Mexico is the "China of the Americas," Siemens Mesoamerica CEO Louise Goeser says. Goeser, who leads the Mexico business unit of German industrial conglomerate Siemens AG (IW 1000/26), made the statement in May at a Siemens metals summit in Mexico City.
The former head of Ford Motor Co.'s (IW 500/6) Mexico operations believes the country is poised to be a global manufacturing leader. Siemens Mesoamerica has nine manufacturing plants in Mexico and more than 6,000 employees in the country, with its headquarters in Mexico City. The reason Goeser is bullish on Mexico's manufacturing future has much to do with the nation's workforce. "There's actually more engineers that graduate each year in Mexico and are highly qualified than there are from Germany, Brazil or Colombia," Goeser says.
Goeser alluded to Mexico as the Americas new China to highlight Mexico's manufacturing cost advantage. The United States' southern neighbor has free-trade agreements with more than 70% of the world's economy, abundant natural resources and a lower inflation rate than India and China, Goeser says. Its proximity to the United States is another advantage that has made Mexico the most competitive market for building and shipping to the United States, Goeser says.
But Mexico's cost advantage does not mean poor quality, Goeser contends. If anyone should know, it's Goeser. Goeser joined Ford in 1999 as vice president of quality before taking over the company's Mexico operations in 2005. She retired from Ford in 2008 before accepting her current role with Siemens.
As Ford's quality vice president, she led the company's efforts to implement a companywide "consumer-driven" Six Sigma initiative that focused on customer satisfaction as the primary criteria for selecting Six Sigma projects. By 2004, Ford had documented about $2 billion in savings related to the program, reported IW sister publication WardsAuto World.
Consumer-driven Six Sigma begins by identifying a customer need and then applying Six Sigma analytical tools to cut defects, which should result in improved customer satisfaction. Siemens' Mexico business unit focuses on similar quality standards that Goeser says were critical to Ford's success during her tenure there. "One of the main ideas behind lean and Six Sigma is standardization of processes and actually having processes that match the needs of the customer," Goeser says. "I also found Six Sigma was one of the major tools for problem solving and design, but in conjunction with a really lean process is a very powerful way to run a business."
Beyond lean and Six Sigma, the work ethic of Mexico's workforce also plays a major role in achieving high quality standards, Goeser says. "The people in Mexico, in my experience, are more grateful for jobs and dedicated to their jobs than almost anywhere I've ever been," she says. "They really appreciate the job and work very hard. If you give them training, they want to learn, absorb, apply."
As evidence, she points to several Ford Mexico plants earning top J.D. Power & Associates ratings while she was the division's CEO. Unlike other countries facing a talent shortage, finding talent to drive further improvements in the future shouldn't be an issue, says Goeser.
"There's probably an overskilled workforce right now, which means there's plenty of skilled people for not enough jobs," she says.