Harvard Business Review did a study back in the mid-90's comparing the cost to manufacture in a range of countries (outside the US). Mexico came in at the top r

Harvard Business Review did a study back in the mid-90's comparing the cost to manufacture in a range of countries (outside the US). Mexico came in at the top ranking for lowest total cost of operations, much of it due to reduced shipping, reduced lead times, and tax benefits due to NAFTA. A lot of the problems with Mexico, though, are due to infrastructure and workforce. When I worked for a big electronics multinational, we had a plant in one of the Mexican maquiladoras. Management wanted to expand operations there, but the problem at the time was that the power grid and water supply in the area weren't sufficient. The factory I visited was nice, the working conditions were safe and clean, employees had a straight 40-hour work week, and the atmosphere was friendly and relaxed. But according to the plant manager, there was really high turnover. This wasn't a sweat shop, the pay was good, and they weren't any chemicals or other hazardous materials - conditions you often read about regarding the high turnover in maquiladoras. Whatever the reason, it's really hard to run an operation when you lose the majority of your trained workers every year.