There’s a reason why so many US-based companies contract their manufacturing in Mexico. Many businesses are aware of strategic trade benefits with Mexico without realizing the significance or value involved.
In 2019, Mexico’s GDP was estimated at $1.3 trillion. They continue to be the USA’s largest trading partner in goods, totaling $677.3 billion. An HSBC report projects shifts in the top 100 global economies by the year 2050, envisioning that Mexico will become the #8 world economy—quadrupling its GDP.
Cost Savings and More
Saving on costs may be the most obvious common denominator motivating partnerships with our southern neighbors, but price is meaningless without quality.
Mexico provides the best of all scenarios: companies can save on time and costs, unburdened by the call for specialized expertise beyond their organization’s resources.
That’s precisely why some of the widest-known brands in America source their manufacturing needs in Mexico, including companies like:
- Coca-Cola
- IBM
- Sony
- Toyota
- General Motors
Specialized Electromagnetics Manufacturing in Mexico
It takes a lot for an American company to become a global leader in producing magnetics and electronics. Catering to businesses requiring customized parts, prototyping, and rapid development of their finished products calls for excellence and experience.
Companies may need a small, mixed order or a substantial production of the same product. Often, they need these right away.
Quality materials, reliability, and cost are all irreplaceable ingredients of SCHOTT Magnetics’ success. Below, we’ll illustrate the many strategic reasons manufacturing in Mexico allows us to provide you with the very best custom electromagnetic products.
Why Should Businesses Contract Their Manufacturing in Mexico?
In their native tongue, Mexican factories that export their products are called maquiladoras. These facilities are the lifeblood of the local economy—something that brings Mexico great pride. Multiple factors make Mexico the ideal place to contract the manufacturing of electromagnetic parts.
1. Tijuana: Everything You Need For a World-Class Manufacturing City
Tijuana is among Mexico’s fastest-growing cities. It’s one of the largest cities in Mexico and one of the most highly populated. In particular—over decades, Tijuana has risen to become a world-class manufacturing city.
This provides a wealth of employment and industry, along with competition that helps to cement their high quality standards. More than 570 maquiladoras in Tijuana provide over 100,000 jobs.
2. Add Manufacturing: Skip the Startup Headaches
Partnering with SCHOTT for your electromagnetic manufacturing needs is like adding us as an extension to your business. You gain the benefit of contacts, trained workers, supply-sourcing, affordable shipping, and an expert who can align with your needs from prototype to finished product.
3. Low Costs
Labor and industrial lease prices are significantly lower than in the US. In addition, contracting with maquiladoras in Tijuana comes with the benefit of duty-free customs and no tariffs.
4. Easy to Inspect
You want to know you’ve made the right choice for a long-term manufacturing partner. Tijuana’s proximity makes it easy for you to visit the facility on-site, even on a single-day round trip.
5. Quick Delivery
Products manufactured in our Tijuana facilities can be shipped to arrive in 1–2 days.
6. High Quality
We’re able to source the highest quality supplies. We also have the skilled resources for much of your assembly needs.
7. Focus on Your Own Growth
Completely remove the hassle of sourcing and hiring skilled employees, rent and utilities, permits and approvals, and the extra time it takes to grow new operations for your business. Remain focused on what you do best while still saving on costs.
8. Scale at Pace
With our turnkey contracting, you’re ready to start producing results, meaning your company resources can go towards scaling your business at the same pace we can manufacture. Because we can handle quick turnaround and flexible batch orders—large and small—you don’t have to wait for larger orders to start earning a profit, or worse: Turn away customers that can’t wait for smaller orders.
9. Stable Economy
Mexico’s economy is stable, which means your business model is predictable. Low costs are only meaningful if they are qualitatively consistent for years. Mexico has steadily raised Tijuana up as a manufacturing city over decades.
10. Geographically Strategic
Mexico provides a strategic-geographical benefit for manufacturing electromagnetics in the US. This makes our Tijuana-based manufacturing even more advantageous for the same reasons. Our contract manufacturing in Tijuana is only 20 miles south of San Diego, reducing production turnaround times, shipping time, and costs.
Because Mexico benefits from ports, international transportation corridors, airports, and routes to other countries, it means the free flow of goods and supplies to and from Tijuana facilities—cutting costs both in supplies and shipping.
11. Free Trade Agreements (FTAs)
The United States–Mexico–Canada Agreement (USMCA) entered into force on July 1, 2020, replacing the North American Free Trade Agreement (NAFTA). Tariffs are still at zero, and further regulations guarantee the quality of facilities and worker conditions. It also protects markets, encourages economic growth, and keeps roadways, waterways, and air open and accessible for shipping transportation. Importantly, USMCA also protects intellectual property (IP) and patents.
Mexico’s FTAs with Europe, Japan, and others are significant in providing internationally recognized protections and stability to the agreement held with the US.
