Qualified Mexican Labor Driving Nearshoring Trend
Qualified Mexican Labor in high numbers is reversing industry’s perception that Mexico is only for simple assembly work. Over $30 billion has now been invested in ‘high technology’ manufacturing facilities in Mexico by companies from China, Korea, the United States, Spain, etc. As US companies continue to outsource manufacturing and production to regions with more affordable labor, Mexico has grown in prominence, driving a near shoring trend.
The Pull of Qualified Mexican Labor in Tijuana, Juarez and Mexicali
Among the myriad of benefits Mexico has to offer US companies in the realm of manufacturing, skilled labor is possibly the most attractive. Not only does the border region boast an impressive population of laborers, but the qualified labor in Tijuana, Juarez, and other border towns goes beyond simple assembly. In Tijuana, in particular, skilled engineers and technology specialists pull manufacturing south of the border from nearby California and other US locations. The low cost of this labor, proximity, and highly skilled talent make Tijuana and surrounding areas irresistible to US industry.
Manufacturing in Tijuana and other Mexican border cities has pulled numerous companies south of the border, such as Bazz Houston Co., Sony, True Games Interactive Inc., and other technology leaders. In fact, the majority of flat-screen TVs sold in the US are manufactured just south of California in booming Tijuana. And while many think of Asia as the home for low or medium skilled labor for assembling devices, qualified Mexican labor costs about the same as Asia’s medium. For example, the annual cost of a skilled worker in Tijuana or Juarez, Mexico is right around $4.50 per hour, fully loaded, vs. $5.00 per hour fully loaded in many countries in Asia.
Additional Benefits Pulling Manufacturing Investment South
Notable companies are investing heavily in Mexico, especially in the border region, but also throughout the country. Some of them come directly across the border from California, while others come from all over the US. And technology is not the only industry heavily reliant on Mexico’s skilled labor. Automotive, aerospace, and other industries have set up shop in the Latin American country, as well.
A few examples from just the past few years:
- Ford has invested $1.3 billion is Hermosillo.
- Kraft Foods has invested $600 million in Nuevo León.
- General Motors has invested $860 million in Silao, Bellas, and Toluca.
- LEGO has invested $125 million in Monterrey.
- DuPont has invested $500 million in Altamira.
- Eurocopter has invested $500 million in Querétaro.
In addition to low-cost, qualified labor, these and many other leading companies see in Mexico:
- Accessibility/Proximity: Mexico, and particularly the border region, is highly accessible to US firms, allowing management to be more direct and time to market to be minimal.
- Scalability: Depending on the skillset required and the scope of the project, Mexico offers excellent labor pools to choose from. In some cities, high technology manufacturing flourishes, thanks to aggressive university and training programs churning out thousands of engineering graduates annually.
- Infrastructure: Industry clusters thrive in Tijuana and the border region. The country has invested heavily in improved roads, energy, and ports, adding yet one more reason for US businesses to manufacture in Mexico.