Why move manufacturing
US manufacturers relocating operations to Mexico enjoy much lower labor costs than in the US while leveraging a highly skilled labor force and world-class facilities just south of the border.
Benefits of Manufacturing in Mexico
Leverage cost savings without leaving the continent
The benefits of manufacturing in Mexico enable US manufacturers to achieve dramatic cost savings without leaving the continent. Offshoring comes with its own drawbacks. But doing business in Mexico means reliable infrastructure, shorter lead times, highly skilled labor – all at costs ranging from 50-70% lower than in the US.
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To facilitate manufacturing for export, the Mexican government established the Maquiladora system, now known as IMMEX. This acronym loosely stands for Maquiladora Manufacturing and Export Services. This program allows manufacturers in Mexico to temporarily import foreign inputs and equipment tax free to produce goods made for export. No general import tax. No value added tax (VAT).
The program offers broad consideration for raw materials, equipment, tools, and even shipping containers and fuel. US companies who wish to leverage the advantages of manufacturing in Mexico can do so with little to no tariff and tax exposure – especially when partnering with a shelter provider.
Simplify with Shelter
Just what is a shelter service, and how can it help?
Perhaps you have a robust manufacturing operation in the US, but want to move manufacturing to Mexico to reduce costs. Opening a factory in a foreign company is layered in bureaucratic complexities, liabilities, and logistics hassle.
A shelter is a legal structure already established in Mexico under which you can operate as a division. This allows you to focus only on core functions while the shelter company handles everything from tax compliance to import/export to accounting and HR.
Helping manufacturers of every size and industry leverage Mexico’s benefits quickly and easily
Get Strategic with a Cost Reduction Analysis
Nearshoring your operations to Mexico involves a lot of moving parts. Not sure what the numbers would look like for your situation?
Our strategic advisors will analyze your specific circumstances, identify key areas of comparison, and provide a detailed cost analysis so you don’t have to guess. Get the numbers. Find out if Mexico makes sense for you.
Facts about Mexico
Labor in Mexico
The labor force in Mexico is highly diverse and trained for a broad range of technical functions. Companies who move manufacturing to Mexico draw from a deep pool of workers, not just for assembly, but for technically demanding roles in increasingly sophisticated markets.
Mexico’s manufacturing workforce is young (42% are 20-49 years old). They earn 70% less than their US counterparts, yet consistently rank in the top for quality and productivity due in part to their 48-hour workweek. Many of them are bilingual – especially in border cities like Juarez and Tijuana. Tecma has decades invested in recruiting skilled workers for roles such as welders, leather-sewing operators, CNC machine operators, and more.
Security in Mexico
While the media is quick to showcase stories of drug violence or human trafficking along the US-Mexico border, Mexico is an increasingly safe place to do business. Border cities like Juarez and Tijuana do have a history of violence in the past, but much has been accomplished in recent years to increase security and public safety.
Both the Mexican and US federal governments provide security forces to keep the peace along the border. And the crime rate in major Mexican cities is comparable to that in any major US city.
In addition to government checkpoints, industrial parks are utilizing security measures such as gated perimeters and non-stop security solutions. Tecma and others also offer physical security services to ensure workplace safety.
Manufacturing Facilities in Mexico
Mexico leads the way in state-of-the-art industrial space. Though industrial real estate typically sells for 50% less than in the US, Mexican facilities lead the world in technological integration and capacity. In fact, many of the modern processes and systems like robotics, automation, six sigma, lean, and ISO are commonplace or were even pioneered in Mexican factories. These Class A industrial spaces provide the best potential for US manufacturers to take advantage of lower operational costs while still enjoying capabilities on par with facilities in the US.. Tecma’s shelter solution includes finding the best possible facility or site for US clients.
Infrastructure in Mexico
Mexico takes infrastructure improvements very seriously. The country has already gone to great lengths to improve highways, open new ports, strengthen the electrical grid, and bring telecommunications advancements into every industrial region.
The current presidential administration is aiming to spend 4.1% of Mexico’s GDP on further infrastructure improvement. Now, a truck leaving Mexico City can reach nearly any border city within a matter of hours. The country boasts broadband internet throughout the country, 2,000 airports, a growing railway network with numerous high-speed projects underway, and federal highways like US interstates connecting all major cities. A Mexican site visit from headquarters in the US is only a short plane ride or single-day road trip in most cases