News, Insights and Best Practices for Manufacturing in Mexico

Canada targeting job growth in Mexico's auto industry

28 Feb 2014

Category: Automotive Manufacturing

Mexico's auto industry is growing fast, with more manufacturers turning to the country for lower operating costs and reliability. It was recently reported that Mexico is likely to become the United State's top source for imported cars by the end of 2015. The boost in demand is good news for Mexico - additional jobs related to the auto industry will likely to be seen and foreign investments will increase.

Filling in-demand jobs
Currently, Canada is trying to recruit local mold, tool and die industry professionals to start operations in Mexico to fill demands in the auto industry, The Windsor Star reported.

"We have a tremendous need for local tool manufacturers," said Ignacio Altamirano, purchasing director at Nissan Americas, according to the source. "That is one thing we are requesting very hard. Hopefully with the help of the Canadian industry, we can have this in Mexico."

Altamirano made the announcement at the Automotive Parts Manufacturers Association's regional conference in Windsor, Ontario. He and a group of speakers touted the "tremendous opportunities" opening in Mexico's auto industry, The Windsor Star reported. Altamirano said manufacturing in Mexico provides "top-level product quality, cost competitiveness and on-time delivery."

Others said companies will follow their customers to Mexico.

"The increased emphasis on that need will drive more successful toolmakers and mouldmakers to Mexico, which will encourage us to follow," said Roy Verstraete, former president and CEO of Anchor Danly. "If we don't do it, others will start in Mexico and they'll come back to here and import back into our zones, Ontario Michigan, Ohio, and there's more risk way," he added. "If we start those facilities in Mexico, we will continue to have relationships and supply components to our customers. So, that's the benefit for us. And we'll also have the engineering and management skill levels reinforced here in the Windsor area."

Benefits of operating in Mexico
Mexico is expected to produce 25 percent of North America's automobiles in five years, according to Cesar Bueno, Mexico's trade and investment commissioner, The Windsor Star reported. There are numerous benefits driving companies to set up shop in Mexico. The low labor costs and flexible unions are some of the major benefits to doing business in Mexico, industry experts said, according to The Windsor Star. Mexico unions are more flexible and pro-business than many of the unions in Canada, as well, said Diego Zarroca, chief commercial officer at GE Capital Mexico. Also, Mexico allows companies to hire contract workers by the hour, the source said.

"It used to be hard to find people and fire them," Zarroca said. "You now can have the labor you need at any point of time."

Safety concerns, such as those regarding drug cartels, are also subsiding in Mexico, which is encouraging more companies to do business in the country. Company representatives that have operations in Mexico say they haven't had an incident with safety, and like any city, such as Detroit, businesses need to take certain precautions.

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