Mexico Manufacturing Benefits Attract US Manufacturing
As global competition has increased for US manufacturing companies the discovery of Mexico manufacturing benefits has charted new waters for management to navigate.
However, discussion of radical changes made by Donald Trump in the past few months have caused the economy to fluctuate. Manufacturing businesses have responded by modifying their plans and becoming more flexible to change. As the economy becomes more fragile, U.S. companies must adapt. They are developing new strategies for the well being of both their present and future businesses. However, Trump’s promise to keep U.S. businesses within U.S. borders by barring movement to foreign countries has impacted many business owner’s decisions.
Companies have to make difficult decisions about adjusting their budget plans as they respond to economic fluctuations. CEO’s must think strategically when creating and delivering a product in order to compete with other companies. When changes like this are made, factors such as quality are not always the most important. Regardless of the product’s quality, if a competitor is producing higher quantities in a more cost efficient manner then they are more likely to generate revenue and build success. This way of thinking varies among companies. A certain strategy, such as choosing quantity over quality, may work for one company while it does not work for another company. For many, the best strategy is to look at Mexico manufacturing benefits.
Many businesses have taken extreme measures at their own risk by moving plants and headquarters out of the country. Hiring workers from another country where the wage is much lower can significantly reduce production and other costs. Some CEO’s have opted for hiring workers in Mexico to do the same job an American would have done in the past but at a much lower cost. NAFTA (North American Free Trade Agreement) has made hiring Mexican workers the simplest choice for U.S. companies because it facilitates bringing goods into the U.S. duty-free. The decision to move manufacturing to Mexico where employees provide the exact same product at much lower costs without compromising quality or quantity has tremendously benefited both Mexican lives and revenue for U.S. companies.
There is an increasingly larger wage gap between Mexico and America. Despite lower wages, Mexicans who have had the opportunity to work for U.S. companies have experienced a positive impact in their lives economically and professionally. This has been a source of controversy among Americans. They see the situation as if they are losing their jobs to foreigners.
There have been varied concerns and ideas regarding the companies that have decided to hire employees in Mexico. Economists propose that the benefits of moving manufacturing to Mexico can be seen in both countries. Others have agreed that hiring Mexican workers hasn’t had any effect on the low employment rate in the U.S. nor the loss of jobs.
On the other hand, many manufacturers in the U.S. have opted to use robots to do certain jobs. They have a few workers overseeing the machines’ efficiency rather than paying twice as many workers to do the manual labor. However, in Mexico it is cheaper to have humans do the labor at a much lower wage than it is to employ the use of robots. This is why companies are utilizing this strategy to stay in competition with rival companies.
Countless companies are reaping the benefits of manufacturing in Mexico. It is apparent that the positives far outweigh the negatives. Despite push back from people like Donald Trump who believes that all U.S. companies should be kept within the U.S., many companies have gone ahead with foreign manufacturing, and the economy was still able to generate high numbers of jobs since December 2016. Providing work opportunities for citizens in our neighboring country has shown to improve overall manufacturing in the U.S.
The trend of US companies exploring Mexico manufacturing benefits will surely continue. Time will reveal whether or not this trend is a threat to American jobs and economic stability.
The best first step for companies interested in learning more about Mexico manufacturing benefits is to contact a company that specializes in Mexico; the Tecma Group of Companies of El Paso, Texas and San Diego, California.