Challenges U.S. Manufacturers Face & How Shelter Services in Mexico Provide Solutions


Challenges are nothing new to the manufacturing industry. However, U.S. manufacturers have gone through unprecedented setbacks in recent years, causing many to shift focus to manufacturing in Mexico to course-correct and ramp up production.


Between the decline in industrial workers and increased competition for space, and the shift from dependency on China and a trade bloc encouraging more North American trade, there’s a lot the IMMEX program provides.Specific challenges manufacturers face and solutions to them.


Here’s a closer look at what these specific challenges entail and how being part of the IMMEX program and implementing shelter services in Mexico can make all the difference.


Challenge #1: Shortage of U.S. Industrial Workers

The concern with employee recruitment in the U.S. is two-fold. First, an entire generation of highly skilled, experienced industrial workers are entering retirement. Second, the younger generation entering the workforce isn’t interested in replacing them. And even those who are cannot fulfill the number of roles necessary to meet growing demand.


Therefore, U.S. companies are looking to manufacturing in Mexico to fill their employee gap. Mexico invests in education and specialized training programs to prepare people to work in various technical industries. In addition to greater worker availability, labor rates are more cost-effective compared to the U.S.


Recruiting, hiring, and onboarding employees is part of the full suite of shelter services in Mexico. Thanks to a built-in resource network, IVEMSA can find candidates relatively quickly based on the type and number of roles available.


Challenge #2: Rising Competition for Facilities

In addition to the industrial worker shortage, U.S. manufacturers also face skyrocketing leases and rising competition for space. Therefore, manufacturing in Mexico has become a viable option for those wanting to keep their production close to their end market.

With the majority of factories set up near the U.S./Mexico border, it reduces transportation costs and improves delivery times, compared to manufacturing in China. Meanwhile, Mexico has several other industrial hubs set up throughout the country, which are close to transportation routes and suppliers.


When implementing shelter services, site selection is the first step. IVEMSA will create a matrix comparing options based on specific manufacturing needs. Plus, all certificates and permits necessary to operate will be secured, which reduces the setup timeline and allows manufacturers to benefit from VAT savings right away.


Challenge #3: Too Much Dependence on China

Following the detrimental delays during the pandemic, U.S. manufacturers have realized they need to diminish their dependence on China. The disruption in U.S.-China trade relations has only grown over the years. Between retaliatory tariffs, expensive shipping, and long wait times, manufacturing in Mexico has become the leading option.


The North American trade bloc has further prompted U.S. manufacturers to move operations from China to Mexico. Thanks to USMCA provisions, nearshoring is not only more convenient and cost-effective; in some cases, it’s required. Setting up shelter services in Mexico allows U.S. and other foreign manufacturers to make an easier, smoother transition.


Through IVEMSA, U.S. manufacturers have a full administrative team at their disposal, including HR, tax, trade compliance, and legal personnel. There is also less of a learning curve and reduced risk and liability since companies will be operating under the shelter umbrella. And a shelter company saves manufacturers up to 30%-35% on costs versus operating without one.


Learn more about how our shelter services can be an impactful part of your manufacturing strategy. Contact IVEMSA today.

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