Automotive Manufacturing in Guanajuato

[mr bill]

Little Detroit?

From

To assist with your manufacturing in Mexico knowledge, within a 248 miles radius of Guanajuato you will find:

80% of the Mexican Market
70% of Industrial Establishments
70% of the Mexican Auto Market
70% of Foreign Trade
60% of the Total Mexican Population

[FULL STORY re foreign investment and education in GTO]

[peddler665]

I for one was impressed with the view of The huge GM truck plant South of town from my bus.
I read were Honda is building equally large facility. I'm image much of the prosperity of the area is a direct result.

[mr bill]

From

Auto Manufacturing Expands in Mexico11 May, 2012 20:03 CET

NAPS is an expert in the industry, identifying industry trends and providing administrative support services for companies interested in manufacturing in Mexico

The central region of Mexico has experienced substantial growth in the automotive industry due to a peak in interest from Japanese auto manufacturers, such as Nissan, Mazda and Honda and German auto manufacturers such as Audi and Volkswagen. Cities in the central region are closer in proximity to each other, which makes it advantageous for suppliers to shorten the supply chain to the larger manufacturers.

Japanese carmaker, Nissan plans to open a facility in Aguascalientes as announced by corporate earlier this year. The plant will open late next year in order to increase sales in the Americas. Mazda?s expansion in Guanajuato is centered around serving Central and South America while Honda chose Guanajuato with the idea that Mexico would provide flexibility and maintain competitiveness in the fluctuating market.

German luxury carmaker, Audi was the latest company to announce expansion into Mexico for its first North American manufacturing location. Audi recognizes Mexico as an opportunity for higher profit margins, price competitiveness, good infrastructure and close proximity to the U.S. Volkswagen, owner of Audi also has plans to establish a facility in Guanajuato.

[kasugie]

The technical schools and training centers are cranking out young, over-qualified graduates, and they're eagerly awaiting the opening of the Honda facility.

The newest business play to combat total outsourcing to China is to ship partially finished products from China in bulk to Mexico duty-free; and the product is finished and packaged in Mexico and returned to a warehouse in the U.S. or shipped directly to the end user, via NAFTA regs. A lot of that will be happening in the new inland port alongside BJX.

http://packaginginmexico.com/operating-model.php

In the meantime, telecom start-ups in the Philippines are making a move to grab the U.S. Spanish call-center business. Most "Marca dos para espa?ol" calls currently get routed to call centers in Le?n. It's an important segment of the economy here (especially for those speaking English) and has stemmed the loss of jobs in the shoe manufacturing sector. There's no telling how successful the Philippine start-ups will be, but needless to say, there are a lot of nervous workers around here.

[mr bill]

kasugie - you write: "...and has stemmed the loss of jobs in the shoe manufacturing sector"
Good or bad?
Sweatshop or OSHA?

I've done projects in both GM and USM de Mexico and can attest to higher wages, safer working conditions and lower density per sq m of workers per sq m of plant size.

You may be correct that there are surpluses of tech graduates awaiting jobs/careers but that is true most everywhere else in the world including the USA where a good percentage of waiters have BA's or above

[kasugie]

I don't believe Honda will be paying GM-level wages, and it appears the work week will be 50 hours. There will be no shortage of job applicants, however.

While working conditions are comparable to the U.S., wages at call centers in Le?n are low by any standards. But, even then, Philippine start-ups are making a play to offshore this business, by offering better English-speaking workers (compared to Le?n) working for half a bowl of rice, or whatever. I don't believe this will work out, as the Spanish learned and spoken in the Philippines is obviously different than Spanish spoken in the U.S. It may also be a ploy by management of the call centers in Le?n to get their people working longer hours without overtime or pay increases.

[SteveGinGto]

Bill -

Are they looking for any engineering help?

[SteveGinGto]

Kasugie: "I don't believe Honda will be paying GM-level wages..."

My take, if I may:

In reading Adam Smith's a bit in "The Wealth of Nations" some time back I was struck by his discussion of outsourcing, way back in 1776. All of this, then, is as old as the USA and even older - businessmen will try to find a cheaper source of labor; it is the natural course of events. At the same time, Smith's "Invisible Hand" - that when a businessman tries to improve his own prosperity he also helps the general prosperity - had to do, not with simple greed on the selfishness of businessmen, but Smith was talking about keeping the manufacturing local, that THAT was what the Invisible Hand was all about. If you don't believe me, go look it up. He was arguing that going overseas actually hurts the businessman's own local economy. No duh. That is exactly what we see happening.

Yet, there is little that can be done about it, given the global economy and the movement of money electronically around the world. Globalization was inevitable, sooner or later,, and when it did happen it was going to be at the expense of the nations with the highest labor costs. Germany might be seen to be one exception, due to the very high quality of technical training at the blue-collar level. Quality is capable of overcoming - and does - the lower quality of labor overseas.

I'd argue generally that the low level of blue-collar training - and education in general - in the USA made it increasingly cost-ineffective to keep manufacturing in the USA. That has less to do with unionism than some would assert, since unions other than manufacturing (plumbing, electricians, etc.) have strong apprentice programs that produce workers who do top quality work. Had the manufacturing sector (unionized or not) done as well, the outsourcing might not be going on. I am reminded of one company in the 1980s (name long since forgotten) who moved their entire production to Mississippi to take advantage of the low wages there. They came back north after less than five years, because the labor market there simply did not provide technically minded workers. It had been a disaster. That there are unemployed engineers around the world tells us that the level of technical training around the world is very probably up to the task, if given the opportunity. And the USA still discounts education, making the near future even more grim for "Made In America."