Cross Border Manufacturing

“ I am sorry sir, there are no upgrades. All aisle seats and window seats from LA to Shanghai are filled. I am sure the middle seat will be ok.”

“Sure I thought, 15 hours wedged in the middle seat will be fine, if you are a sardine.”   

Every time I started off on the China trip, I promised myself I would look into cross border manufacturing. I mean, the Cali-Baja region has a wide spread manufacturing base. And the products are not striped donkeys or piñatas… far from it. Forty thousand people are employed in Medical Device manufacturing in the region. Not to mention Toyota, Samsung (no batteries!), etc. And… big AND…  the region is 15 time zones closer…the aisle seat is right behind my steering wheel. It takes less than 45 minutes from San Diego to Tecate for instance. Over and back, on any mission, in a day.

Finally I decided its time to get informed. We looked around San Diego to see if anyone involved in the Sport or Active lifestyle industry might be willing to share some experiences with us.  When you think about San Diego lifestyles I think about the Beach, maybe beer, and music…that's how we came up with Taylor Guitars.  A call to Taylor was all it took.  Bryan Bear and Victor Villaneuva came to our Board meeting and really gave us all a primer on manufacturing in Cali-Baja. It was an eye opener, to say the least. 

At the end of the presentation they invited us to come to their new Tecate facility to see the execution of a really good plan to expand manufacturing.  Approximately 20 of us took up the offer and made a field trip to the new facility. It was far more than a tour. Taylor’s VP of Product Development, Ed Granero, shared the factory and showed us how it can work.  There’s too much to relate here, but let me say, this was far more than a “tour.” I am not too sure how to describe it…but we saw a state of the art, 110,000 sq ft factory in operation, met many (happy) employees, gained a lot of business insights, made connections with the Business Development staff from Cali-Baja, had a cordial “only in Mexico” lunch and came home with a head crammed full of ideas for our industry.

By the way, 20 people traveled to and from Taylor ‘s factory in less time than 1 person can get to China in that middle seat…just sayin’.

FYI:
•    Security. My guess is that this is your first reservation. No one can deny some issues in the region. If you are a drug smuggler you may encounter those people, but probably you are not.  Renne, Nick and I are frequent Mexico travellers and never have encountered any problems. Pacific Beach? Much scarier!
•    Border wait: The Tecate foot crossing could not be easier. No wait in, no wait out. Good parking in on the US side. Easy public transit on the Mexico side. 10 minutes to Taylor guitars for instance.
•    Visas: both governments have fast pass programs and visa arrangements to allow easy crossing for citizens of both countries. The Taylor employees are cross trained in both the El Cajon facility and Tecate. They cross easily, daily.
•    Bureaucracy: Not sure we Nortes should be lecturing anyone about this, but yes there is a process. The rules are clear, but complex enough to require careful investigation. See the Contacts list below for expert guidance.
•    Facilities: State of the art Industrial space is readily available.  Space costs are more than Competitive. Facility build out can suit your need.
•    Labor: Adjust your thinking. Did you know there is  2.5% unemployment in Cali-Baja? That Mexico majority population is under 30 years old? Or that they have a fast growing, well educated middle class looking for careers? The blended cost of labor per hour, all industries is competitive with China, running less than $4.00/hour. In our sector, the price will be higher depending on the skills needed for construction.
•    Economic Incentives available? Absolutely!

Some more photos of the day can be found here

Well there is much more. But if you are curious about possibilities of manufacturing in Baja, by all means call us. We can help. But here are the contacts for the people who are really expert in the region:

Barbara Ruelas: Director of Investment and Project Management (Northern Baja). bpruelas@baja.gob.mx. 52 686 558 1137

Carlos Uribe: Business Development. curibe@iamsa.com.mx. 52 664 211 0707

Adrian Hernandez: Business Development Executive, Tecate EDC. Adrian.hernandez@tecateedc.org. 619 503 7282

Ismael Soto Dominquez, Investment Promoter, Secretariat of Economic Development. isotod@baja.gob.mx. 52 665 103 7530

Bob
SDSI