As an electronic supplier to the auto industry, Pacific Insight Electronics Corp. CEO Stuart Ross knew that Mexico was a place his company needed to be. Locating there seven years ago, due to the increasing level of investment by auto OEMs in the region, he chose Central Mexico, specifically Fresnillo, Zacatecas as the site for his plant.
His company, which has won a number of awards including Ford Motor Co.’s Q1 Award and GM’s QSTP Supplier of the Year, produces electronic products such as data bus instruments, LED lighting products, wire harness and cable solutions and electronic control modular systems to the automotive, commercial vehicle, off-road and specialty markets.
Q: What are the advantages of locating in Central Mexico?
From a labor cost perspective Central Mexico is more affordable than border regions. And there is less labor competition here than in the border towns. The cost of living adjustments are nominal as well.
However the main advantage is a stable workforce. And this workforce has a very strong work ethic. Productivity on an hourly basis is very high.
From a logistics standpoint it is less than one day by truck to the U.S., which it a is huge advantage. And of course there is the tax advantage of no tarffis.
Other factors that create a favorable location include the fact that this region is very similar culturally to the U.S. and so there is an ease of doing business here.
From an historic aspect, as this area was settled very early, there is a rich cultural heritage. Coupling that aspect with the fact that the city is very cosmopolitan creates a highly desirable location in which to live.
Q: How strong is the talent pipeline?
We feel that our company had an advantage as we worked with a shelter organization, Entrada Group, which gave us a soft landing. We were able to rent the facility and the employees are part of the package. Entrada provides the recruiting, staffing, labor relations, and benefit administration.
We are able to scale up more quickly with this arrangement. If we receive a larger contract we simply ask for more employees. They have a large pool to draw on and I know the quality of the workforce. The vast majority of the employees have experience working for either auto or truck manufacturers or Tier 1 suppliers.
While the workforce has experience we supplement that by doing our own internal training in the areas of quality and lean.
Q: What is the end market of the products you produce in this plant?
We manufacture a wide range of products from simple harnesses to contenting printed circuit boards. Our customers are in the heavy truck and automotive space. Ford is one of our largest customers in Mexico.
Q: Do you have plans to expand this plant or build another?
In January 2012 we moved into a 96,000 square foot facility. We do have the flexibility to add a further 40,000 square feet to this existing facility, however, with lean initiatives we still have ample room to accommodate our near term future growth.
For more information about this region read "Why Are Automakers Pushing Further in Central Mexico?"
Check out IW's complete "Take Five" series, a regular section featuring interviews with top executives.