assembled products, lowering the cost of goods in the United States and providing jobs that pay more than the Mexican average (typically $8 to $16 per day on the assembly line) but a lot less than American wages.
Some of the new or expanding plants come at the expense of plant closings in the United States. Electrolux, which makes washers, dryers and other home products, closed a plant in 2009 in Iowa but opened one in Juárez last month that is expected to employ 400 people.
Others are from investors farther afield. Foxconn, a Taiwanese firm that makes iPhones, Dell computers and other electronics, is one of several Asian companies taking root. It opened a plant in Juárez last summer. Down the coast from here, Posco, a Korean steel manufacturer, has announced plans to expand its operations with a second plant that will employ 300 people by 2013. Several other companies plan to built or expand in other states as well.
The gains have not made up for losses during the global recession; many plants closed or have shed jobs for good, focusing on making their operations more efficient through automation and other measures, analysts said.
Still, border towns are showing some of their biggest signs of economic life in months. Over all, the Mexican economy, the second largest in Latin America after Brazil, grew 5.5 percent last year, its fastest pace in a decade, and is expected to grow 4.5 percent this year, driven largely by manufacturing as well as internal growth from an expanding middle class. The American economy, by contrast, is expected to grow between 2.7 percent and 2.9 percent in 2011, the Federal Reserve projected late last month.
Economists say Mexico’s growth would be even stronger without the cartel violence, which in the last five years has left more than 40,000 people dead, according to the count by national newspapers.
And given how central the American economy is to its welfare, Mexico could suffer if the recovery in the United States does not pick up speed. While trade with the United States hit a record last year of nearly $395 billion, foreign investment has lagged, suggesting that much of the job and economic growth is depending on existing businesses expanding or restarting production lines that had been waylaid by the recession.
The Bank of Mexico reports foreign investment was $17.7 billion last year, far off pre-recession levels of $25 billion and fed in good measure by a single transaction, the purchase of a one of the country’s largest beer companies by Heineken.
Monterrey, the country’s business and industrial hub, has exploded with violence in the past year, though even there, in the suburbs, some plants have expanded or announced plans to open. For better or worse, the plants are at once part of and apart from the communities that surround them, protected by tall fences, armed guards and cameras galore.
Posted by Alejandra Ramirez on Thu, Jul 07, 2011 @ 04:49 PM
When all eyes are focused on China, it is easy to overlook Mexico. For the last decade or so, the common view has been that China’s vastly cheaper labour and greater production capacity are too much to handle for Mexico’s manufacturing export sector.
But a research note on Tuesday by RBC Capital Markets comes as a timely reminder that in the battle for market share of US imports, Mexico is far from beaten.
Indeed, Mexico’s share of that market, the world’s largest, finished 2010 at about 12.5 per cent – the highest in a decade. At current trends, Mexico could even overtake Canada within the next five years or so to become the US’s second-largest source of imports.
One reason, as RBC points out, is that while Chinese wages were roughly 300 per cent cheaper than those of Mexico a decade ago, wage inflation in China and wage stagnation in Mexico have combined to close the gap to almost zero.
A second reason is simply that China is a lot further away than Mexico. That may not matter in a world of cheap energy, but today’s rising transport costs give Mexico an edge, particularly when it comes to heavy and bulky items.
Factor in Mexico’s skilled labour force and the effects of the North American Free Trade Agreement (Nafta), which shield the country from the potential threat of protectionism, and it is little wonder that foreign companies keep going to Mexico.
As if proof were needed, Mazda, the Japanese car manufacturer, announced last week that it would invest $500m in a car-assembly plant with a capacity of 100,000 units a year.
RBC’s bottom line? “Mexico is becoming more attractive for manufacturing, particularly that aimed at the US market.”
Source: BLOG FINANTIAL TIMES