NAFTA: What It Means for International Success

The North American Free Trade Agreement created many manufacturing opportunities in Mexico with supply chains connected internationally, all working at peak efficiency.

Companies worldwide opened plants in Mexico because of the country’s low production costs, government incentives, and free-trade agreements made with 47 other countries that allow for tariff-free shipment.

As most of these companies are gaining stride in terms of revenue, many are fighting to give back what the people of Mexico have worked so hard to put in. One such company is Exo-s, a plastics-maker from Quebec that will be opening a new warehouse, tripling its Mexican workforce to 300.

A Growing Mexican Economy & Improved Opportunities for Mexican Workers

One hundred and twenty Canadian-owned auto-parts companies are operated with 43,000 employees in Mexico. These Canadian companies like Exo-s have created plastic-manufacturing companies that are used to make items such as engine covers and cooler tanks which helps to cut costs for Tier I manufacturers.

Companies like Exo-s are working to create a better quality of life for their employees by upping average worker wages between $6 and $7 an hour. Also, it isn’t unusual for some employees to reap the benefits these companies provide like subsidizing half of the meals they provide to workers, offering free transport, and providing a place for a hot shower, amenities that many households in Mexico lack.

It is no secret that these companies are a boon to struggling Mexican families, but, ironically, it all may not have been possible if the Great Recession hadn’t occurred. The precursor to Exo-s relied upon General Motors for three-quarters of its revenues, and when GM collapsed in 2009, it threatened to pull down its suppliers too.

In order to survive the recession, Exo-s had to spread its operation to a place that could accommodate its weakening economic state. Not only did they reach Mexico’s golden shores of opportunity, they also began to specialize outside of their core business of under-the-hood plastics. There they would team up with other car manufacturing giants like Cadillac and Fiat Chrysler to deliver top quality plastic products.

Hope for Improved Wages

While other companies have begun to follow suit in terms of paying their workers more, many Mexican workers want NAFTA to be adjusted so that they can continue to increase their earning potential. As wages are going up because of a labor shortage, many are turning to a more encompassing solution for all of Mexico’s citizens.

And the Canadian government wants to help.

In a new agreement, the Canadian government is pushing for higher standards for labor and are currently consulting with union leader Jerry Dias. Dias has been very vocal on raising pay for Mexicans, and he strongly believes that workers across Mexico would benefit if more independent unions existed, freer collective bargaining was available, and pay hikes were issued.

Dias stated that Mexican workers deserve to be able to purchase the products that they make.

That’s why we here at El Grande do what we do. Not only do we want to be your number one international business solution, offering our comprehensive support to meet your manufacturing needs, we also want to ensure your employees are well taken care of so they can make the best products for you.