Mexico's Competitive Advantage

Mexico is the 8th largest manufacturing economy in the world, and ranks 7th in the world in Deloitte’s competitive index calculation. Employee competencies in manufacturing and a high willingness to work are quickly becoming two of Mexico’s notable advantages over other industrialized countries. When lower cost, greater skills, and improved employee attitude come together, manufacturers experience more productivity, higher efficiencies, and ultimately more satisfied customers. This is Mexico’s competitive advantage.

An Educated “Can-Do” Labor Force

Mexico’s layered educational system bridges gaps between the knowledge received in high school and that obtained through a college degree. Federal and state-funded schools like the Insituto Tecnologico (IT) and Universidad Tecnologica (UT) offer trade-specific skills development and degrees similar to those found in the U.S. community college system.

Beyond increased educational competency, the labor force in Mexico presents a positive manufacturing workplace attitude. Though often an innate characteristic of the individual worker, workplace attitude is also highly influenced by the culture of motivation created by employers. In foreign-owned manufacturing operations in Mexico, “can-do” and “will-do” attitudes stems in part from the competitive nature of a Mexican worker, and partly from management’s ability to create an environment that challenges workers and gives them the required elements to succeed.

Greater Skill, Lower Cost

In Mexico, fully-fringed compensation for low-skilled factory workers is approximately 80% lower than the USD $12 per hour wage typically found in the U.S. or other similar high-wage countries. Skilled machinists and welders cost employers about 50% less, and entry-level engineering positions have a 40% lower employer cost.

While the automotive industry has been one of the fastest growing manufacturing sectors in Mexico, other industries such as medical, electronics, aerospace, HVAC, and metalworking are creating transferable workforce competencies that are applicable to any advanced, technology-intensive manufacturing operation. The use of robotics, automation, six sigma, lean, ISO and other industry-specific quality standards are not only commonplace in Mexico – many of the leading manufacturing innovations implemented worldwide are coming from factories in Mexico.

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