5 Surprising Facts About Mexican Manufacturing

There are many myths about outsourcing to Mexico, including that Mexican manufacturers hurt U.S. workers, push out subpar products, and skirt manufacturing laws. These myths couldn’t be farther from the truth! Here’s why Mexican manufacturing is worth considering.

1. 40% Of The Money U.S. Consumers Spend On Mexican Manufacturing Comes Back To The U.S.

The United States and Mexico conduct a lot of trade. So much trade, in fact, that about 40% of every dollar that US consumers spend on Mexican products finds its way back to the US. This is according to the Woodrow Wilson Center, as reported by the LA Times.

The United States is Mexico’s top trade partner – most Mexican consumers and companies purchase goods and services from US companies every day.

As our CEO Juan Cintrón explained in a recent interview, Mexican companies and consumers often look to the US for services, products, and more. “We [are] the first country to say ‘America first!’ We always look to the United States first to find raw materials, equipment, and expertise, as do so many other Mexican manufacturers,” says Cintrón.

Other experts in the manufacturing industry would agree. Texas A&M University economist Raymond Robertson once pointed out that Mexican manufacturing is actually a part of our manufacturing process. “Mexican companies aren’t just producing products that rival ours,” he said. “They are producing parts of our products.”

Partnerships between U.S. businesses and Mexican manufacturers are mutually supportive, and they help sustain jobs in both the U.S. and Mexico. Win-win.

2. Labor Costs Are Lower (And More Predictable) In Mexico Than In China

While many people assume that Chinese manufacturing is low cost, it’s actually Mexico that is the world’s low-cost labor leader. Mexican labor costs are 20% lower than China’s, making it one of the world’s lowest-cost manufacturing countries.

Additionally, Mexican labor costs are fairly steady compared to other economies (like China). In the past 20 years, Mexican labor costs have been climbing at a steady, predictable rate. The combination of low costs and predictability have helped make Mexico one of the world’s leading manufacturing nations.

3. Mexican Manufacturers Employ Highly-Skilled Labor

Skilled workers are the backbone of our company and Mexican manufacturing as a whole.

Despite the low labor costs, Mexico churns out one of the biggest highly skilled labor pools in the world. In Mexico, you’d find more manufacturing, construction, and engineering degrees per capita than in the United States. That’s one of the many reasons that manufacturers are opening facilities in Mexico, or contracting with existing Mexican manufacturers.

4. Mexico Enforces Intellectual Property Laws Consistent With US And Canadian Law

The intellectual property laws in Mexico are almost identical to those in the U.S. and Canada. Mexico’s legal system takes intellectual property laws quite seriously and enforces them accordingly. That means a few things:

• Because Mexican manufacturers adhere to intellectual property laws, you don’t have to worry about anyone stealing your ideas, products, or designs.
• Protecting your intellectual property rights in Mexico is much easier than doing it in China.
• Mexico’s legal system offers foreign businesses legal recourse in ways that many legal systems do not

Your intellectual property is much safer in Mexico than it is in China, as Chinese manufacturers account for as much as 80% of all intellectual property theft from U.S.-headquartered companies.

5. Hundreds Of Fortune 1000 Companies Work With Mexican Manufacturing

Outsourcing – or “nearsourcing” – manufacturing to Mexico has been increasingly popular for decades. All kinds of businesses, including auto parts companies and hundreds on the Fortune 1000 list, are either operating or contracting with Mexican manufacturers.

This trend has accelerated due to increasing labor costs, high shipping costs, and a variety of other problems (customs issues, IP concerns, labor and safety concerns) have discouraged many from Chinese manufacturing. 

What Does It All Mean?

Any company that’s in the business of manufacturing should take a long, hard look at their options in Mexico.

Even for US and Canadian companies that want to keep the bulk of their manufacturing operations in their home country, Mexican manufacturers can be used to produce components and assemblies. This is a win-win as the company can maintain a manufacturing footprint in their home market while also cutting costs.

If your company is interested in learning more about Mexican manufacturing, please contact us.