Setting up your company’s operating structure in Mexico

WEBINAR:

Setting up your company’s operating structure in Mexico

Who should attend this 1-hour webinar?
Executives whose companies face profitability or expansion challenges by manufacturing in the US, and who are considering Mexico as an alternative. 

Why should you attend?
To hear the learnings of companies that located some or all their manufacturing to Mexico, from experienced advisors who will explain five typical structural approaches and their considerations.

Increasingly, many companies – whose primary destination markets are in the US – are moving manufacturing operations or relocating specific links in their supply chain to Mexico.  

Once you’ve decided to take advantage of the benefits of Mexico manufacturing, how should you structure your operation? Contract manufacturing? Assembly only? Your own factory (lease, buy, build)? A shelter service that provides space, people and back-office support for your factory?

EWA (East West Associates) advisors will present the pluses & minuses of structure options, including relative costs, how to minimize the costs, set-up time guidelines, and where in Mexico one should consider locating.

In this webinar, East West Associates speakers will share their first-hand knowledge of Mexico manufacturing options, and discuss how their US-based clients have incorporated Mexico in their manufacturing and sourcing operations.

Closing China Operations?

Speakers

This webinar features seasoned speakers with real-life experiences in closing over 70 China plant closures and relocations, and with sourcing both within China and within relocation target countries:

Dan McLeod, Director, East West Associates
    Jacob Miller, East West Associates
      Closing China Operations?

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      Is Mexico an option for moving your US operations?

      WEBINAR:

      Is Mexico an option for moving your US operations?

      Closing China Operations?

      Speakers

      This webinar features seasoned speakers with real-life experiences in closing over 70 China plant closures and relocations, and with sourcing both within China and within relocation target countries:

      Dan McLeod, Director, East West Associates
        Jacob Miller, East West Associates
          Closing China Operations?

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          Closing China Operations? The Dangers & Challenges of Closing a Factory

          WEBINAR:

          Closing China Operations?

          Dangers and Challenges of Closing a Factory in the Current China Environment

          Closing china operations?

          About The WEBINAR

          Who Should Watch?

          If you’re considering closing or relocating your China manufacturing operation, you’ll benefit hearing the experiences of those who have already done so.

          Why Should You Watch?

          To find new ideas & updated guidance to address avoidable problems when closing or downsizing a plant in China, and to ease the path of transferring your manufacturing assets & knowledge out of China.


          Many C-level executives are closing their China manufacturing-for-export operations.  In the past 4 years alone, 100 MNCs have announced intentions to downsize or shutdown manufacturing in China.

          Why?  Because when a US-owned company makes products in China then exports them, they’re facing more and more headwinds:

          ✓  Annual increases in labor and production costs

          ✓  A more challenging regulatory environment for US operations in China

          ✓  Continuing US /China tariffs that are expected to increase

          ✓  Geopolitical tensions between China and US

          However, the process of closing China operations can threaten a company’s ability to properly serve its customers. If the plan is not carefully thought-through and not properly implemented, a plant closure can stress a company’s operational stability, strain supplier relationships, and risk one’s brand reputation around the world.

          Given China’s economy, many manufacturing facilities are downsizing or closing.  As a result, concerned Chinese authorities are paying particular attention to the regulatory compliance of companies closing operations. Other dangers include:

              • Work stoppages and extended strikes
              • Violence to plant management and personnel
              • Damage to plant and equipment
              • IP and physical property theft

          If carried out with thorough, highly detailed planning by a knowledgeable project team, executing the right plant closure plan will minimize the negative closure experience for all, and will produce lasting positive results for a company’s global operational stability, customer service, and financial performance.

          Speakers answer registrants’ questions, including:

          Our speakers presented real-life plant closure decisions and the results of those decisions, and illustrate key points using actual case histories.  Additionally, we addressed webinar attendee questions.

          For example:

              • What dangers might our people and assets in China face when it becomes known that we might close? Is it true that sabotage, local riots, and personal injury threats can occur? How do we avoid THAT?
              • When should the company only notify the employees on the actual day of closing? When should the company notify the employees in advance of the plant closure?
              • What are some local & regional roadblocks that companies are seeing when closing a China facility?
              • Is the EWA Plant Closing Methodology tailored to closing US-owned plants in China without “burning our bridges” with China-based suppliers, contract manufacturers and customers.
              • What should our Risk Assessment Plan include? When should I engage protective security guards?
              • What HR practices should we follow to be fair to our employees in China and to safeguard our reputation there?  Are there PSB (Public Security Board) considerations?
              • Is it relatively easy to physically move the manufacturing equipment we own out of China? Are we likely to face barriers by the Chinese government?
              • What should a manufacturer do to help protect our IP and know-how when relocating out of China?
              • As we assess where to relocate, what important in-country factors & data should we be sure to compare to China?
          Closing China Operations?

