It used to be just labor cost, but apparently Mexico has another secret weapon in trying to expand its role as the world's manufacturing partner: It can churn out engineering and manufacturing talent for the large multinational manufacturers looking to locate in North America.
Don't believe it? Look what's happening elsewhere in the world.
James Dyson, the inventor of a widely lauded upright vacuum, demanded in early January that government officials in the U.K. do something to attract the best and brightest minds to go into engineering and the sciences. His fear is that with so much focus on Internet-related applications and video game design, the U.K. is losing out on its ability to create innovative technologies that can be exported and sold in other countries.
In the U.S., manufacturing companies are lamenting the fact that they can't find the right skilled workers to fill approximately 600,000 open positions. A 2011 survey from Deloitte and The Manufacturing Institute revealed that 67 percent of manufacturers had a moderate to severe shortage of available, qualified workers.
Even in a country like Germany, which has a technical educational system that is the envy of the world, manufacturers are clamoring for younger workers to replace its aging workforce. The problem has advanced to the point where German companies are reaching out to workers from other nations to take these jobs.
Conversely, Mexico appears to be a leader in developing a strong base of engineering and manufacturing talent. Major multinational manufacturers such as Bombardier and Foxconn have set up shop in Mexico because they know that they have workers who are ready to be immediate contributors upon hire.
Why has Mexico been successful in creating a vibrant manufacturing workforce? It's because the country's educational institutions aren't afraid to reach out to the private sector and learn how they might adapt their programs to prepare students better for the real world of manufacturing. It sounds like a simple proposition, but such relationships are not easily executed, as some universities may prove to be too inflexible, or some companies may want to unload all training responsibility on the educational institutions. In Mexico, particularly in the manufacturing clusters in the northern part of the country, the two parties appear to have created a comfortable working relationship.
It's something that the U.S. should notice, because Mexico's manufacturing expansion isn't going to slow down for anyone. Just in November 2012, Mexican car and truck production eclipsed 2.77 million vehicles, surpassing 2011's full-year record of 2.65 million. The automotive industry as well as other sectors recognize that and are likely to continue to invest in Mexcio—perhaps at the expense of U.S. jobs.