Why did US companies choose Mexico as their manufacturing hub?

Because of intense competition from overseas rivals, several US manufacturers have offshored part or complete production operations. When adopted in the right way, it lowers costs without poorly affecting quality, inventory, or flexibility. However, if done with inefficient research, it could take a toll on your product quality, delivery, or logistics, without giving the desired returns.

For several countries, offshoring means Asia. Though the labor costs may look attractive initially, with a closer investigation, you see a totally different picture. After considering productivity, salary, and logistics, Mexico ranked ahead. This is the reason why US companies manufacturing Mexico now.

Business-friendly

Because of NAFTA and USMCA agreements, the business relationship between America and Mexico has become good. The national government is helping the states to do business. There is also the development of technical colleges and universities.

Renowned American companies that shifted to Mexico

US companies manufacturing Mexico list is given below. There are big and small companies to name.

Medtronic

The medical device producer was based in Minnesota, but it shifted its production base to Mexico in 1970. Presently it has more than 12000 Mexican workers and runs six factories, with a major plant in Tijuana. The company produces medical devices such as stents, heart valves, and catheters sent to the US and other countries.

Molex

It is a producer of cable connection systems. It has its base set up in Guadalajara. They manufacture different complex electronic and fiber optic cables and products.

General Motors

GM shifted to Mexico during the 1960s and presently has four manufacturing plants. In 2018, GM was the biggest automotive producer in Mexico, with more than 800,000 cars. They have a strong local base of technological expertise with high-quality management systems.

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Curtiss-Wright

Curtiss-Wright is a defense, commercial and aerospace colossal with major operations in Mexico. Places like Sonora and Nogales house their factories, where it produces electronics and aerospace parts and spares. Their factory in Nogales is NADCAP accredited for welding and brazing. It complies with ISO 9002 and AS9100 quality management standards.

Honeywell

Honeywell is yet another industrial giant producing aerospace components. It started its operation in Mexico in 1936. The company produces high-quality products and has employed 12000 employees.

Shifting to Mexico

There were several challenges involved when the companies started shifting gradually. Legal and taxation issues, language and culture barriers, and technological and recruitment hurdles stood in between.

What eased the situation was working with a manufacturing services company. Most companies that have shifted their operational base to Mexico have opted for this approach.

They help US manufacturers establish one or several operations in Mexico without facing any problems. Even if the manufacturers have no idea how things work, they offer proper guidance. They handle everything from handling the legal and taxation issues to company registration and looking for a proper operation facility to recruitment, offering you a ready-to-run factory.

If you are looking for such help, American Industries Group is your one-stop solution to get instant help in setting up your manufacturing unit in Mexico. Speak to the experts to know all the details.

By Zain Liaquat

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