With so many changes in the trade regulations and changed discussions about NAFTA, the Mexican manufacturing base is under some scrutiny. A heap of myths are rising related to the increase in exports to Mexico sourcing organizations from the United States and other Asian countries. These myths and misunderstandings about the Mexican manufacturing base are baseless. And this is exactly what this context will shed light into.
In this context, all misconceptions with the manufacturing base in Mexico will be debunked. This will help squeeze out any misconception that has just started forming its roots for those considering Mexican plant as a part of their supply chain. Read on to know the so-called myths passed on and also learn about the facts behind them.
Myth #1: Some say that trade relations with Mexico hurts the workers of United States
Fact: While this is fairly true, but a lot more beneficial for the economy of the United States. First of all, the manufacturers have moved from the US to Mexico and tried building their business relationship with the Mexican organizations as these organizations were willing to work at low production cost. Lower cost of production leads to reduced pricing of the manufactured goods. This would ultimately help the United States customers to get more value for their dollars. Therefore, building business relationship with the Mexican organizations is beneficial as it directly contributes to the increase in economy of the US.so, while some US workers suffer for this, a vast majority of the workers benefit.
Most of the populous countries of the US, including Texas and California have long been involved in a commercial relationship with Mexico sourcing organizations. According to the statistics revealed by the Wilson Center Mexico Institute, more than twenty percent of the exports from the US to Mexico. Mexico has remained the second largest export market of the US and in large parts because of synergies in the auto manufacturing market. This might hurt the United States workers, but a majority of the country enjoys its benefits. Basically, it will be more accurate to say that sending exports to Mexico hurts some of the workers of the United States but help many more US customers. It is because lowered prices makes buying goods affordable for the US customers, which helps the US economy.
Myth #2: Some people are of the opinion that goods manufactured by Mexican manufacturers are of low quality
Fact: This is completely a false acquisition brought against the Mexican manufacturers. To begin with, more than one lakh and fifteen thousand Mexican engineers are graduated in technology and science careers every year. This is a clear evidence of the knowledge and experience the Mexican students gather in their field of endeavor, which is manufacturing. The years they spend in learning and implementing their knowledge shows how much they learn about the manufacturing operations and processes with interest and passion. Next, the group of young and talented worker population of Mexico, together called the Maquiladora, includes a young group with an average of 26 years. They have already demonstrated their capacity to construct high-quality, sophisticated goods. According to the information produced by the OECD (Organization for Economic Cooperation and Development), Mexico has been rated with a 3.5 mark in the technological sophistication level of exported goods. This rating is itself an evidence that proves Mexican manufactured goods maintain a quality which is above the average of OECD exports, even higher than countries Brazil and other similar Asian countries.
Additionally, apart from the younger generation who have done graduation to build their technical careers and have enthusiastically involved themselves in manufacturing tasks, most other manufacturers in Mexico hold some certifications earned from the International Organization for Standardization. As a strict guideline of the IOS, students passing out from this organization with a certification are required to meet the quality standards of the manufactured products set forth.
Myth #3: Only Mexican companies are benefitted from buying goods from Mexican manufacturers
Fact: From an US analysis done on trade, a very basic conclusion is drawn that conclude purchasing services from Mexico is like sending money to someone and never getting it back. In other words, when someone purchases goods from Mexican sourcing manufacturers they actually send the money back to Mexico, thereby contributing to the economic growth of Mexico. While this analysis is intelligible, it is truly incorrect.
According to a recent study, approximately forty percent of the total profit made by Mexican manufacturers comes back to the United States. This is primarily because everything that a manufacturing company in Mexico requires from equipment to raw materials to machinery and services, comes from the United States.
Myth #4: Mexico, as a manufacturing base, is falling far behind China
Fact: While some of the manufacturers, especially US workers, across the globe accuse Mexico for delivering low quality products and have stated the quality falls behind China, here are some of the evidence that clearly reveals the falseness of the statement. Firstly, these are just stories cooked up by manufacturers of the United States and other countries who cannot stand the fact that Mexican manufacturing can also produce high-quality goods. The relative competitiveness of Mexico with China, which serves as a manufacturing base for the US workers, has also received a boost from challenges in China. Recently, the Chinese manufacturing organizations have been seen increasing their labor wages and production cost absolutely. While the production has remained the same, the production cost has increased relatively. Labor unrest has burst out across China, a phenomenon formerly unknown in the country. This has prompted shifts in manufacturing out of China to low-wage Southeast Asian nations and, for more sophisticated products, to Mexico.
So, now you know about the truths behind the false acquisitions. If you have been thinking about building business relationships with Mexico, you can initiate the process without any further delay. The Mexico sourcing agencies are highly reliable when it comes to delivering high-quality products. You can trust them with your manufacturing requirements and they will surely stand out your expectations.