Category Archives: Manufacturing

Despite fears, Mexico’s manufacturing boom is lifting U.S. workers

Workers assemble the Forte sedan on the floor of a Kia plant in Nuevo Leon, which began production in May. (Natalie Kitroeff / Los Angeles Times)
Workers assemble the Forte sedan on the floor of a Kia plant in Nuevo Leon, which began production in May. (Natalie Kitroeff / Los Angeles Times)

By Natalie Kitroeff / Wall Street Journal

Enrique Zarate, 19, had spent just a year in college when he landed an apprenticeship at a new BMW facility in San Luis Potosí, Mexico. If he performs well, in a year he’ll win a well-paid position, with benefits, working with robots at the company’s newest plant.

“When you start with such little experience, and get such a big salary, it’s unbelievable,” says Zarate, whose father is a taxi driver and whose mother is a housewife.

That sounds like an exported version of the American dream, circa 1965, in places such as Dearborn, Mich., or Marysville, Ohio. Indeed, the influx of those types of jobs to Mexico has enraged Ford employees in Wayne, Mich., and the makers of furnaces in Indianapolis.

But Mexico’s manufacturing surge has not been an unalloyed disaster for American workers.

U.S. manufacturing production, it turns out, is rising as well. Factory output has nearly reached its all-time high this year, and is up more than 30% since 2009.

The bottom line, say economists and company executives, is that what’s good for Mexico’s factory workers is good for some U.S. workers too.

http://www.latimes.com/projects/la-fi-manufacturing-boom-mexico/

Michelin plans to establish plant in Leon

Greenville News – Michelin executives say a plant under construction in central Mexico will have no impact on South Carolina operations. The French tire maker plans to build its 21st North American plant in Leon, Guanajuato, to produce tires for passenger cars and light trucks. The $510 million plant is expected to commence production in late 2018 and initially make up to 5 million tires a year to supply auto factories in Mexico and the North American consumer market, according to Michelin.

http://www.independentmail.com/business/michelin-says-mexico-plant-wont-affect-south-carolina-operations-36fa8925-6549-4ebe-e053-0100007f98f-385721261.html

Workers in Mexico’s border factories say they can barely survive, so they’re turning to unions

Workers in Mexico's maquiladora factories earn 20% less than those in China.
Workers in Mexico’s maquiladora factories earn 40 percent less than those in China.

By Mónica Ortiz Uribe / PRI

They make everything from puppy chew-toys to Dell computers to giant wind turbines, but when they try to form a union, they face big trouble.

For half a century, multinational companies have flocked to Ciudad Juárez in search of cheap labor at the doorstep of the United States. Today, El Paso’s neighbor has the largest labor force along the US-Mexico border. In good times, about 200,000 workers are employed at more than 300 factories.

Workers help fuel a half-trillion dollars in annual trade between the US and Mexico, a figure that’s grown six-fold in the last two decades. That’s brought prosperity to American border cities like El Paso, where one out of every four jobs is tied to trade and per capita income is rising at a faster pace than the national average.

But on the Mexican side, the peso has been falling in value, while wages have not kept up. According to a study by Mexico’s National Autonomous University, Mexico’s minimum wage has lost 78 percent of its value in the last 30 years.

A study by the Hunt Institute for Global Competitiveness at the University of Texas at El Paso shows factory wages in Juárez are among the lowest in Mexico, and plant manager salaries are among the highest. When compared to manufacturing wages in China, Mexico is now 40 percent cheaper.

“You can’t live on our salaries,” says Brenda Estrada, a former employee of one border manufacturer, the American telecommunications giant CommScope. “You just survive.”

Estrada is among those who say CommScope fired them last year for forming a union.

http://www.pri.org/stories/2016-02-29/workers-mexicos-border-factories-say-they-can-barely-survive-so-theyre-turning

Mexico vs. China: How the manufacturing hubs stack up

Sometime in 2011 or 2012, from a labor-cost perspective, it became cheaper to put manufacturing capacity in Mexico than in China.
Sometime in 2011 or 2012, from a labor-cost perspective, it became cheaper to put manufacturing capacity in Mexico than in China.

Quartz

With wages rising rapidly in China, Mexico once again has become an attractive manufacturing hub—even to the Chinese.

On Oct. 27, the state-owned China Communications Construction Co. signed a preliminary agreement with Jalisco to build an industrial park that would potentially house dozens of Chinese manufacturers, Reuters reported.

The deal underscores the big shift in production costs across the two countries.

In 2000, workers in Mexico’s manufacturing sector earned nearly 60 percent more than their Chinese counterparts.

Now they earn 11 percent less.

http://qz.com/538056/the-country-china-outsources-to-when-chinese-labor-gets-too-expensive/

71% of maquiladora job candidates not qualified

El Economista – Of the candidates for maquiladora jobs requiring technical work, 71 percent have educational or physical health deficiencies, a survey revealed. The results, covering surveys in 250 factories, showed that 42 percent cannot read, write or handle mathematical or have the  ability to follow directions.

http://eleconomista.com.mx/industrias/2015/08/21/ven-deficiencias-71-prospectos-tecnicos-industriales

Mexico’s falling electricity rates draw manufacturers

CNBC – A number of factors influenced Mexico’s slow but steady rise as a manufacturing hub for multinational corporations, including NAFTA, other trade agreements, cheap labor costs and proximity to the United States. But observers point to another recent development that they see accelerating investment in Mexico and boosting economic productivity: Electricity is getting cheaper.

http://www.cnbc.com/2015/08/10/mexicos-falling-electricity-rates-draw-manufacturers.html

Caterpillar is moving operation from Mexico to Texas

Business Journals – Caterpillar plans to move its vocational truck manufacturing operations from Escobedo, Nuevo Leon, to a plant in Victoria, Texas. Caterpillar opened the Victoria plant in 2012 and produces hydraulic excavators there. Now, it will expand the plant to design and manufacture vocational truck products.

http://www.bizjournals.com/sanantonio/news/2015/08/03/caterpillar-moving-manufacturing-from-mexico-to.html