Manufacturing investment in Ciudad Juarez, Mexico is booming.
American, and other industrialized countries’, companies are moving some of their manufacturing operations just south of the border at a healthy clip due to the benefits of doing so. Manufacturing investment in Ciudad Juarez recently experienced 9% growth in the form of 23,000 new manufacturing jobs from 2011-2012, according to data from the Mexican Social Security Institute (IMSS). Having given birth to Mexico’s maquiladora program in the 1960s, Juarez is now home to over forty industrial parks and at least three hundred maquiladora manufacturers, including such industry leaders as Electrolux, Bosch, Foxconn, Delphi, Visteon, Lear, Boeing, Cardinal Health, Yazaki, Sumitomo, and Siemens.
One of the factors involved in making manufacturing investment in Ciudad Juarez such an ideal option is, of course, its nearness to the US heartland, just miles from the largest consumer markets in the world. This proximity allows for lower shipping costs, convenient travel for corporate executives, and the simplicity of dealing with colleagues, suppliers and other parties to the production process in the same time zones.
In addition to geography, manufacturing investment in Ciudad Juarez is made attractive by a workforce that is made up of a high ratio of young, educated, highly skilled workers who have been fully acclimated to the preponderant presence of industry in the region. Literacy in workers over fifteen years old is ninety-seven percent. Universities and vocational training centers abound in the region, and students pursuing higher education have the choice of ten universities and thirteen technical schools located in the city from which to choose.
The city also has a more than ample transportation infrastructure, with most main highway arteries supporting six to eight lanes. Two interstates and the Pan American Highway connect all main points in both the US and Mexico. Additionally, the Ciudad Juárez is serviced by three rails: the Union Pacific, Ferromex, and Burlington-Santa Fe. When it comes to air travel, the Juárez-El Paso area has access to two international airports, providing access to all of Mexico’s major national markets, such as Chihuahua City, Monterrey, Tijuana, and Mexico City, as well as direct flights to the major business and residential centers of the US, such as L.A., Denver, Chicago, Dallas, etc.
Other obvious advantages to executing manufacturing investments in Ciudad Juarez include saving on tariffs because of free trade agreements, no value-added taxes at present, economic and political stability, competitive wages, and low-cost warehousing and distribution. Many companies simply find it attractive that their manufacturing south of the border actually contributes to job growth north of the border – as goods made in Mexico are typically comprised of forty-percent of materials from the US (whereas China’s exports are only 3% made in the US).
This has led to a directly proportionate ratio of job creation between Juarez and El Paso. Making manufacturing investment in Ciudad Juárez is not only smart for the companies who do so, but is also good for the U.S. – based manufacturers that supply them.