Mexico Manufacturing Re-shores U.S. Production Efforts
Mexico Manufacturing continues to expand, thereby benefitting “Re-shoring” efforts, according to a recent report by Dr. F. Barry Lawrence of the Texas-Mexico Trade Corridor Organization. Due to previous miscalculations in what Lawrence calls a failure by many companies to “think total” about supply chain costs when moving manufacturing to China, both U.S. and Mexico manufacturers are now making substantial adjustments; resulting in increasing Mexico manufacturing efforts. While Chinese labor costs may have once looked attractive, the combination of rising labor costs and underestimated transport costs, make Mexico much more attractive as a leading manufacturing source.
As many U.S.-based plants have caught up with this new reality, companies like Delphi who is investing $11 million in plant production, generating 2,000 new jobs and Hawker Beechcraft, investing $108 million in a new plant that will generate 600 new jobs, there is more and more evidence that Mexico manufacturing is a good option for ever-increasing total cost savings. Indeed Lawrence also notes that Boeing could be in a position to expand its pre-existing manufacturing presence south of the border to handle 787 Dreamliner production.