Manufacturing in Mexico FAQs

Since 1986, The Offshore Group has been offering its ISO 9001:2008 registered Shelter Plan to global manufacturers from the aerospace, automotive, electronics, medical device, HVAC and general manufacturing industries.

The following are a sampling of frequently asked questions that have been asked over the years. Please download the Manufacturing in Mexico FAQ document at the bottom of the page to go into further detail.

Q: What are the advantages over operating under The Offshore Group Shelter Plan, when compared with other options available for manufacturing in Mexico?: A: Contract manufacturing is preferable for operations that require limited man hours, experience cycle demand, and that do not require direct control over production quality. Joint ventures are sometimes beneficial for firms that partner with domestic firms with pre-established distribution channels in order to sell into the Mexican consumer products market, while the wholly-owned subsidiaries may be the best vehicle for organizations with the high control requirements. The Offshore Shelter Program is the option of choice for companies that are seeking to start operations rapidly in order best leverage their own strategically critical competencies by outsourcing non-core functions to a trusted partner.

Q: The Offshore Group’s Mexico manufacturing locations are in the country’s interior. Isn’t the border a better place to set up a maquiladora operation?: A: While the border may be a more suitable location for some types of operations, the interior of the country has a stable, well-rooted population. Workers at plants in the interior are typically from the area. Strong family ties make turnover rates in these communities lower than those typically experienced on the border. The interior cities of Mexico generally enjoy a better security situation than do border communities. The Offshore Group offers interior locations in Guaymas and Empalme, Sonora; Saltillo, Coahuila and Guadalajara Jalisco.

Q: How does manufacturing in Mexico compare with doing so in other low-cost countries such as China and India?: A: AlixPartners recently released its U.S. Manufacturing-Outsourcing Cost Index Overview and Highlights. Results of the study reveal that in 2009, when all costs are considered, Mexico ranks the lowest cost country choice for the outsourcing of manufacturing by U.S. businesses. India is ranked at number two, while China has lost ground and is now ranked sixth.

Q: How does The Offshore Group reduce my risk and expense?: A: The Offshore Group Shelter Program’s uniquely flexible international business model accomplishes this. Offshore International, Inc. in Tucson, Arizona has agreements with its Mexican sister companies, in the state of Sonora, in Saltillo, Coahuila and in Guadalajara, Jalisco for the provision of outsourced manufacturing support, or “Shelter Plan” services to firms with whom it signs contracts within the United States. Shelter Plan clients minimize risks by manufacturing in Mexico within a US legal framework. Since, in most cases, The Offshore Group owns real estate, it can provide leased manufacturing space, as well as provide build-to-suit facilities. This eliminates the need for manufacturers to make expensive capital investments. For companies that want to locate outside of The Offshore Group’s Mexico industrial parks, the company offers the option to provide its shelter plan services in leased property or in client owned facilities.

Q: What sets The Offshore Group apart from other shelter companies in Mexico?: A: The Offshore Group offers deep and flexible world class service. In addition to offering its vertically integrated Full Shelter Plan option, The Offshore Group offers a Flex Shelter alternative that enables companies to operate outside of The Offshore Group’s nationally recognized industrial parks.
Additionally, The Offshore Group:
• Is the only shelter company in Mexico to have won the country’s coveted “National Exporters Award.”
• Is one of the largest maquiladora organizations in Mexico, and is the largest private sector employer in the state of Sonora.
• Provides daycare at its largest industrial park.
• Employs doctors and nurses around the clock at its industrial sites to tend to workforce health issues.
• Owns and operates the only desalinization plant on Mexico’s West Coast.

Q: How does The Offshore Group bill its clients?: A: All Offshore Group invoicing is done from Tucson, Arizona. The Offshore Group charges its customers market rates for leased industrial space, straight pass through invoicing for costs incurred in Mexico (payroll, utilities, customs fees, transportation costs, Mexico purchases) with no administrative mark up, and charges a negotiated transparent Goods and Services, or Shelter, Fee that is based on labor hours.

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