Category Archives: Manufacturing

American Jobs Are Headed to Mexico Once Again

Mexican workers arrive for work at a maquiladora industrial park.
Mexican workers arrive for work at a maquiladora industrial park.

By Thomas Black / Bloomberg

After Donald Trump’s election, the flow of manufacturers setting up shop south of the border dwindled to a trickle. Ford Motor Co. and Carrier Corp., caught in Trump’s Twitter crosshairs, scrapped plans to move jobs to Mexico in two very public examples of the slowdown.

But now the pace is picking back up. Illinois Tool Works will close an auto-parts plant in Mazon, Illinois, this month and head to Ciudad Juarez. Triumph Group is reducing the Spokane, Wash., workforce that makes fiber-composite parts for Boeing Co. aircraft and moving production to Zacatecas and Baja California. TE Connectivity is shuttering a pressure-sensor plant in Pennsauken, N.J., in favor of a facility in Hermosillo.

While Trump hasn’t stopped pounding his America First bully pulpit and the future of Nafta remains uncertain, “there’s cautious optimism and a hopeful attitude that cooler heads will prevail in Washington,” said Ross Baldwin, chief executive officer of Tacna Services, which facilitates relocations.

Baldwin has seen the evidence: After business ground to a halt back in November, he’s now juggling two Mexico-bound clients. San Diego-based Tacna helps manage 4,500 workers in Mexico, where factory wages are about a fifth of those in the U.S. That may explain why Mexican manufacturing jobs rose 3.2 percent in January from a year ago as they dropped 0.3 percent in the U.S.

The renewed exodus shows how difficult it will be for Trump to turn the macroeconomic tide just by jawboning alone.

Trump’s plans to renegotiate Nafta and talk of punitive tariffs can’t erase the need to manufacture in lower-cost countries, said Alan Russell, CEO of El Paso-based Tecma Group., which also helps open and operate factories in Mexico.

“This isn’t about taking jobs from the U.S. — It’s about saving companies.”

https://www.bloomberg.com/politics/articles/2017-03-31/jobs-departing-u-s-for-mexico-again-as-trump-s-threats-ignored

Mexico is a leader in making medical devices

NYT – When President Trump threatens to redo trade deals and slap steep taxes on imports in an effort to add more manufacturing jobs, he focuses largely on car companies and air-conditioner makers. But the medical devices business makes a particularly revelatory case study of the difficulties of untangling global trade. America imports about 30 percent of its medical devices and supplies.

https://www.nytimes.com/2017/03/31/business/us-mexico-trade-medical-devices.html

Despite Trump pressure, companies plow ahead with moves to Mexico

Nucor is moving forward with Japan’s JFE Steel to build a new plant in Mexico to make steel for car makers.
Nucor is moving forward with Japan’s JFE Steel to build a new plant in Mexico to make steel for car makers.

By Andrew Tangel / Wall Street Journal

President Donald Trump boosted the hopes of employees at Rexnord Corp.’s factory in Indianapolis in December when he castigated the company for “viciously firing” workers and planning to move their jobs to Mexico.

Two months later, Rexnord is still planning to close the industrial-bearings factory, which employs about 350 people, despite Trump’s shaming and his earlier intervention to stop a nearby Carrier Corp. furnace factory from closing.

Rexnord says moving the plant to Mexico is part of a plan to save $30 million annually.

Executives at Peoria, Ill.-based Caterpillar are moving ahead with a restructuring that includes shifting jobs from a Joliet, Ill., factory to Monterrey, Mexico.

Charlotte, N.C.-based Nucor is moving forward with Japan’s JFE Steel to build a new plant in Mexico to make steel for car makers.

The continuing investments abroad underscore the scale of the economic forces that confront President Trump’s plans to persuade U.S. firms to stop moving operations — and jobs — to Mexico.

https://www.wsj.com/articles/rexnord-plows-ahead-with-mexico-plans-despite-trumps-pressure-1486555201

Ford’s retreat is a cautionary tale for manufacturers

LAT – For Mexican officials and global automakers, the site of Ford Motor Co.’s now-scrapped plans to build a $1.6-billion factory in central Mexico stands as the harbinger of a clouded future. The good times of hefty profits based on cheap Mexican labor and tariff-free exports to the United States might be coming to a crashing halt.

http://www.latimes.com/world/mexico-americas/la-fg-mexico-nafta-2017-story.html

Did Timkin pull plans to move from Ohio to Mexico?

