August 20, 2014
We’ve been hearing this for the past three years: multinationals are moving to the U.S. to manufacture goods of all kinds. China’s days as the globe’s low cost producer are over. Hurrah for labor.
Not so fast.
One reason why manufacturing is returning to the U.S. is stagnant wages. Other reasons are because of logistics, location to other markets the manufacturer is targeting, and high productivity due to automation.
August 20, 2014
This story appears in the September 8, 2014 issue of Forbes
Everything you need to know about the future of the global auto industry is printed on the business cards of Carlos Lozano de la Torre, governor of Aguascalientes, Mexico, a central province named for its abundance of hot springs.
Seated at an enormous round table inside the ornate 17th-century government palace where he has his office, he reaches into the side pocket of his dark gray suit and shuffles through a stack: Here’s one version in German, another in Chinese, another in English. “I have them in ten languages, but I only speak Spanish,” he says with a chuckle as he hands over the English version.
August 18, 2014
08/18/14 Forbes. By Deanna Cioppa
As the cost of outsourcing manufacturing to China levels out with the United States, companies are looking for new places to set up shop—locations with competitive labor costs, optimal transport options and an open trading environment—and finding them much closer to home in sunny Mexico. There’s a lot that’s attractive about America’s neighbor to the south that may drive American manufacturing from China to just next door: A stable economy protected by government policy, a robust telecomm infrastructure and abundant natural resources. Regulation and macro-economics aside, part of what’s attracting foreign trading to Mexico is a combination of where it is, who lives there and who they trade with.
August 18, 2014
08/18/14 By Nathaniel Parish Flannery. Forbes
Over the last 20 years Mexico has emerged as a major automotive exporter. While Detroit has struggled to sustain itself as a world-leading automotive hub, Mexico has quietly become the world’s fourth largest automobile exporter. Chrysler builds HEMI engines and Ram pickup trucks in Saltillo, a city located 350 miles south of San Antonio in the Mexican state of Coahuila. General Motors builds Silverado pickup trucks in the state of Guanajuato, north of Mexico City. Mexico is actually home to North America’s largest car factory, a Volkswagen facility in Puebla that employs more than 16,000 people and produces more than 500,000 cars a year. Audi working on a billion dollar facility in Mexico. BMW and Nissan both have plans for billion dollar plants south of the U.S. border. Eric Farnsworth, the Vice President at the Council of the Americas in Washington D.C., told me “Investors see Mexico as an export platform with access to the United States.” While some observers may see Mexico’s auto industry as a threat to U.S. automobile production, a growing chorus of voices is advocating the concept of North American competitiveness.
July 25, 2014
Mexican factory exports fell in June by the most since last December, casting doubt on the strength of an economic recovery in Latin America’s No. 2 economy.
Factory exports dropped 1.4 percent in June from May, the national statistics agency said on Friday, after posting gains in the previous four months.
July 23, 2014
Mexico’s increasing purchasing power, as well as key reforms passed by recently elected President Enrique Peña Nieto, have contributed to what economic experts at HSBC say may become the world’s eighth-biggest economy by 2050. While it hasn’t received the recent media attention of other emerging economies like Brazil or India, Mexico has quietly positioned itself to be a major economic force in the long term.
One of the primary drivers of Mexico’s recent growth comes from the manufacturing sector. Merchandise goods rose three percent in 2013, a modest but encouraging gain, and one that is expected to improve over the remainder of 2014. Global economic recovery is expected to help Mexico continue its own improvement, especially in the appliances industry, which is expected to grow significantly in the near future. The Boston Consulting Group expressed substantial confidence in Mexico’s manufacturing, noting that manufacturing could add between $20 billion and $60 billion to Mexico’s economy through 2018.
June 2, 2014
New York Times, 06/02/14
SALTILLO, Mexico — Jason Sauey calls them lemmings — all the American companies that rushed to China to make things like toys and toilet brushes, only to be searching now for alternatives in Mexico and the United States. His own family-owned plastics company, Flambeau, nearly made the same mistake around 2004, he said, when competitors contracting with China undercut prices and seized market share.
Flambeau resisted, turning instead to its factory here in central Mexico. And now the company — which makes Duncan yo-yos, hunting decoys, plastic cases and an array of industrial items — is reaping the rewards, Mr. Sauey (pronounced SOW-ee) said.
Revenues at its Mexican plant have grown by 80 percent since 2010, according to company records, prompting a search for a second location near Mexico City. And in the past year, a dozen corporations have come to Flambeau and requested bids on projects worth tens of millions of dollars for things like smartphone cases and car parts.