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BBC World Service

Some firms targeting U.S. choose Mexico over China

Alastair Leithead May 27, 2013
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BBC World Service

Some firms targeting U.S. choose Mexico over China

Alastair Leithead May 27, 2013
HTML EMBED:
COPY

A miniature drone with six little rotors hovers over the factory floor at 3D Robotics’ Tijuana plant. The high-tech flying robot company was co-founded by ex-Wired CEO turned Silicon Valley entrepreneur Chris Anderson and a Mexican computer whiz-kid he met online. They’re expanding, and like other U.S.-facing companies, are turning to Mexico’s well-educated young workforce rather than China’s high-tech hub.

“Twenty years ago, Mexico was about cheap labor,” says Anderson. “Today it’s about highly skilled labor that highly competitive with Shenzhen. And then when you net in all the external costs — the time and shipping costs — they become very similar. But from an innovation perspective working with China was slowing us down.”

It’s not just start-ups. Big manufacturers are moving more production to Mexico. DJO Global makes medical supplies like knee braces and neck supports.

“We are migrating all the production we had in China. Now we’re bringing it here,” says Armando Vega Garduno, director of manufacturing at the Tijuana plant. “Now the wages in China are more than they were before, that’s one thing, then China is six weeks away from the most important market, which is the U.S.”

But what about the drug wars? The police chief still needs 10 bodyguards, but Mayor Carlos Bustamante says Tijuana’s now safer than it was two years ago. “The perception has lingered, but we are down in murders 70 percent or more.”

Mexico exports as many manufactured goods as the whole of Latin America combined — and it’s growing twice as fast as Brazil.

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