Canton Rep – A website has reported that Ohio-based Timken Co. pulled plans to build a factory in Mexico in a decision “directly related” to President-elect Donald Trump’s proposals for border tariffs. A Timken spokeswoman in an email response said the report is inaccurate. “Timken does not manufacture in Mexico and we have not announced plans to do so,” the spokeswoman wrote.

http://www.cantonrep.com/news/20161207/did-timken-contemplate-building-plant-in-mexico

Trump influence could hurt both sides of border

Washington Post – If President-elect Donald Trump’s anti-free trade convictions are carried into his presidency, he could unravel the economic and geopolitical consensus that has guided relations in North America for the past quarter-century. Economists and rattled business leaders say the return of tariffs would sledgehammer the intricate border-crossing supply chains that have pushed bilateral trade to more than $500 billion a year, potentially wiping out tens of millions of jobs in both countries.

https://www.washingtonpost.com/world/the_americas/mexicans-believe-a-trump-trade-war-will-backfire–and-they-can-show-why/2016/11/30/103bb28c-a6c8-11e6-ba46-53db57f0e351_story.html?utm_term=.5f0a2f53ee62

More than one Indiana plant wants to move to Mexico

Huff Post – In the wake of President-elect Donald Trump’s apparent success in persuading Carrier not to close a U.S. factory, workers at another factory closing nearby hope they, too, can get Trump’s attention. Rexnord announced in October that it would be closing the bearings factory and shifting the work to Mexico.

http://www.huffingtonpost.com/entry/donald-trump-carrier-rexnord_us_583eee92e4b04fcaa4d5f0ca

Trump makes deal to keep 1,000 Carrier jobs from moving to Mexico

Donald Trump had repeatedly attacked Carrier’s plant-closing plans after a video went viral last February showing an official telling hundreds of employees of plans to close its Indianapolis plant. (Cristobal Herrera/EPA)
Donald Trump had repeatedly attacked Carrier’s plant-closing plans after a video went viral last February showing an official telling hundreds of employees of plans to close its Indianapolis plant. (Cristobal Herrera/EPA)

By Steven Greenhouse / The Guardian

Nine months after announcing plans to move more than 2,000 jobs from Indiana to Mexico, the Carrier Corporation said Tuesday evening that it had reached a deal with President-elect Donald Trump to keep nearly 1,000 of those jobs in Indiana.

Carrier said via Twitter that it would announce more details soon. Trump and Vice President-elect Mike Pence, who is Indiana’s governor, will appear at Carrier’s Indiana factory on Thursday to announce a deal.

During the presidential campaign, Trump had repeatedly attacked Carrier’s plant-closing plans after a video went viral last February showing a Carrier official telling hundreds of shocked employees of the company’s plans to close its Indianapolis plant. Trump has threatened to impose a 35% tariff when American companies seek to import goods they once made in the US but now produce in Mexico.

“Most people feel pretty happy about the news,” said TJ Bray, an assembly line worker for 14 years at Carrier’s factory in Indianapolis. “It looks like they’re staying.”

Bray said he and other workers were waiting to hear details about how many jobs would remain in Indiana, which jobs would remain, and what the president-elect had done to persuade Carrier to keep 1,000 jobs in the state.

https://www.theguardian.com/us-news/2016/nov/29/donald-trump-indiana-factory-jobs-carrier-mexico

How the U.S. election might impact factories in Mexico

Mexico’s industrial real-estate market has exploded since the North American Free Trade Agreement took effect in 1994.
Mexico’s industrial real-estate market has exploded since the North American Free Trade Agreement took effect in 1994.

By Robbie Whelan and Erica E. Phillips / Wall Street Journal

The U.S. presidential election is still days away but the impact of the campaign and its outsized focus on Mexico already are being felt in the market for warehouses and factories in border towns like Tijuana, Juarez, Monterrey and Saltillo.

Leasing of industrial space along Mexico’s northern border has slowed sharply as uncertainty has grown over how the election’s outcome—particularly a victory by Republican candidate Donald Trump—would affect demand.

Mexico’s industrial real-estate market has exploded since the North American Free Trade Agreement took effect in 1994 and created a unified market between Canada, the U.S. and Mexico, making it easier for manufacturers to take advantage of cheap labor, low costs and less-stringent business regulations south of the border. In the past decade alone, it has nearly tripled to more than 710 million square feet of space.

But the election of Trump—who has called for the U.S. to pull out of NAFTA—could have a chilling effect on the market in the short term, experts say.

If NAFTA were done away with, “on the Mexican side of the border a lot of the facilities will go vacant, rents per square foot will drop substantially,” said Tom Fullerton, an economics professor at the University of Texas at El Paso. “It’s not hard to imagine about a 30% to 40% vacancy rate collectively on both sides of the border.”

http://www.wsj.com/articles/how-u-s-election-may-impact-industrial-leasing-in-mexico-1478014248

Mexico stealing factory jobs? Blame automation instead

AP – Donald Trump blames Mexico and China for stealing millions of jobs from the United States. He might want to bash the robots instead.

Despite the Republican presidential nominee’s charge that “we don’t make anything anymore,” manufacturing is still flourishing in America. Problem is, factories don’t need as many people as they used to because machines now do so much of the work.

http://www.cbsnews.com/news/mexico-stealing-factory-jobs-blame-automation-instead/

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