WCTI: Lack of Labor Keeping Harness Manufacturing Execs Awake at Night
Wire harness manufacturing executives remain concerned about the availability of labor, even as the global economy shows signs of improvement. This is according to the results of a survey of attendees at a recent webinar jointly hosted by Wire & Cable Technology International magazine and Entrada Group, a firm that guides wire harness manufacturers in setting up and running their own Mexico manufacturing operations.
When asked “what keeps them up at night,” access to available labor was the top response among webinar attendees (made up almost entirely of executives from US-based wire harness manufacturers). This isn’t surprising, at a time when many wire harness assembly operations in the US are not running at full capacity, for a variety of reasons. Many operations were already hampered by labor shortages prior to the COVID pandemic, only to encounter more challenges within the past 18 months due to a variety of factors: COVID-related shutdowns, employee absences (whether voluntary or involuntary), competition from other industries and more-generous-than-usual unemployment compensation from Uncle Sam.
Labor Shortage Remains Top Concern
While issues with labor relating to COVID have garnered the lion’s share of the headlines over the past 18 months, long-term workforce issues have been the prime concern of the entire manufacturing industry over a greater time horizon. According to the US Census Bureau, 25% of the manufacturing workforce is currently aged 55 or older. In addition, experts like Deloitte predict more than 2.8 million vacancies in the manufacturing sector over the coming decade, as baby boomers continue to retire and fewer younger people are in line to take their spots.
In addition, competition from other sectors is stiff. From jobs in warehouses and distribution centers to foodservice and hospitality roles, younger workers see industrial roles in a far less promising light, especially compared to the perception one or two generations ago. It’s clear to see why wire harness executives are stressed out and not sleeping: they don’t know where to turn for labor.
As I discussed with Wire & Cable Technology magazine editor Mike McNulty, during the webinar we co-presented, Mexico offers a viable solution to these concerns, featuring abundant available labor, cost-competitive operating costs and proximity to the US market.
Private Jet Tour of Mexico Manufacturing
Interest in our webinar was high, as wire harness executives are keen to find answers to their pressing labor challenges. Executives and owners from four wire harness-producing companies felt enough of a sense of urgency to join a daylong manufacturing VIP trip of central Mexico, courtesy of Entrada Group, and see for themselves the benefits the country has to offer, including a deep labor pool. This recently completed trip included visits to Entrada’s manufacturing campus in Zacatecas, Mexico, where visitors toured our 1 million+ sq. ft. manufacturing community and got a firsthand glimpse at the operations of several of our clients from the wire harness sector.
Our campus is home to more than 5,000 employees, approximately 2,700 of whom work in the production of wire harnesses. The average age of a worker at our manufacturing campus in Zacatecas is 27 years old. During the tour, we also introduced visitors to our newly launched Training Program, which offers the IPC-610 and IPC-620 certifications that many wire harness producers value as an essential element of their operation.
We will share an update and more detailed overview of this VIP manufacturing tour in the future with Wire & Cable Technology International readers.
Other Top Takeaways from the Webinar
While labor availability and rising operating costs were the main focus of the Entrada/Wire & Cable Technology magazine webinar, some other important themes stood out too:
- Concern about supply chain disruption – With shipments stuck in ports around the world and logistical issues around every corner, many wire harness manufacturers are taking steps to shorten their supply chain and implement regional production hubs.
- Upward minimum wage pressures remain – Manufacturers are concerned about ongoing pressure toward a $15/hour minimum wage.
- Mexico attracting a growing number of wire harness manufacturers – Competitive operating costs, US market proximity, and a youthful, abundant workforce make Mexico the most competitive wire harness production location in North America.
- Increased spread of EVs, electrification are promising trends –By 2040, the amount of wire and cable in vehicles will double from current numbers.
- Mexico leads the way – Mexico is the world’s largest exporter of wire harnesses for the automotive industry.
For a deeper dive into more of the statistics and takeaways from our webinar with partner Wire & Cable Technology magazine, please check out our blog post from August 2021.
I’d like to extend our deepest thanks to Mike McNulty for partnering on this successful webinar with Entrada Group and for his support over the years.
Entrada Group guides international manufacturers in establishing and running their own Mexico production. Our manufacturing support platform, staffed by the experts at our Mexico manufacturing campuses, assumes responsibility for all your general and administrative services, reducing cost and risk, and generating long-term growth.