Mexico is a hub for the large North American market, as well as emerging Latin American ones. The government is encouraging investment and manufacturing in Mexico by improving infrastructure, education, communications and public security.

While Mexico is no longer a ‘cheap labour’ location, Mexican workers are better trained, and produce higher quality and more value-added goods and services, than many other low-cost economies.

Mexican manufacturers realise they can no longer compete on the basis of low-cost labour. To remain competitive, Mexico is focusing on more skilled jobs through higher value-added activities and more technologically complex manufacturing.

Mexico is also reducing import duties for several products and components that contribute mainly to the national production chain. By 2013 over 6,000 HS codes will have no import duties and none will have a duty of over 24 percent.

Fisher & Paykel Appliances has a manufacturing operation in the border town of Reynosa, Tamaulipas, Mexico. Phil Hamilton, Mexico Plant Manager, says the workforce is “well-presented, courteous, family and company oriented, highly receptive to training and willing to work”.

Challenges, he says include:

• communication – bi-lingual staff are essential for management, supervisors and administration staff interacting with organisations outside of Mexico.
  
• security –we operate in a lower socio-economic region where the equipment and materials personnel use is often worth much more than they earn in a year and the temptation is there for theft.
  
• personal safety – the border area certainly has its safety concerns and it is prudent to put in place policies for onsite safety for all personnel.
  
• facilities management – finding reliable local outside contractors and suppliers is a challenge. Delivery dates not being met can easily result in expensive, imported skilled labour sitting idle during equipment installation delays.
  
• human resources – union relationships are just as important as they are in New Zealand and in general are less hostile. Occupational health and safety reporting requirements are onerous.
  
• recruitment – skilled labour (production engineering, maintenance technicians etc) are difficult to recruit. Potential employees are only those in the immediate area around the factory as the cost of transport is prohibitive for staff living more than 30 minutes away.

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