By Ana Gomez Salcido
For companies located in San Diego, Mexico might seem like the new China. However, CEO and President of Crossborder Group, Kenn Morris, says otherwise.
The founder of Crossborder Group explained why Mexico is not the new China, in front of over 100 representatives from different San Diego companies in a forum organized by MIT Enterprise Forum, on April 13.
One example of why Mexico is not the new China is costs, he explained, is because labor costs in China have risen five-fold in the last decade, while these have not multiplied in Mexico.
Morris said that to review a product, companies have to send personnel overseas and spend days, even weeks in China to have a final product to manufacture, while it only takes 20 minutes to get to the United States-Mexico border.
“You can have your product pass through customs in about two to four hours. You can have your product on the market faster,” he said.
The expert on U.S.-Mexico border strategies mentioned that there are opportunities for companies in the San Diego-Tijuana megaregion.
While manufacturing employment in the San Diego/Imperial Valley area is just short of 100,000 people, he said, there are nearly 300,000 people employed by manufactures in Baja California.
The manufacturing workforce in Baja California has risen 29 percent since mid-2009. In Tijuana alone, there is a population of around 200,000 manufacturing industry employees.
Baja California is a leader in the medical, electronic, aerospace and craft beer, industries he said.
Every time there are more engineers in the Cali-Baja megaregion. There were nearly 5,000 Cali-Baja engineering graduates in 2013-2014, he said, and 2,700 were from San Diego, the rest from Baja California.
“There is a lot of talent, the number of engineers is growing and there is an expectation of 142,000 students for university enrollment by 2021,” said the expert on cross-border market research.
One of the companies that have showed success in the SD-Baja region in the last years, is Taylor Guitars.
Bryan Bear, director of finance for Taylor Guitars, shared the company’s success story of having a manufacture facility in Baja California, at the forum.
Bear said that Bob Taylor, co-founder of Taylor Guitars, used to travel to Baja California, and he knew a lot of people that helped him to install a facility for his guitars in Mexico.
“[Bob Taylor] wanted to reduce guitar case prices and started manufacturing them in Tecate,” said Bear.
Taylor Guitars started crafting guitar cases in in their manufacturing company in Tecate. According to Bear, Taylor now produces over 100,000 guitars from scratch.
The forum was to change the perception that exists of Mexico, said San Diego Regional Chamber of Commerce’s VP of International Affairs, Paola Avila, who was part of the event.
“There are a lot of people that would be surprised to learn about the benefits of United States companies operating facilities in Mexico,” she added.