Thursday, December 12, 2002
Solectron Corp., a Milpitas, Calif. EMS provider, will shut down its manufacturing plant in Monterrey, Mexico, by February and will shift production to its Guadalajara facility, said Alejandro Gomez, the company's senior vice president and president of the Latin American region.
The contractor plans to convert the operation into a multi-service facility that houses divisions of Solectron Global Services and Stream International, the company's call center subsidiary.
EMS providers with operations in Mexico have been changing those sites into medium to low volume, medium product mix facilities from high volume plants. In recent years, regions such as Mexico and Eastern Europe have lost high-volume business to Asia, which has emerged as a low-cost manufacturing center.
"A lot of commodity products have migrated to the Chinese market," Gomez said. "We're replacing that with more complex products and more systems build products."
Gomez classified the shift of commodity products such as cell phones to lower-cost China as a natural migration in the manufacturing process.
"Obviously the commodity products will always look for a lower cost proposition, which China does have over Mexico as far as labor is concerned," Gomez said. "More complex products will be sent to Mexico because it's close to the U.S. market and of course lower cost than U.S. manufacturing."
Solectron currently has 6,300 employees in Mexico. The company would not disclose how many Monterrey workers would be affected by the restructuring plan.
By: DocMemory
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