Auto Production Increasing In Mexico
 

The ground work was laid ... remember Ross Perot warning.

Plus Mexico is awashed with drug money.

No LA Times access.


Carl

Here you go.


The first Honda Fit rolled off the assembly line Friday at a new $800-million factory near Celaya, Mexico, a symbol of the growing might of the country's auto industry.
Honda's U.S. factories spit out hundreds of thousands of Accords and Civics each year. But when the automaker redesigned the Fit for North America, it turned to Mexico for an increasingly skilled workforce and favorable export rules.
Mexico already accounts for about 18% of North American auto production, but that's expected to jump to 25% by 2020 as automakers pour billion of dollars into factories, said Joe Langley, an analyst at IHS Automotive. The nation has joined Germany, Japan and the U.S as one of the heavyweights of auto production, he said.
U.S. auto factories have also kicked into a higher gear since the recession as auto sales have rebounded. But Mexico's plants are adding jobs and production even more quickly.
Mexico's auto industry employment has soared 46% to about 580,000 jobs since 2009, according to the Brookings Institution. U.S. auto employment has gained 16% in the same period.
Other U.S. manufacturers — especially high-value industries such as aerospace and electronics — also will see new competition from Mexico's industrial ascendance, said Mark Muro, a policy analyst at the Brookings Institution.
Mexico is also positioning itself as a global player in high-tech manufacturing. The nation's federal government boasts that more than 100,000 Mexicans graduate each year prepared for careers in engineering and technology. The aerospace industry in particular has boomed, with exports of more than $5 billion in 2012, a 16% increase over 2011.
Companies such as General Electric and Honeywell develop new turbines in Mexico, and numerous companies build engines in relatively new high-tech centers such as Queretaro in the central Mexican region known as El Bajio. Aircraft company Bombardier has rapidly ramped up production in Mexico, where it now builds major aircraft components.
But the auto industry is leading the charge, with low wages, high productivity and high quality, said Harley Shaiken, a UC Berkeley labor professor.
"The auto industry is critical, because it is among the most sophisticated of manufacturing technologies," he said. "If you can build a Honda Fit, then almost all other manufacturing is vulnerable."
Southern U.S. states have in recent years lured many new auto plants with lower wages and other enticements. But labor costs in the U.S. are now leveling out, Muro said.
"Mexico is the new South — the low-cost alternative," Muro said.
Nowhere is this more evident than in auto production, driven by free-trade agreements and an export push to Europe, the U.S. and Latin America, said James Rubenstein, an auto industry analyst and geography professor at Miami University in Oxford, Ohio.
"Mexico is hot, hot, hot right now," Rubenstein said. "While trade agreements are a controversial issue in the U.S., Mexico has embraced it fully, and it is now very easy to export out of Mexico."
Mexico has a network of 11 free-trade agreements covering 44 countries, many in Europe and North and South America, according to the Mexican government. Mexican autoworkers earn about $8 an hour, according to the Center for Automotive Research, compared with the U.S. average of $37.
But American manufacturers would be mistaken to think Mexico's growth relies solely on low wages, Muro said.
"You can't compete solely on labor costs," he said. "Mexico is developing a good supply chain and a good enough technical workforce to be very competitive. Meanwhile, it offers a strong international platform."
"For a while, Mexico was feeling the heat from China," Rubenstein said.
Now it's the other way around. Mexican labor costs are higher, but the overall cost of doing business and exporting products is lower. The Mexican plants, for example, have good access to both sides of the Panama Canal.
"The quality also is higher out of Mexico," Rubenstein said.



Copyright © 2014, Los Angeles Times



http://www.latimes.com/business/auto...#ixzz2u5EOQzmt

Thanks! No real surprises though. I still find it hard to believe that VW wanted to partner in a German style of union in that Tenn. even including the costs associated and the workers said F you. Hard to bitch about outsourcing with that happening.

Carl

This is really surprising in such a rapidly recovering economy.
DAMN that polar vortex.
http://blogs.marketwatch.com/thetell...MW_latest_news

Mexico is exactly what the corporate world wants. It's full of poor people so desperate for work that they'll do it just to be slightly less poor. They want the same conditions here and instead of trying to help the Mexican worker lift himself up, we're dragging ourselves down.

Smooth move. It'll make for a GREAT future for the next generation, I'm sure.

Dave

'Hunger Games' anyone? Our generation only had 'Soylent Green' :rolleyes:.

This country almost deserves what it gets, we have the corporate owned media pushing their toxic messages and the knuckledraggers sucking up every bit of slop from Faux news that they spew their way. Sad to say, it's all done 'cept for the cryin'. I'm sure glad that Patty and I won't be around to witness the 'Corporatocracy' finally do in the American dream. Time to redo the wills and leave what's left to a few good causes that are left, PBS and the ASPCA, maybe.;)
We should've emigrated 'Down Under' when we had the chance.

It's gonna be effin' ugly for all of you that have kids. Sorry to say. :(