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DETROIT - Mexico has become North America more attractive place to build new auto plants, a change that has siphoned from the US and Canada jobs but helped keep the prices of cars and trucks failing for consumers.
Over the past two years, eight car makers have opened or announced new plants or expansion in Mexico last week, Toyota TM announced a new plant in Guanajuato to build the popular Corolla, the work now done in Canada, while Ford F unveiled plans for the engine of Mexico and transmission plants.
The low cost of labor and less rates are the swing factor A worker in Mexico costs automakers an average 8 hour, including wages and benefits that are 58 in the United States for GM and General Motors 38 at the Volkswagen VLKAY plant in Tennessee, the lowest cost per hour in the US according to the Center for automotive Research, a reflection of industry in Ann Arbor, Michigan German car workers cost about 52 an hour.
Mexico also prevails in the US on free trade It has signed agreements with 45 countries, which means low prices for export worldwide as well as low labor costs of work, convinced Audi to build an SUV plant in Puebla the German automaker will save 6000 per vehicle tariffs when it comes Q5 in Europe, compared to the construction of the same vehicle in the States said Sean McAlinden STATES, chief economist at CAR.
Audi also sells the Q5 in the U S where duties on cars built in Mexico were abandoned under the North American Free Trade Agreement.
The cost savings should also allow car makers to add expensive fuel saving features to meet more stringent requirements of US government fuel economy without increasing the price of cars Two thirds of the cars manufactured in Mexico shipped to the U S.
While the boom in the automotive industry and the Mexican Workers welcomed the higher average wages, workers speak louder on working conditions.
Mexican auto production has more than doubled over the past 10 years, the consulting firm IHS Automotive expects to rise another 50 percent to just under 5 million by 2022 US production is expected to increase only 3 percent, 12 2 million vehicles in the next 7 years.
Car manufacturers now have 18 plants in Mexico, many built during the last 10 years, four years, five more will be built, move the country the seventh largest car producer in the world in the fifth.
The change means jobs that could have been in the United States or Canada went south the number of jobs to automobiles in Mexico has increased nearly 40 percent since 2008, from 490,000 675,000 last year, according to government statistics and industry during the same period, the US auto manufacturing employment increased by 15 percent to nearly 903,000.
The new Toyota plant will create 2,000 new jobs, while Ford May 2 billion investment will add 3,800 jobs.
For Mexican workers, the plants appear initially as wonderful places because you can earn a salary in exchange for a good job, said Huberto Juarez, professor at the Center for the study of economic and social development in autonomous University of Puebla.
Some Japanese car manufacturer plant workers begin 90 to 150 pesos a day, or 6 to 10, Juarez says Others, such as Volkswagen, have paid more than twice said Juarez Mexico from automaking wages are now lower than in China, but better than the minimum wage of Mexico from 4 to 50 per day.
The pressure is building to improve working conditions in the Mexican plants Last week, three former workers of the factory Mazda complained publicly of injury and be worked longer than legally allowed A union official said demonstrations supporting.
Although Juarez said the workers will likely stay put The biggest threat will always be unemployed than why they stay because you leave there and where will you go.
First, car manufacturers with Mexican plants face quality problems due to unskilled labor But companies with long-standing plants in Mexico, such as Ford and Nissan NSANY have solved these problems according McAlinden.
Despite the cost of transportation, it is still cheaper to build cars for the U S Mexico, McAlinden said.
AUS -Built Chevrolet Sonic subcompact costs about 700 more to a Mexican Fiesta Ford builds comparable, McAlinden says that the same interpretation with an employment contract with Sonic plant in Michigan that allows 40 percent of workers to pay lower wages than longtime union employees.
United Auto Workers complain that the Mexican construction companies benefit from wages as American manufacturing workers slaves could have well-paying jobs that meet basic human dignity, said UAW President Dennis Williams.
However, investments in the automotive industry in Mexico aren t limited 46 billion automakers shed in improving U S U S 2010-2014 employment factories making car rose 37 percent during this period.
Ford said 80 percent of its annual investment in North America U S where spending will continue at about the same significant level in the future.
Car buyers are expected to benefit from lower costs in Mexico US government fuel economy requirements call for increasing the mileage of the new car fleet average of 54 miles per gallon 5 in 2025 The necessary technologies, including turbocharged engines and multi-speed transmissions, are expensive and with the essence just over 2 per gallon, so buyers do not want to pay extra, McAlinden said moving engine and transmission production in Mexico's logic It's not room for the cost of labor.
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Why your next car could be made in Mexico CBS News, Indeed, Mexico, employment increased percent.