Expansion Management

Will Mexican Manufacturing Be Less Competitive?

Oct. 9, 2013

Proposed taxes could cause companies to think twice before setting up shop in Mexico.

As Martin Kennedy managing director of the Americas for Trico, which manufactures nearly 40 million windshield wipers per year for 24 global automakers ,told me during an interview for “How a Texas Border Town Boosts U.S. Manufacturing”: "We set up shop here 26 years ago. In compliance with laws related to maquiladoras, we manufacture in the U.S. and assemble in Mexico. That has been a winning strategy all of these years."

Could this strategy be threatened due to a proposed tax reform bill? Stephen Downer, correspondent for Plastic News wrote the following article on the subject.

QUERÉTARO, MEXICO — Critics fear a controversial tax reform bill being debated in Mexico's Congress will make Mexican export manufacturing and assembly less competitive and discourage future foreign direct investment, if passed.

"It could spell the end of the maquiladora culture," in which dozens of plastics processors participate, Carlos Palencia, general manager of the National Council of Maquiladora & Export Manufacturing Industry, of Mexico City, told Plastics News.

The Mexican government established the low-wage maquiladora program in 1965, reportedly to solve the problem of rising unemployment along the border with the United States.

To read the full article “Proposal would boost taxes on maquiladora plants” click here.

About the Author

Adrienne Selko | Senior Editor

Focus: Workforce, Talent

Bio: Adrienne Selko has written about many topics over the 17 years she has been with the publication and currently focuses on workforce development strategies.She is also a senior editor at Material Handling & Logistics and EHS Today.

Editorial mission statement: Manufacturing is the enviable position of creating products, processes and policies that solve the world’s problems. When the industry stepped up to manufacture what was necessary to combat the pandemic, it revealed its true nature. My goal is to showcase the sector’s ability to address a broad range of workforce issues including technology, training, diversity & inclusion, with a goal of enticing future generations to join this amazing sector.

Why I find manufacturing interesting: On my first day working for a company that made medical equipment such as MRIs, I toured the plant floor. On every wall was a photo of a person, mostly children. I asked my supervisor why this was the case and he said that the work we do at this company has saved these people’s lives. “We never forget how important our work is and everyone’s contribution to that.” From that moment on I was hooked on manufacturing.

I have talked with many people in this field who have transformed their own career development to assist others. For example, companies are hiring those with disabilities, those previously incarcerated and other talent pools that have been underutilized. I have talked with leaders who have brought out the best in their workforce, as well as employees doing their best work while doing good for the world.