Mexico auto production rates with world's best

Ford expects Fusion to overtake Japanese sales champions
2012-09-23T00:00:00Z 2012-09-23T13:32:55Z Mexico auto production rates with world's bestJoseph Treviño Arizona Daily Star Arizona Daily Star
September 23, 2012 12:00 am  • 

When the 2013 Ford Fusion arrives in Tucson dealerships this fall, car lovers may drool over the car's James Bond style, cutting-edge gadgets and generous gas mileage.

Ford hopes this will be the car that dethrones the Japanese sales champs of the midsize family sedan market: the Toyota Camry, Honda Accord and Nissan Altima.

The Fusion is not built at Ford's Detroit-area headquarters or in one of its prized European factories in Spain, Germany or Belgium, but in the hot Mexican desert city of Hermosillo. The car already is rolling off an assembly line about 240 miles south of Tucson, on the outskirts of Sonora's state capital.

If it seems daunting that the Hermosillo plant will assemble a sedan able to defeat the best from Asia, it is. But Mexico's auto industry is big, modern and growing - and able to compete at the industry's highest levels.

And the stakes are even higher now that the Fusion faces domestic competition like Chevrolet's praised Malibu and the new Dodge Dart, which boasts the genes and pedigree of an Alfa Romeo sports car.

Fusion to be sold in Europe

Mexico is graduating about 90,000 engineers and technicians per year - more than in countries like Germany, Canada or Brazil.

Although the Fusion was drawn by European designers, at least 100 Mexican engineers helped to create it. And the car will be seen worldwide: It will be sold later in Europe as the Mondeo and it may also be sold in Argentina, said Fusion promoter Samantha Hoyt.

"Mexico, besides being good at manual labor, is being very good in intelligence, operations, in our youth's know-how when applied to work," Mexican President Felipe Calderón boasted last March, when he was in Hermosillo to announce Ford's latest $1.3 billion investment in the plant. The Hermosillo workers "are demonstrating once more that our country has talent, preparation and innovation to generate the best quality and at the level of the best in the world."

The Hermosillo factory is no third-world sweatshop, but an air-conditioned, environmentally friendly, state-of-the-art stamping and assembling facility, Gabriel López, CEO of Ford Mexico, said in a telephone interview from Mexico City.

The factory won the J.D. Power and Associates Silver Plant Quality Award. It uses the latest equipment and technology, including hundreds of robots, López said.

More than 3,800 veteran auto workers work there alongside young, well-trained recruits, all on a quest for automotive excellence.

On a roll

Mexico's car industry dates to the early 20th century.

Buick was the nation's first brand, and Ford started building motorcars there in 1925. By the 1960s many American, European and Japanese firms were building autos in Mexico but some left due to new regulations and taxes.

But in the 1990s the industry saw a rebirth, with many brands returning to Mexico. The Big Three - Ford, General Motors and Chrysler - all have a presence there.

Aguascalientes, in the central state that bears the same name, is considered a "Nissan town" due to the deep influence it has had in the city's ethos and workforce.

Since the early 2000s, companies like Honda have been producing some Accords and CR-Vs -considered paragons of reliability and at the top of their respective segments - in Mexico. After investing $800 million on a new factory, Honda will begin production in 2014 of an all-new Fit, the current champ of the subcompact genre.

In 1986, Ford and Mazda opened the Hermosillo plant and started operations with roughly 1,200 workers who labored only one shift and built about 240 cars per day. Sedans like the Ford Escort, the Mercury Tracer and the Mazda 323 were some of the first models rolling off the Hermosillo plant floor.

Along the way Hermosillo has garnered awards like the "Best Automotive Plant in the World" in terms of quality from the Massachusetts Institute of Technology while increasing production to three shifts, six days per week. Along with the Nissan Aguascalientes plant and Silao, Guanajuato's GM factory, Hermosillo is considered one of Mexico's crown jewels in terms of producing quality vehicles, said Manuel Molano, adjunct director of the Mexican Institute for Competition.

Lincoln made in Hermosillo

Mexico's auto industry is reaching beyond family cars into the luxury market.

The Hermosillo plant already makes the Lincoln MKZ, the Fusion's upscale sibling. Luxury brands like BMW and Audi will start building in Mexico soon, and Alfa Romeo may start assembling some sports cars there as well.

Confidence in Mexico's labor talent by the German automakers lured Mazda, formerly controlled by Ford and maker of cars like the MX-5 Miata - considered by many car experts to be the best and most reliable, mass-produced roadster of all time, said Jim O'Sullivan, head of the brand in North America.

With nearly 2.4 million cars built in Mexico in 2011 - most of them exported for sale in other countries - Mexico's rise as a car-building powerhouse has been established. And as of August, production was up 13.3 percent over the same month last year.

But that's not to say Mexico's growing dominance is accepted worldwide. Last year the commentators of "Top Gear," the popular British television show about cars, said there was no way the Mastretta - the first sports car produced entirely in Mexico - could be any good since cars often reflect the characteristics of their countries.

"So German cars are very well built and ruthlessly efficient, Italian cars are a bit flamboyant and quick. A Mexican car's just going to be a lazy, feckless, flatulent," joked Richard Hammond, one of the hosts.

The "Top Gear" incident died down after the Mexican Embassy in London protested and the show apologized. But some in Mexico's automotive industry say the joke is on those who doubt that factories like the Hermosillo plant are up there with the best.

They cite, for example, jazzy promotions in the U.S. like Fiat's "immigrants" television commercial, in which a cute Italian car jumps into the ocean and emerges as a sought-after "immigrant" in New York City. But it turns out the car is really a Mexican "immigrant," built in Fiat's Toluca plant and exported to the U.S.

Sonora-Detroit connection

Last year, the Hermosillo Ford factory exported 327,000 cars all over the world, including Saudi Arabia and Senegal. About 300,000 went to the U.S., said López, CEO of Ford Mexico.

Hoyt, the Fusion's marketing director, said once 2013 production is in full swing, Hermosillo will build 62 Fusions and MKZ's per hour. The plant also will also do something it hasn't done before: assemble five different power trains with multiple features.

The Sonora factory is up to the task - and it's time to shelve any lingering bias to the contrary, experts say.

K. Alan Russell, CEO of El Paso-based TECMA Consulting, a business group that specializes in international firms that work with Mexico, said that the country has had a bad rap with reports of drug violence.

"The industry was never a victim of that violence," Russell said. "Industry is thriving. Mexico is open for business."

As for quality issues, Russell, who knows Mexico's auto factories well, said all of the foreign assembly plants in the country, including Hermosillo's, have the full technological resources from their mother corporations in the U.S., Europe and Asia. They are at par with the best in the world, he said.

"They are breathtaking. You don't see new assembly plants in the United States often. These plants are strikingly exceptional. The quality, the technology is really exceptional," Russell said. "You can be in any first-world country anywhere in the world when you walk in these plants and never guess that you are in Mexico."

Contact reporter Joseph Treviño at 807-8029 or at jtrevino@azstarnet.com

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