User 175990

Morgan Stanley: What's Behind Mexico's Extraordinary Resilience?

One important factor in allowing Mexico to maintain a robust industrial sector is the inability of American manufacturers to raise prices or substantially increase productivity. This leaves the option of taking advantage of Mexico's low labor costs. I work for a Japanese company that employs 30 engineers at an average hourly cost of about $4.50usd, line operators for $50us/week etc. This company is in the process of downsizing it's plant in Ohio, while upsizing in Mexico. This trend should last and benefit Mexico if the recession doesn't get too severe and stagflation continues for an extended period.