          Speakers

          This webinar features seasoned speakers with real-life experiences in closing over 70 China plant closures and relocations, and with sourcing both within China and within relocation target countries:

          Li Xiao | Senior Operational and Commercial Director
            • General Manager, Argosy Aerospace Materials in Shanghai
            • General Manager Lancaster Consulting, Shanghai
            • Head of Marketing, Wipro Hydraulics
            Vicky Shao | Director, China
              • Vice President of Human Resources, Flexco Conveying Equipment Manufacturing Company
              • Human Resource Manager, Lombard Risk International Ltd.
              • Executive Department Human Resources & Administration, Nitto Denko Corp.
              Jay Hoenig | Director, East West Associates
                • Chief Operating Officer Asia Pacific, Hill & Associates Group
                • Asia Pacific Vice President & General Manager, Bechtel Corporation
                • Chairman of the American Chamber of Commerce in Shanghai
                Dan McLeod | Executive Advisor, East West Associates
                  • Former Director Asia Pacific Operations. Ashland Specialty Ingredients (Shanghai)
                  • Former Director of Manufacturing & Supply Chain for Hercules specialty chemicals
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                  Shifting Manufacturing and Supply Chain Operations to Mexico

                  Shifting Manufacturing and Supply Chain Operations to Mexico

                  Companies have been sourcing and manufacturing in China for many years and enjoyed low labor rates, reasonable logistical costs, and a large supply chain base. However, the economic business model has changed as companies are looking to “localize” their supply chain and manufacturing closer to their customer base.

                  companies servicing US and North American customers are actively working to establish supply chain and manufacturing in Mexico to diversify beyond China.

                  The trend to diversify beyond China has been caused by a lot of issues, including significant logistical increases, expanding transit lead times, US/China tariffs, increasing Chinese production costs, Covid travel restrictions, etc.

                  As a result, for companies servicing US and North American customers, they are actively working to establish supply chain and manufacturing in Mexico to diversify beyond China.

                  For companies that serve Southeast Asian and even Chinese customers, we have seen a similar diversification trend from China to Vietnam and Thailand. Additionally, companies servicing European customers are diversifying to Central Eastern Europe for supply chain and manufacturing, rather than China. We do not expect these trends to slow significantly, even if shipping rates and lead times eventually moderate.

                  However, Mexico is not always a replacement for China. It does not have the same abundance of suppliers from multiple different industry sectors. Additionally, Mexican suppliers are currently being overwhelmed by the substantial number of requests from US companies looking to diversify beyond China.

                  In many cases, these suppliers are not responding to the large number of quote requests or are providing expensive quotes to determine if the company is willing to accept.

                  While Mexico does have good suppliers in specific industries, some components and products from China remain less expensive. Therefore, in our analyses, manufacturers are jointly reviewing the Bills of Materials (BOM) to determine which countries offer the best diversification alternatives, e.g., sourcing some products from Mexico and then, supplementing diversification efforts in Central Eastern Europe and Southeast Asia.

                  While Mexico has good suppliers in specific industries, some components and products from China remain less expensive.

                  US Automotive Manufacturer Example

                  As an example, a U.S. automotive manufacturer asked East West Associates to review their Bills of Materials (BOM). East West evaluated both Mexico-based and Thailand-based automotive suppliers for products shipped to the U.S.

                  Thailand was a good and less expensive supply chain source for particular automotive parts not currently produced cost-effectively in Mexico.

                  The company would have a long lead time sourcing from Thailand, as they do sourcing from China. However, they will not be paying applicable US/China Tariffs and are less susceptible to the geopolitical challenges between the US & China.

                  In this case, the Mexico and Thailand sourcing strategy worked well for the Automotive Manufacturer who need to cost-effectively diversify their supply chain network beyond China.

                  EAST WEST ASSOCIATES

                  About our Operations in Mexico

                  East West Associates seasoned executives are based in China, Southeast Asia, Central Eastern Europe, Mexico and the U.S. We are uniquely qualified to provide pragmatic support to companies that need to diversify their supply chain and manufacturing.

                  The East West Associates Mexico team has been operating in Mexico for many years and as a result, they provide on-the-ground support In Mexico. They have the existing business relationships to arrange meetings with Mexican companies, obtain qualified requests for quotes, support the product sampling phase, and develop new Mexican suppliers for U.S. manufacturers and distributors.

