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.
About the Author: Dan Davis
Dear Dan: It is curious that what you see, from your perspective and situation, is seen as a very different picture when seen from inside Mexico… We simply don't see our country "Churning out Engineering and Manufacturing Talent", it is because here, life is tough and getting a good job is far from easy.
Here, engineering jobs are poorly paid, engineering companies have acquired the nasty habit of hiring engineers just for the project at hand, and quickly fire them as soon as the Project Managers or company CEO's feel those are no longer necessary, it is called the Coke bottle syndrome: when you are in the middle of the desert (in the heat of the project), a nice cool coke bottle (a capable engineer) is like heaven, as soon as it gets empty (project nears end), you immediately feel the need to throw it away!(you just fire the individual!)…
This shortsighted policy could cut some costs down, but produces many undesirable effects, as the engineering community is becoming more interested in getting paid for the minimum effort, instead of achieving a longer, much more fruitful relationship, where the engineers keep getting better and delivering value to the company projects, and project teams lose expertise and quality. We've seen examples of abuse from both sides, it is almost like a "prostitution" of the professsion: 'you use me, and I cheat on you too'. Experienced engineers are simply not hired, or even wanted by engineering companies willing to pay the lowest salaries, and fearing that older ones will want to retire soon, taking some advantage from the Mexican labor laws (that are quickly disappearing). If this keeps going, soon the same symptom of no one pursuing engineering or technical careers will soon reach Mexico too, as lazy and/or too ambitious people will prefer to study less demanding careers to get more profitable jobs, eventually reaching the same status as Europe or the USA. To give you an example: yesterday a good friend of mine, Mechanical-Electical engineer with 30+ years of experience in metal industry, was fired from an engineering firm in Monterrey, after a few months of helping them with petrochemical and refining projects. It happens the company was sold and the new owners don't like older people and/or want to "get the company slimmer" or any other MBA or CEO talk (BS, to name it properly!). Engineering workforce is nowadays considered a disposable material, like fastfood ordered at the moment. It is no surprise for me to see a lot of defective designs from compañies previously known for their (former) products (just take a quick look at the blog called "Made-by-Monkeys", where you will be astonished with the rich collection of bad design mistake examples). Apart from engineers, qualified technicians are becoming scarce, as Mexico's industry [outside of the auto industry and a couple others], has been almost completely destroyed by ignorant governants educated in Harvard. The same "everythingismadeinchina" syndrome that has almost killed american industry. So, to sum it up, your image of Mexico having a secret weapon by churning out Engineering professionals, appears romantic but imaginary when seen from our own country. What we see, is a country devastated by politicians and greedy industrials, and a large workforce fighting each other for the scarce jobs, most of them badly underpaid (like $12 -15 USD/hour for an experienced senior engineer).
Will appreciate your comments on my comment. Amclaussen.
Hello Mr. Claussen.
Thanks for your comments.
I don't disagree with your statements, but I'm confident in saying that Mexico has produced a lot more engineering and manufacturing talent over the past several years. It may contribute to the situations you describe above.
In the meantime, while some industries suffer, others such as vehicle manufacturing grow in Mexico. Many of those manufacturers claim that the country's educated labor pool helped them to make the decision to set up manufacturing in Mexico.
In fact, many of your observations about the Mexican market for engineering and manufacturing talent are similar to what is said in the U.S. "People don't want to pay for experience" and "Companies are only looking for entry-level workers" are common refrains that I hear. In a world economy where everyone is looking to increase the bottom line, I don't doubt these stories. My only hope is that there are some enlightened manufacturing companies out there that know the value of quality engineering talent.
Thanks for reading the blog. Good luck.
Dan Davis
The FABRICATOR