In a technology-driven industry, low labor costs will not be enough to keep companies in Mexico. Experts such as Guillermo Rosales, Director General of the Mexican Automotive Distributor Association (AMDA), and Eduardo Solís, Executive President of the Mexican Automotive Industry Association (AMIA), fear that without a focus on advanced manufacturing technology and innovation, the country will lose its attractiveness as an investment destination.
The threat is latent but there are already companies choosing other investment destinations in favor of a more technology friendly environment. Goss Global, a Mexican company originally based in Ramos Arizpe, Coahuila, has now chosen London, Ontario, as the new home for its headquarters. The company led by Arturo Zarate will invest US$5 million in a manufacturing and R&D center that will focus on composite thermosets and innovation in lightweight components for the automotive industry. According to information provided by Zarate to The London Free Press, the Canadian government offered lower corporate taxes than the US and better government support and research, beating whatever advantages cheap labor could bring to the company. “I need good workers. We think it is the time to manufacture in Canada,” said Zarate.
Another factor that led Zarate to choose London as Goss Global’s new headquarters was its privileged location between Toronto and Detroit. “We are targeting to serve Tier 1 suppliers such as Magna and commercial vehicle OEMs such as Ford and Navistar,” Zarate said to Automotive News Canada. Located at the former Churchill Logistics building, a renovated 2,787 m2 warehouse in southwestern Ontario, Goss Global will be able to target both its Canadian and US clients.
The plant and R&D center will open in 2018 with 20 employees and Zarate expects to ramp that number up to 50 by 2019. “We have the space, we need to bring equipment to Canada, we will be transferring activities,” said Zarate.
Information for this article was sourced from Auomotive News and The London Free Press.