Technical skills and trades are critical for Mexico’s manufacturing growth

By Michael Hissam

Mexico’s export industry – the maquiladora industry – continues to ride the rising business tide.

Emilio Cadena, President of INDEX,
the national export industry and maquiladora association said a lynchpin of sustained success appears to be in training the future cadre of skilled trades people in the country.

While easier to focus on the continued development of engineers, skilled trades working to international standards has become more critical and will be a newer focus of INDEX efforts.

He wants INDEX members to become employers of choice in Mexico:

Recent reports in national media stated that again the data for business is looking good for Mexico. How is this affecting the maquiladoras?

The data looks very good for Mexico in terms of manufacturing for exports. The data does not look great for Mexico in other sectors. The situation today for investment and using Mexico as a manufacturing platform is fantastic.

When we are talking about the platform for export, we have seen a progression of the technical side to support the complexity of the products. To what extent is INDEX promoting that as it works to improve the image of the maquiladoras?

It is now part of our strategic plan. I have to say that I believe it is one of the big areas of opportunity. I could not say that it has been a success of INDEX on how we are developing the skills of Mexico and I certainly would not say that it is a success in Mexico in terms of how much or how many people we have prepared for the potential that we have.

What we are doing today is that we are making talent development the number one priority of INDEX.

When it comes to talent development in Mexico, who are the stakeholders? Who is going to make it happen other than INDEX members?

There are pretty big players. One is the location of system in charge of training people on trades. We at this first stage do not want to do anything about engineers, we have very good engineers. We have very good higher education schools and it should not be the priority.

What we want to focus on is teaching people trades; to use a plastic injection machine, to use a CNC center, to weld to the standards of the world environment to be a maintenance technician. That is what we want to do. The players are the location assistant, the government so we can define a strategy in front of all these, and then the companies. We need people to participate.

What about messaging, what about INDEX outreaching to those you want to develop as well as those that have the capability to give them the tools to develop?

We have to work together with the government.

We are implementing what we call short-term training programs. That is how we can take an unskilled operator, an assembly operator and in a very short time focus on teaching a specific trade and the value that we need. We have them prepared to be part of the global manufacturing environment. Bring somebody who does not know how to do anything else other than maybe put two pieces together.

We teach them in 300 hours the basics of plastics, the basics of running a plastic injection machine, teaching the values that we need in the manufacturing industry, honesty, responsibility, solidarity, teamwork and have them ready in 300 hours to have a better job.

Social mobility is directly related to value, if we want to have social mobility in Mexico, we have to teach people how to do something, how to give more value to the organizations.

You seem to be saying that employers should not be looking at production or technician employees just as a commodity. Are you urging the employers to set goals in such a way that people want to go to work for them and stay there?

Becoming an employer of choice is very important. The number one reason why people work in any organization is pride. We have to make sure that we create an environment, a culture in our companies, in our operations where people are proud to be a part of it. Pride becomes how much I am paid, the working conditions, what I produce, how does my work impact the community, the world.

It includes what else I do in my facility other than just make a product such as social responsibility programs, being environmentally responsible, as well as safety for my kids. It has to be a fantastic thing and a great company to working for.

To what extent are the employees, -- blue collar and technicians -- receptive to this type of thinking?

It is a reality, one of the most important things I try to get across now as President of Index. We are developing work places where people are feeling they belong to something great and something that is not less than a facility in Germany or a facility in the United States. It is being accomplished today, the lack of culture is not a problem in Mexico, it is a problem in most organizations.

Stephen Covey said “culture is the only competitive advantage no competitor can take away from you, they can buy the assets, they can buy the markets, they can buy the individuals from you company but not the culture.”

Many times companies come to Mexico or choose to expand in Mexico. They say, “Here is the way we have done it for years in the United States or somewhere else.” To what extent should they leave that thinking north of the river?

The corporate culture is the corporate culture; the mission, the vision and the values of the corporation are what they are. If you believe in those, you should bring those to Mexico. The task is how to bring them to Mexico, we as Mexicans have and are capable of having the same values and priorities as somebody else.

The issue is how do you implement them in Mexico? How do you talk to the Mexican DNA so they get it?

That is where the difference is, it is not that the mission should be different, it is on the implementation process of that mission and that culture in Mexico where we are a little bit different. You cannot manage a conflict in Mexico the same way you manage it in the U.S. because our DNA is not built the same way. You cannot manage teams the same way as you manage them in the U.S. because our DNA is different.

The task is more in the implementation process and realizing you have to do it and that you are going to bring it to different people, but the end goal should be the same, you should not expect less from the Mexican facility, you shoot high. If you start a new facility in Mexico today it should be the best operation in your corporation, not because it is in Mexico but because it is the newest one.

This seems to point to respect for the employee as well as from the employee.

That is one of the golden rules of building teams and building highly efficient teams. If you have a football coach who does not respect the players, that team is not going to win. It is the same thing here. You need to have a corporation and a leader who respects the culture because they believe that it is a culture of winners.

When you get that message across, when you make me feel that I am a winner to you, I am going to help you win.

You talk about plans and things that have to happen. Share with us a couple of those and where will it take Mexico, the maquiladora industry, INDEX by 2025.

We need to have an exponential growth on the manufacturing footprint in Mexico because if we make these changes, they are going to make Mexico extremely, extremely attractive.

The two key changes in Mexico, that if we can execute them are going to make Mexico the best place in the world for manufacturing. Energy, if we can have more competitive price on energy, especially electricity and natural gas, we have good quality. We need good quality of distribution and at the right price, at a global competitive price, that is one.

The second thing, if we can walk into a trade school and see 100 kids welding, ready to be used on the investment that is happening right now and another 100 kids machining and another 100 kids doing maintenance to tool and die, to plastic injection mold and things like that, then there is no limit to what we can do.

Are the recent new tax regulations a big burden for INDEX members?

We are working on the certification process that was defined last year by the tax authority so we can waive the payment of the Value Added Tax (IVA) for temporary imports of materials.

It has been a very interesting process, difficult in some senses for the authority and for us. We are through the toughest, the steepest part of the learning curve. It is a new process, and every time we try something new generally people do not like it.

I am optimistic it is the right path; the authorities have the right level of enthusiasm and are listening to us and opening the doors for discussion. They do not always accept what we tell them but who does in negotiations.