Northeast and Central Mexico Creating Jobs

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Posted by Warren Carter | Posted on 27-05-2010

Category : Job

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Mexico’s maquiladora industry is experiencing some significant recovery evidenced by a substantial increase in new Greenfield projects going into Monterrey, Saltillo, Reynosa and further south in such areas as Queretaro and Toluca. While many of these start-ups are additional manufacturing plant expansions, many others are the company’s first entry into Mexico. Unemployed job seekers in these markets are now being re-employed at an increasingly faster pace. Higher levels of security and a greater abundance of well educated talent is cited as contrubuting factors.

Other border regions such as Sonora and Baja California are also experiencing a recovery, however at a much slower pace. The security situation in Cd Juarez appears to be pushing some companies to consider moving their maquiladora operations to more secure locations.

Warren Carter is an Executive Recruiter in Qualifind, Inc. You can share your responses with Warren by e-mail at: wcarter@quali-find.com

Qualifind, Inc. provides professional and executive search services for specific disciplines and industries throughout the U.S. and Mexico. We are a U.S. based firm with our corporate offices in San Diego, California. We have branch offices and recruiting staff in the U.S. (i.e Chicago, Austin) and Mexico (i.e. Monterrey,  Mexico City).

A Mexican Technology Park in Monterrey

Posted by Warren Carter | Posted on 29-07-2009

Category : Manufacturing

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In a bid to move Mexico’s industry from manufacturing to “mindfacturing,” the new research facility has attracted many global corporations

By Pete Engardio

The mix of tenants may seem curious. A new research building for PepsiCo (PEP) stands next door to future R&D centers for Motorola (MOT), Mexican cement giant Cemex (CX), and a Mexican auto-parts maker. But for Mexico, this hodgepodge is the nation’s hope to turn industrial Monterrey into an “international city of knowledge.”

Mexico has made huge gains in export manufacturing in the 15 years since the North America Free Trade Agreement was signed with the U.S. and Canada. But it has not kept up with Asian dynamos like China in terms of physical infrastructure and training of skilled workers. Mexico also lacks the up-to-date, efficiently run science parks that are popping up around Chinese cities like Beijing, Dalian, and Shanghai.

The Research & Innovation Technology Park, known locally by its Spanish acronym PIIT, could change that. Spread over 172 acres near Monterrey’s airport, the park grew from a program called Monterrey International City of Knowledge, started in 2003 by Nuevo Leon Governor Jose Natividad Gonzalez Parás, aimed and coordinating the public and private sectors to help reposition the city. It also was part of a larger goal to boost Mexico’s per-capita gross domestic product from about $10,000 today to $35,000, the current level of industrialized nations, by 2030. Another target is to rank among the top 25 nations in global competitiveness.

A Place of Knowledge

“We want to move from manufacturing to ‘mindfacturing,’” says PIIT Director Reynold González. Rather than being known mainly for its maquiladoras—low-wage factories that export to the U.S. and Canada—”we want this place to be a maquila of knowledge,” he adds.

Monterrey already is Mexico’s premier base for manufacturing. Among the city’s big-name factory operators are United Technologies’ (UTX) Carrier unit, Ford (F), General Electric (GE), Lenovo, and Whirlpool (WHR). Metro Monterrey, which with a population of 4.7 million ranks third in the country, is also headquarters to several of Mexico’s biggest conglomerates as well as Mexico’s top engineering school, Tecnológico de Monterrey.

The diversity of labs at PIIT illustrates the breadth of the city’s economic ambitions. The park’s first $145 million phase, which is around 85% complete, includes research and development facilities by national laboratories and universities for nanomaterials, microelectronics, mechatronics, water-treatment technologies, information technology, and materials for sustainable housing, among others.

Motorola engineers already are moving into PIIT to design telecom devices. In December, construction will begin on PepsiCo’s $20 million circular glass structure that will house a “baking innovation center,” where among other things 200 staff will develop cookies and crackers for Latin America and the U.S. The roof will have solar panels and gardens.

Pillars of the Mexican Economy

By clustering so many technologies, PIIT’s managers hope the campus will help spawn hybrid companies and industries. “We want to create technology-based companies that will be pillars of the Mexican economy of the future,” González says. Only around 300 people now work in PIIT. But that’s expected to reach 3,500 by late 2010.

PIIT also aims to help Mexican tech entrepreneurs. To that end, the park has set aside a building to incubate nanotech startups. Another facility will be run by the IC2 Institute, a University of Texas at Austin program devoted to commercializing technology. Visiting IC2 faculty will teach a masters program in technology transfer. A $3 million venture-capital fund also is being set up. “Mexico lacks a system for commercializing ideas,” González says. “We are trying to work with top industrialists to get them to become angel investors, but it’s not easy because they are used to safer investments.”

Even though PIIT still is in its infancy, González says, Mexico City, Chihuahua, and other cities are already looking to emulate it. “There are many initiatives to set up knowledge cities,” he says. “We are getting visits practically every other week.”

Engardio is an international senior writer for BusinessWeek .

So Much for the Cheap ‘China Price’

Posted by Warren Carter | Posted on 23-06-2009

Category : Manufacturing

Tags: , ,

A new study says rising mainland wages and higher shipping costs, among other things, make Mexico a better choice for manufacturing

By Pete Engardio

So Much for the China Price

So Much for the 'China Price'

As purchasing manager for the North American arm of Japanese auto supplier Takata, Fred Heegan used to feel pressure to shift manufacturing to China. But when a customer pointed to a lower-priced Chinese part, Heegan would talk about the added challenges of quality, logistics, and engineering changes. “There are significant hidden costs to having supply lines that extend to China,” says Heegan, whose company manufactures auto parts in the U.S. and Mexico.

Heegan now looks like a visionary. A growing number of companies are moving beyond the usual considerations of labor and raw material costs in deciding where to produce goods to calculate the “total cost of ownership.” That means tallying expenses associated with things such as storage and delays. By this light, the so-called China price, which always seemed to be at least 40% below U.S. costs on everything from bedroom furniture to telecom gear, isn’t so low. In fact, China’s once-formidable edge in manufacturing has all but disappeared in some industries, according to a new study by Southfield (Mich.) firm AlixPartners, which researches and consults on outsourcing.

AlixPartners studied five categories of machined products, ranging from large engine parts requiring significant labor to small plastic components that need little. The cost shift has been dramatic. In 2005, AlixPartners found that by the time the items had arrived at a U.S. port, Chinese-made parts were 22% cheaper on average than those produced in the U.S. By the end of 2008, however, the average price gap had dropped to 5.5%, which often isn’t large enough to merit the hassle of manufacturing halfway around the world.

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