MEXICAN AUTO PARTS INDUSTRY STRUGGLING TO COMPETE GLOBALLY

Mexico is learning the same lesson that the United States did decades ago - jobs will shift to the lowest cost country that can produce the product at an acceptable quality. In the case of the United States, some of the early production jobs that left the country went to Mexico where wages were a fraction of those paid in the U.S. Today, those Mexican jobs are leaving for even lower-cost countries like China and Honduras. Mexico can seem attractive to companies with wages of $1.50 per hour, but cannot compete with Honduran wages that are less than $1.00 (74 cents for Alcoa workers in that country).

From The Chicago Tribune:

Not so long ago, Mexico floated along as a low-cost producer to the auto parts world. But now its niche is threatened by global rivals who can trump it with lower salaries or superior quality and productivity. As a result, Mexican auto parts firms keep pressing to trim costs, and Mexican workers find themselves working longer, harder and sometimes for less.

Consider Alcoa Inc.'s move into Honduras. Several years ago the Pittsburgh-based firm opened some auto parts facilities with a base wage of 74 cents an hour in that country, according to the National Labor Committee, a small New York-based group that tracks workers' conditions globally. That compares with Alcoa's auto parts operations in Ciudad Acuna, Mexico, where workers' average weekly salaries and other benefits for a 48-hour week come to $76.22, according to company spokesman Kevin Lowery.