Hecho en Mexico: The State of

Mexican car manufacturers


Mexico automobile BoomMexico has-been to my head for two years, ever since we came across a Canadian entrepreneur whom operates a tomato manufacturing company in Canada.

He stated in driving that their seasonal workers from Mexico out-pick their Canadian employees by a proportion of three to 1. "You must pay by the tomato, " we guessed, imagining only a financial incentive could develop these types of zeal.

"No, " he said, "they all result in the same. Some employees are simply working significantly harder. They apparently desire to."

Ask most Canadians for his or her view of Mexico, and also you're very likely to get two impressions — a longed-for vacation destination in wintertime or, increasingly, a dangerous and significantly lawless location.

But there is however a 3rd Mexico, and it's also one which Canadians ignore at our peril.

Mexico's benefits

Fly into Mexico City, a sprawling world-class money with a few 21 million citizens, and you start to see another region of the place.

If production there was clearly equated with low quality a decade and a half ago, which is no more the way it is. Mexico is now a respected location for makers.

Staff members work in the latest multibillion-dollar Honda car plant within the central Mexican condition of Guanajuato. It's challenging take on employees happy to make cars for $5 one hour, Amanda Lang writes, but there are more things Canadian policymakers can do to greatly help. (Eduardo Verdugo/Associated Press)

Wages are nevertheless dramatically less than similar jobs in Canada, and there isn't any question that is part of the appeal, but there's more toward Mexico story.

Trade discounts — including aided by the EU — mean shipping from Mexico to European countries, also to areas of Asia, are tariff-free.

Addititionally there is the geographic advantage familiar to Canadians: a detailed proximity to a giant trading partner, the U.S., and especially to its own booming production belt in south states.

The population is becoming more and more educated and skilled, therefore firms that used to send just basic construction work there are pleased now to own Mexican flowers manage advanced manufacturing.

a weak money has helped counterbalance natural increases in wages.

And then there is the out-picking event. It turns up in production, also — Mexican industrial facilities show efficiency gains at staggering annual rates, so a small business there actually becomes more lucrative every year.

How Mexico bucked the trend

Everything adds up to an era of growth and window of opportunity for Mexico.

As well as for Canada? Thus far, especially in auto manufacturing, it offers meant devastation. Lost tasks, lost investment, shuttered plants. Along with the huge auto firms, finally also the loss of great high-skilled jobs in associated sectors, like parts products.

Although story does not have to be among doom for Canada.

Yes, it really is difficult to take on a member of staff who is ready to make $5 an hour or so. No one wishes a "race into bottom" in which Canadian employees can't earn a living. But might Canadian employees accept a slightly reduced salary, if it kept the jobs here? As Mexican earnings undoubtedly rise, is it Canada's chance to get back in the battle?

Trade discounts here could be completed quicker. Our own output has to increase — we aren't almost because efficient, whatever the pay differential. But those actions are in your control.

Change them, and Canada could have a strong and growing production base for years. In the place of view the slow decline for this section of our economic climate, we could get moving. Starting with the low-hanging fresh fruit.



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