Mexico’s gain at China’s rising cost expense ?

An article in the Wall Street Journal (Feb 6, 2012) describes data that trains and trucks carried 9 % more freight last year from Mexico to the US, while container traffic from Asia dropped 0.2 %. As we have heard before, labor costs will continue to rise in China as the working age population shrinks, raw material costs and energy costs in China are rising to nonsubsidized levels and transport costs are increasing, and the yuan has appreciated 30 % in the past few years, thus providing an opportunity to bring manufacturing closer to the US.  Will concerns about security in Mexico dampen the current enthusiasm to move production to Mexico ?  What changes in the maquiladora region will reassure US consumers that environmental and workplace concerns are being addressed in Mexico ? Does Mexico have a strong enough engineering base to support a significant growth in manufacturing or will that be a constraint ?

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About aviyer2010

Professor
This entry was posted in Global Contexts, Operations Management, Supply Chain Issues, Sustainability and tagged , , , , , , , , . Bookmark the permalink.

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