Why Mexico instead of USA?
A sample US company pays its
direct labor operators $9.00 per hour in wage plus another $2.70 in
benefits, totaling $11.70 for the fully fringed cost. This amounts
to $24,336 for non overtime wages per year.
By comparison, fully fringed
wages for Mexican direct labor employees can range from abut $2.50 to
$6.50 per hour, depending upon skill level, performance bonuses, and
the peso / dollar exchange rate. The high end of this scale is for
highly-skilled operators such as certified machinists and can outweight
wages for many indirect functions. The low end of the scale is most
typical of operations which require on-the-job skills. At $2.50 per
hour and 48 hours per week (the normal Mexican work week), a direct
labor employee's fully fringed cost is $6,240, about 1/4th the US cost
with a 20% increase in non overtime hours.
To arrive at the fully-loaded direct labor rate, add the
proportional cost of indirect labor, supervision, the facility, utilities,
supplies, Mexican administration (see mission and capabilities), insurance,
profit, etc...everything ranges from about $4.50 to $10.00+ per hour,
depending upon the amount of the above-stated costs. Feel free to contact
us to receive a tailor-made appraisal of your operation's fully-loaded rate.
Source: Quality Manufacturing Services (QMS)- Mexican Contract Manufactruing & Subcontracting