Mexico growing on manufacturers

It now has advantages over China on fuel, labor costs, trade group told
2013-06-14T00:00:00Z Mexico growing on manufacturersGabriela Rico Arizona Daily Star Arizona Daily Star
June 14, 2013 12:00 am  • 

"Made in China" is giving way to "Hecho en Mexico," attendees at the Arizona-Mexico Commission's plenary session heard Thursday.

Rising fuel costs, coupled with higher labor costs in China, make North America more appealing to manufacturing companies, said Christopher Wilson, associate of the Mexico Institute for the Woodrow Wilson Center.

That is a financial boon for the United States - and especially for states along the Mexican border - because the shorter supply chain means bigger profits, he told the crowd of Arizona and Sonora business leaders and politicians meeting in Scottsdale.

For every dollar spent on manufacturing in China, the U.S. earns 4 cents, Wilson said. If that company manufactures in Mexico, the earnings are 40 cents.

Mexico's economy is growing faster than the U.S. economy, and although ours is much larger, "we have a chance to tap into that growing economy," Wilson said.

He said monopoly breakups, education reforms and a pact among the three main political parties could have a positive effect on Mexico's credit rating, making it more attractive to foreign investors.

"The hypothesis of saying 'We have to go to China' is fading," said Juan Carlo Briseño, who is with the Mexican Ministry of Economy's Pro Mexico program.

Mexico has emerged as a leader in the manufacturing of automobiles, medical devices, electronics and aerospace components.

Now China is casting a curious eye on the country to see what it's doing right, Briseño said.

In Sonora, where the average age is 25, aerospace manufacturing has taken off in the past couple of years with big companies readying to announce further expansion of existing operations.

Sonora has five international airports, two with cargo capacity, Briseño noted, making it a natural attraction.

Its proximity to Arizona as an export entryway is a selling point, he said.

The overview was presented in anticipation of today's sessions, when committees will meet to map out or approve joint plans and ventures in the areas of economic development, energy, real estate and infrastructure.

Just a little over a decade ago, the focus on these commission meetings was to school Mexico on how to do business with the United States, said Bruce Wright, associate vice president for university research at the University of Arizona.

"How refreshing for you in the Sonora business world to hear us talking about how to do business with Mexico," he said.

The Arizona-Mexico Commission meeting is being hosted by Arizona Gov. Jan Brewer and Sonora Gov. Guillermo Padres.

The two governors are expected to address the crowd today and will host a joint news conference.

Contact reporter Gabriela Rico at grico@azstarnet.com or 573-4232.

Copyright 2014 Arizona Daily Star. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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