New GM Commitment Highlights U.S. Benefits to Mexican Manufacturing

Recently General Motors announced a nearly $700 million planned investment to expand their automotive manufacturing capabilities in Mexico, highlighting again the strength of the industry in the country. Today, the automotive sector represents over 20 percent of the Mexican GDP, with vehicle production nearly doubling over the last three years.

GM is one of nine automotive manufacturers in Mexico, with the second largest output after Nissan, according to the Mexican Auto Industry Association. The country as a whole is on track to produce three million cars in 2013 vs. 2.8 million in 2012.

Many economists view moves like this as a positive trend for the U.S., given the fact that Mexican exports have significantly more U.S. content than Chinese do; with China at about 7 percent and Mexico at 36 percent.  In addition, significant manufacturing jobs have already been added to the economy in Texas as a result of the migration to Mexico, with projections for over a million more manufacturing jobs to be added throughout the U.S. by the end of this decade.

With the European Union faltering, it would appear that the goals of NAFTA, first implemented in 1994, to provide easier trade between all of the North American countries, thereby strengthening the economies of the entire region, is poised to become reality.