Companies have long sought to capitalize on benefits by moving certain aspects of their business to other countries. In the United States, China has dominated this conversation in recent years. However, there are many reasons to consider the advantages of manufacturing in Mexico for U.S. companies looking to diversify their manufacturing options. In this article, we’ve listed five advantages of manufacturing in Mexico.
Low Cost, High Skill
It’s commonly been the assumption that manufacturing in Mexico is cheaper than the U.S., which is true, but what is often not known is the significant skill level of Mexican workers. The country graduates hundreds of thousands of skilled workers each year in an area that is massively literate and whose education system is substantial and growing. Additionally, the labor force is known both by reputation and research to be highly dependable. High quality coupled with low wages gives a complete picture of manufacturing in Mexico
Wages aren’t the only place businesses see savings, though. Manufacturing in Mexico offers a modern infrastructure that is quite affordable. Estimates in the U.S. suggest the average real estate cost per square foot between $9 and $20, whereas many estimates put it below $5 for Mexico. With this infrastructure comes easy access to the U.S. by air, land, or sea. Shipping can happen in cargo ships or semi-trucks, but business can also capitalize on U.S. rate structures for major shipping corporations.
Proximity to the U.S.
Shipping provides the perfect segue to the next advantage of manufacturing in Mexico: Proximity to the U.S. This is not only an advantage because of shipping, but also for travel, oversight, and setup. The employees that must travel regularly to the site will benefit from the proximity with shorter, more modest travel costs, helping to keep employees more energetic from less travel, and company costs down.
When providing oversight and training for employees of the worksite, Mexico offers a language familiar to many. It lends itself to the possibility of management for a Mexican worker, improving communication and rapport. Additionally, entry into Mexico from the U.S. is much easier for manufacturers than with other countries, like China. The overall quality of U.S. and Mexico relations helps, as well as common economic interests boosted by manufacturing in Mexico.
Mexico has more free-trade agreements than any other country, including more than the U.S. and China together. Manufacturing in Mexico provides access to the U.S. and Canada along with forty-four other countries with which Mexico has free-trade agreements. No tariffs on goods equal lower costs for companies.
Manufacturing in Mexico Provides Options
A good way to sum up the advantages of manufacturing in Mexico is to say that it gives U.S. companies more options to consider when diversifying their manufacturing. There are the obvious cost benefits and the not-so-obvious ones. The location is great with easy access to various shipping applications, and it is mutually beneficial to both economies. Add in an excellent, intelligent, dependable workforce, and you’ve got great reasons to look to Mexico to expand manufacturing.
If you want an example of a company who has taken the leap and is seeing great successes, look no further than Michigan-based LTC Roll & Engineering. Their state-of-the-art, 75,000 square foot facility in Celaya, Mexico is an excellent example of the advantages mentioned above. They are also planning a 250,000-foot addition in the future. Check it out at http://ltcroll.com/about/locations.