                  BOI-EV-Charging-Stations

                  East West Associates supply chain and manufacturing projects in Mexico include:

                    • Supplier identification and qualification of Mexican suppliers, and generation of RFQs to selected suppliers. Industries include automotive parts, automotive aftermarket products, aluminum extrusion, specialty stainless steel, lead-free brass plumbing fixtures, machines castings, injection molded plastics, steel stampings and medical products.
                    • Supplier audits of Mexican vendors
                    • Background Checks of Mexican suppliers
                    • Cost & Feasibility Analyses of establishing operations in Mexico vs. the U.S.

                  We are very active in this diversification trend, and have conducted numerous webinars on developing successful Mexican suppliers and manufacturers.

                  For assistance with determining if Mexico is right for your company or if you have additional questions, please call or contact us at 704.807.9531 or abryant@eastwestassoc.com.

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                  Major Investments In Thailand Focus on Electronic Vehicle Manufacturing

                  Major Investments In Thailand Focus on Electronic Vehicle Manufacturing

                  The global shift to electric and sustainable vehicles is set to bring about incredible transformation for the planet and its transportation needs, and Thailand is among those leading this charge.

                  Thailand strives to be a global player in electric and sustainable vehicles.

                  The Thai government strives to become one of the largest world players in Electric Vehicles by 2030, accounting for 30% of their domestic vehicle production. Through subsidized production, import tax reductions, and other incentives, the country is creating a supportive environment for manufacturers to invest in EV production.

                  The Thai government started subsidizing Electronic Vehicle manufacturing in September of 2022 – granting subsidies for promoting the use of EVs as well as incentives for excise, road, and import tax reduction, production of batteries, and the establishment of charging facilities.

                  Thailand has an established and robust EV supply chain, making it a prime location for global manufacturers. As demand for EVs increases, Thailand is poised to be a competitive marketplace for cutting-edge technology focused on sustainability. With rising investments in Thailand coming from a wide range of local conglomerates, automobile manufacturers are positioning themselves for a strong foothold in the EV industry. Not only are they advancing the technological capabilities of their products but also taking into account the unique challenges posed by a traditional reliance on combustion engines.

                  Thailand is poised to be a competitive marketplace for cutting-edge technology focused on sustainability.

                  Thailand’s Commitment to Electric Vehicle Manufacturing

                  Thailand has recently made a big commitment to the production of electric vehicles (EVs), and the Thailand Board of Investment is playing a key role in promoting this initiative and working hard to create an environment that is attractive to investors and EV manufacturers alike. This effort helped create a robust supply chain for EVs in Thailand, that can handle the demands of an industry set for significant growth.

                  Thailand Board of Investment (BOI) is working to promote this initiative and attract investors and manufacturers to the country. The BOI has been working with major global automotive companies from China, Japan, and Europe to centralize EV production and strengthen Thailand’s position as an EV hub in the region. By promoting Thailand’s manufacturing capabilities, the BOI is gearing up to attract billions of dollars in investment, creating jobs, and helping the country to meet its sustainable development goals. They place sustainability as top-of-mind and wish to be seen as competitive in the marketplace creating cutting-edge technology to curb carbon emissions and improve fuel efficiency.

                  As demand for EV sales goes up and the cost to the end-user continues to go down, the Thai government hopes subsidies to manufacturers will drive more interest in centralizing EV production. There is currently a strong automotive existing ecosystem with support from Chinese, Japanese, and European EV car makers already in place, making it a safe place to invest and bet on Thailand being a central hub for EV production for years to come.

                  Thailand has a clear vision for the future of their automotive industry, and the government’s initiatives in supporting the production of EVs demonstrate their commitment to sustainable development. The initiatives that the government is undertaking make Thailand an attractive destination for global players and improve the country’s competitiveness in the EV space. They are looking to become a one-stop service facilitator to EV companies that want to set their regional headquarters in Thailand.

                  The BOI’s approach towards increasing EV usage in Thailand also takes into account supply chain and infrastructure aspects aimed to make EVs accessible and more practical across the country.

                  Recently, the BOI just approved a tax holiday package of three to five years for charging service providers. While Bangkok enjoys more than half of the country’s total charging stations, this tax holiday will offset that imbalance and attract investments from all corners of the country, leading to an extensive and robust infrastructure for charging EVs across Thailand and opportunities for more investments to come.

                  As Thailand continues to attract major global players, it is exciting to see the country’s role in the EV market increase. With the growing popularity of eco-friendly vehicles, Thailand is well on its way to turning this vision into a reality and becoming a key player in the global EV industry. Industries need more governments actively looking to increase access to EVs, and Thailand is showing us how that can be done.

                  BOI-EV-Charging-Stations

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