May 11, 2016

Mexico is Much More than Just a Destination for Lost Jobs

Earlier this year, Carrier Corp. made major news when it announced plans to shift production of air conditioners from Indianapolis to Mexico, a decision that cost the U.S. a few thousand manufacturing jobs and became a key talking point in the 2016 election. In the simplistic sound bites of campaign rhetoric, Mexico was reduced to just another job-stealer, the likes of Japan, China and India, among other developing nations.

The reality is considerably more complicated. Yes, the manufacturing jobs in Indianapolis are gone, an undeniable hardship for too many Indiana workers. But for many reasons, Mexico is not simply another China, as a visit to last week’s FABTECH Mexico demonstrated.

Among the laser cutting machine displays, coil coating demonstrations and welding equipment booths at the trade show in Mexico City sat a group of representatives from the U.S. Department of Commerce. Their presence underscored a truth about how Mexico differs from other countries where American manufacturers have relocated operations. The DOC’s U.S. Commercial Service was on hand to promote U.S. exports into Mexico, though such advocacy is hardly necessary. As the list of U.S.-based equipment manufacturers at Centro Banamex demonstrated, American companies are already capitalizing on Mexico’s industrial growth.

Unlike previous outsourcing experiences in the Far East, U.S. manufacturers continue to be the chief supplier of products and services to the Mexican market. In most heavy equipment categories, the U.S. is the prime supplier of products. U.S. companies exported more than $8.1 billion worth of machinery to Mexico in 2015, reported Kent Campbell, a representative from the Commercial Service.

And it doesn’t stop there. Among those hosting booths at FABTECH were U.S. metal producers, service centers and fabricators, all of whom send material into Mexico to support an industrial base with a still-maturing supply chain. Some of those companies may ultimately add a location in Mexico to be closer to their customers. However, others will continue to take advantage of the simplicity of moving goods from one NAFTA nation to another.

“The only barrier we have to exporting here is the strength of our currency,” says Mario Vidaña, Campbell’s co-worker with the Commercial Service.

Sure, the U.S. has lost some jobs to Mexico. But demand for American goods in Mexico has also created new jobs in the U.S. So don’t be too quick to condemn our neighbor to the south. Mexico is one of our most important trading partners.


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Tuesday, December 12, 2017