Cheap Labor

Querétaro is a city in central Mexico that economic experts have said models the economic development of the entire country. Some of the city’s success has been attributed to the growth of American companies doing business in Querétaro.

“It’s an example of what’s working in this country,” said Arturo Herbert, Mexican economist and international commerce professor in Querétaro’s prestigious university Instituto Tecnológico de Monterrey.

Queretaro, Mexico

Querétaro is a city of about 1 million people located 120 miles northwest of Mexico City. In terms of logistics, Herbert said, Querétaro is attractive to American companies because it’s not far from both the east and west coasts of Mexico and it is 500 miles from the international border with the U.S.

Foreign companies do business in cities like Querétaro because labor is cheaper and because the pool of high-skilled workers is large, said Herbert, a former university president who retired from the National Bank of Foreign Trade in Mexico.

General Electric, Bombardier, BMW and Mercedes Benz are some of the big companies with factories and offices in Querétaro.

Former Mexican President Felipe Calderon spoke at the inauguration of GE’s newest plant in Querétaro in 2011.

He said Querétaro is General Electric’s second-largest engineering center outside of the U.S. for the company's aviation division. About 1,300 Mexican engineers work in the aerospace industry in Querétaro, he said.

“These companies are looking for a good deal and we are interested in them doing business in Mexico,” Calderon said. “This is an example of the strategic relationship between GE and Mexico.”

Many things make it attractive to operate in Mexico, said Mauricio Varela, an assistant professor of economics at the University of Arizona.

“It’s cheap labor--let’s start there,” he said. “Minimum wage there is $5 a day and here it’s $7 an hour. That says it all.”