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Electronics Production | December 20, 2010

CBA: 'Guadalajara still rocks!'

Guadalajara is still a unique spot in the electronics manufacturing industry, because of the desire by the local industry to see the industry succeed as a whole. This is the assessment of Eric Miscoll, from analyst firm Charlie Barnhart & Associates.
Here are some of the facts about this important region based on data presented during the conference and discussions I had with many industry people there:

- Employment in the electronics industry is at its highest level ever.

- Through August, electronic exports for the year were at 62% of the 2008 level and 75% of the 2009 level.

- Other electronic companies are looking to transfer their operations from the more volatile border regions to Guadalajara.

- The local supply base is good for sheet metal, plastics, painting, and cable and harnesses.

- While there are no longer any IC fabs in Mexico, the electronics industry in Guadalajara has made arrangement for two direct flights per week from China to bring in electronic components, which normally clear customs within one day. The flights then return to China loaded with agricultural products.

- Government incentives and grants are still available for companies wanting to establish operations in Jalisco.

Guadalajara is still a unique spot in the electronics manufacturing industry because of the desire by the local industry to see the industry succeed as a whole. This results in greater collaboration among the various companies for the common good of their industry, state, and ultimately their country.

"The industry data that we gather at Charlie Barnhart & Associates LLC and apply in analyses using our proprietary methodologies is supportive of Mexico, and in particular Guadalajara, as a manufacturing solution for products sold into the US. We have been advocating this to our clients for a few years now", writes Eric Miscoll.

Reported quality concerns by some OEMs related to Mexico still may need to be addressed, although these are usually associated with manufacturing done in the border zones. Since this issue was first raised years ago, CBA has been trying to track down a credible case study where quality in Mexico was a significant long term problem, without success. However that perception still exists.

Guadalajara has a lot to offer in terms of a well established electronics industry, highly skilled workers, cooperative business environment, and competitive labor rates. "We expect that the value of Guadalajara as a destination for outsourced electronics manufacturing will continue to improve in the future. The city is also relatively safe, culturally interesting, and the reigning Miss Universe, Ximena Navarrete, hails from Guadalajara", he concludes.

If the latter isn't a good reason, than what is?

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