Manufacturing in Mexico Checklist
Thinking about manufacturing in Mexico? Use this checklist as a guide to help make sure that you have all your bases covered. Whatever your reason for expanding into Mexico, this checklist will help you examine both the basic and difficult questions that you should be considering.
1. Labor Considerations for Manufacturing in Mexico:
- Productivity & Efficiencies.
- Employer costs of direct, indirect, and salaried labor.
- Legal work week and overtime pay in Mexico (48,45,42 / double and triple overtime).
- Local employee benefits, bonuses, and incentives.
- Available skill sets in the local work force, including managerial and leadership.
- Skills development and education. Lean, Six Sigma, 5s, and other efficiency/improvement methodologies.
- Quality systems knowledge in the workforce (QS, AS, TS, ISO).
- Labor unions; contracts, negotiations, costs.
- Loyalty of labor; employee turnover & absenteeism.
- Temporary Employment vs. Permanent Employment.
- Employee Severance.
- Employee Transportation (Direct / Hourly Labor).
- Mexico’s newly enacted labor reform.
- Child care and medical care.
2. Real Estate & Utilities Considerations for Manufacturing in Mexico:
- Industrial sites and available buildings that meet your requirements.
- Lease rates, terms, triple net charges.
- Build-to-suit options and land availability, location, cost, construction lead time, and property taxes.
- Electrical power availability, capacity cost, consumption cost, demand cost, power factor costs, reliability, backup, and power source contingency plan.
- Gas, natural, propane, production gases (argon, nitrogen, etc.) availability and cost.
- Water, sewer, and waste removal.
- Connectivity, voice and data.
3. Supply-Chain & Logistics Considerations for Manufacturing in Mexico:
- Local suppliers; capacity, capability, competency, and competitiveness.
- Freight options and providers, and costs; ground, air, ocean, rail
- Customs brokerage
- Transit insurance
4. Legal Framework, Regulatory Compliance, and Government Considerations for Manufacturing in Mexico
- Operating models: standalone/greenfielding, shelter, subcontract, joint venture, M&A.
- Fiscal & Taxes; safe harbor, transfer pricing, and advance pricing agreements.
- Customs Compliance & Duties (U.S. and Mexico); IMMEX and PROSEC; Trade Agreements (EU and other countries); NAFTA Eligibility.
- Environmental, Health, and Safety Laws.
- Labor Law and Disputes.
- Intellectual Property.
- Municipal, State, and Federal bureaucracy, incentives, support.
5. Expats and Foreign Support Considerations for Manufacturing in Mexico:
- Work Visa’s
- Residential communities
- Living conditions and amenities
6. Safety & Security Considerations for Manufacturing in Mexico
If you would like to take your due diligence one step forward, download our Questions to Ask EBook to help you make an informed and data-driven decision.