Japanese shipowners prefer to triple wages in Mexico than move to the United States
July 01, 2020
Taken from 'Industrial Cluster':
We found an interesting article to share with our readers, regarding the entry into force of the new free trade agreement between the United States, Mexico and Canada (T-Mec), which mentions that, although it hypothetically puts production on an even footing By forcing automakers to pay their employees $ 16 an hour within the treaty zone, it has not reduced the Japanese industry's preference for keeping its investments in Mexico.
The article mentions that, despite the increase in wages, and contrary to President Trump's expectations, Japanese manufacturers are betting on paying wages and / or tariffs. This is not only due to the cheap labor in Mexico, but also in relation to the low costs derived from having production in Mexico as well as the proven efficiency in Mexican production: "For example, Nissan has its most efficient plant outside from Japan in Mexico, in the duo of Nissan A1 and A2 in Aguascalientes. ", 'Cluster Industrial' comments.
On the other hand, companies are implementing technological solutions in automation to reduce costs: "[Piolax], based in Nuevo León, is [...] installing robots to increase their degree of automation and mitigate the increase in labor costs. .. ". Similarly, companies are reorganizing their supply chains, especially for the Pick-Up's line, with the intention of avoiding tariffs of up to 25%.
However, it is not all good news, given the recent epidemic of COVID, which has reduced demand due to the economic crisis, has led to cuts in personnel within the industry. But the shipping companies recognize that Mexico, despite everything, continues to provide profitable opportunities, both for its potential internal market and for its logistics position halfway between Asia and Europe.