Industries SCHOTT Magnetics Manufactures for in Mexico
SCHOTT Magnetics provides custom electromagnetic parts unique to the industries we serve. With your blueprint, we can reverse engineer to your specifications. We serve the following industries.
Industrial-Commercial
We create commercial inductors to store energy for anything that requires a power supply—computers, lighting systems, and motors, to name just a few.
We produce commercial magnetics used in these industries and more:
- Automotive
- Construction equipment manufacturing
- Assembly
- Welding
- Agriculture
- Mining
Telecommunication
We build audio transformers for professional audio industries. This includes anything from digital radio broadcasts to music production studios. Our transformers are used in audio devices like:
- Microphones
- Loudspeakers
- Amplifiers
- Mixing consoles
- Computer audio equipment
- Audio converters
Our transformers are used to improve the quality of audio signals across the entire human audio spectrum, from 20Hz to 20kHz, to protect output going to loudspeakers and to isolate alternating current (AC) signal paths from direct current (DC).
Energy/Solar
Our transformers are playing a role in transforming the sun’s energy into power. Solar panels use an inverter to convert power from a direct current to an alternating current. Our transformers prevent overvoltage and provide a smooth, reliable transmission of consistent power.
Aerospace/Defense
We are an ISO-certified global manufacturer of electromagnetic components for aerospace, military, and defense. This includes our inductors, coils, filters, and chokes. We specialize in the following:
Aerospace transformers and magnetic assemblies for:
- Manned/unmanned military vehicles
- Missiles
- Latches and trigger mechanisms
- Wing flap and tailfin actuators
- Hydraulic actuators
Aerospace transformers with vibrator-inverters, voltage stabilizers, and high/low voltage booster ignition coils:
- Single-phase to three-phase
- Two-phase to three-phase
- Three-phase to two-phase
- Three-phase to single-phase
- AC/DC rectifier self-regulated units
- Miniature instrument
- Varying kilovolt-ampere ratings, weights, and operating temperatures
Military aircraft magnetics assemblies:
- Wing flaps
- Sensor systems
- Missile components
- Latches
- Trigger mechanisms
- Cryogenic pumps
- Cooling fans and motors
- Auxiliary power units
Medical
We make medical-grade isolation transformers and magnetics that keep hospital patients and staff safe by protecting medical equipment from electrical shock. Our isolation transformers and inductors are fully isolated from the supply line while reducing leakage current and power loss.
Our transformers and inductors transfer AC power to medical devices using magnetics in place of an electrical connection to prevent electric shock.
SCHOTT’s magnetics are used in numerous medical devices, including:
- MRI machines
- Pacemakers
- Insulin pumps
- Surgical devices
- Sleep apnea machines
Certified to Provide the Best for Every Industry
Our products are RoHS compliant, lead (Pb) free, and conflict-free. We are ISO-9001:2015 certified, and our certifications include the following:
- CSA
- EN60950
- UL
- UL 60601
Customized to Your Needs
We offer a wide range of custom-tailored services to match your unique needs.
Some of the services we provide are:
- Hand assembly
- Joining PCBA with custom magnetics
- Coil winding
- Automated electrical testing
- IPC soldering
- Wire terminal crimping
- Potting and encapsulation
With our network of suppliers and affordable manufacturing, SCHOTT provides the highest quality products to these industries at the most competitive prices—on time and at budget.
How Much Does it Cost to Manufacture in Mexico?
When all things are factored in, is it cheaper to manufacture in Mexico? Yes—manufacturing in Mexico saves on costs for US-based companies. This is the result of multiple factors. Three of the most impactful cost-saving benefits from contract manufacturing in Mexico are labor costs, lease rates, and shipping costs.
Labor Costs
In 2022, manufacturing workers in Mexico earned between $3.10 and $3.20 per hour. Higher-skilled workers cost around $6.00 per hour at most. This is a major factor in the economic growth Tijuana has seen from the success of manufacturing facilities held to the highest standards for international trade. (source https://www.inegi.org.mx/ is in Spanish)
Lease Rates
There are different classifications for the types of industries that operate in Tijuana, including specific designations for businesses that export products or services. For a Class A industrial facility, like manufacturing, the price per square foot in Mexico is around $0.48. Compare this to the same classification in the US—in 2021, a square foot for manufacturing was leased at $6.89.
Shipping Costs
Shipping is one of the great geographical benefits to our manufacturers in Tijuana. A 40-foot full-container load can be shipped from Mexico to California for anywhere between $2,480.60 and $2,741.72. This same shipment from China would cost more than $10,000.
Let SCHOTT Bridge the Manufacturing Gap for Your Business
With over 70 years of experience, SCHOTT is prepared to exceed your need for rapid development, prototyping, and production of magnetics and electronics. We can act as an extension to your business, while your customers enjoy the power of fast, flexible results at the highest quality standards.
We’d love to talk with you about our contract manufacturing in Mexico. Give us a call to get started today!
