For US manufacturers or manufacturers with US target markets, the most significant advantage of doing business in Mexico is increased profit from lower labor cost. Entry level direct employees are paid a fully burdened starting wage of approximately four dollars per hour. In contrast, many US companies incur a fully burdened wage in excess of twenty dollars per hour.
Our simplified model estimates potential labor savings for companies considering a manufacturing operation in Mexico, versus other geographies. Additional indirect savings including duty savings, lower cost rent, utilities and locally sourced materials are not included in this estimation. Our normal exploratory process with a client includes working together to create a more comprehensive Mexico financial operating model. Contact us at 619.661.1261 or sales@tacna.net to discuss your specific circumstance.
lower wage rate compared to
other advanced economies
estimated annual savings with
100 positions in Mexico
