Is Mexico Becoming New U.S. Manufacturing Hub?

When both Ford Motor Company and Nabisco recently announced supplemental manufacturing facilities in Mexico, this was met with a “shoulder shrug” by those concerned with the acceleration of many businesses’ moves to greener foreign pastures. Most of such moves have been overshadowed by a relocation of corporate headquarters to save corporate taxes, especially by huge conglomerates spared payments amounting to hundreds of billions of dollars.

But Ford Motor Company, currently on a roll within the red-hot automobile manufacturing sector, has announced an even much greater focus on Mexico as the main center of future additional production, leading up to the latter part of the current decade.

This move, sure to be replicated by corporations increasingly beset by the following, is now in the planning stages by other manufacturing sectors for the following reasons:

•  The regulatory autocracy enforced by the free-wheeling Environmental Protection Agency is adding additional costs in increased manpower enforcement needs, while complicating these businesses’ previous unrestrained marketing opportunities.
•  The “Obamacare” mandate, eventually leading to a single payer healthcare structure, further detracts from corporate bottom lines.
•  The increasing pressure for a national $15 per hour minimum wage has increasingly concerned the Board of Directors’ of large conglomerates, as well as independent businesses. Together with an Administration call for a full-time benefit supported weekly hourly level lowered to 30 hours, instead of the current 40 hours, is being met with grave concern.
•  With China losing ground as a cost-effective provider of lower costs, the move to Mexico provides greater long-term business stability. This includes equal or better labor cost advantages, proven acceptable quality levels, whether finished goods or components; smaller orders and faster shipments from a Southern neighbor that seems to have an abundant workforce for greater availability.

With business, as well as the U.S. public in general, concerned as to the business-friendly approach by a successor presidency, the move to Mexico could be largely influenced in its intensity by the results of the November 8 presidential and Congressional elections; and their assumed approach to the good and welfare of U.S. business in its totality.

By Morris Beschloss, Special to the Desert Sun

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