Cracking the border
Fleetwood RV officially opened its new manufacturing facility in Mexicali, Mexico, this morning to signal a new era in the construction of recreation vehicles. But, when the ribbon was cut, it may also have opened an entirely new market for RV sales.
Following the press conference in which the ribbon was cut and speeches made congratulating Fleetwood for selecting Mexicali as the location of their new plant, I had a chance to talk with Baja California Governor Eugenio Elorduy Walther. The governor was enthusiastic about Fleetwood’s plant opening for several reasons.
First, he was happy for the job opportunities the plant created to employ people in the community. The Mexicali region is staking its future on the ability to attract and retain manufacturing jobs not only from the United States, but from all of Mexico as well.
Governor Walther was also happy because the plant signaled the official start of the recreation vehicle industry in Mexico. “I think the Mexican market is ready for these types of leisure vehicles,” he explained. “Baja has always had a strong tourism industry. I think the Mexican people will see these vehicles as a way to relax and be with family.”
Someone should sign this guy up as an RVIA spokesperson. The governor is a former auto dealer. In fact, when his term is up in a few months, he intends to return to the business world. Walther apparently sees more opportunity in business than in politics — an idea I wish Americans could import to Washington.
“Having Fleetwood open a manufacturing facility in Mexicali puts us on the map for the entire RV industry,” Governor Walther added. “This area is an important location for promoting all of Baja, not just for people to visit but for companies to bring jobs.”
The staff at Fleetwood had nothing but positive things to say about the workforce they encountered in Mexico. Apparently, business owners work with politicians who work with technical schools to identify opportunities for people to work. Then they each go about turning those opportunities into reality.
The technical schools train to a curriculum developed by colleges who interview business leaders and visit the factories to view the processes necessary to get the work done. At Fleetwood de Mexico, most of the line supervisors have degrees in industry engineering. That promises to greatly increase the efficiency of the manufacturing process as well as the quality of units produced.
The mayor of the community as well as the governor both have solid experience in running businesses, not in sitting in some political science lecture hall. That means they know first hand what business owners need and expect from their workers.
When I was growing up in the 1970s, Japanese radios were sold as cheap junk. Then, someone over there got a clue. They looked at the size of the electronics market in America and abroad. They correctly assumed that if they could just embrace the quality aspect of manufacturing, that they may be able to reap a huge financial reward.
The people of Mexicali have apparently studied the Japanese model. They are committed to improving the economic future of their community by creating opportunities for their citizens to work in well-paying jobs in industries that seem poised for future growth.
It will be interesting to see what happens in the year ahead as Fleetwood brings a world class manufacturing facility to a people hungry enough for opportunity that they have built an infrastructure around training people to be ready to work. Just like in Field of Dreams, Mexicali leaders knew that “if we build it (a quality business environment), they (manufacturers) will come.”
Fleetwood is the first to set up shop. I know other manufacturers are tired of the incessant demands of unions, burdened to the point of inefficiency by ridiculous government regulation, squeezed out of profitability by punishing tax laws, and hampered by a workforce that calls in sick for every little sniffle. Will other manufacturers follow suit?
June 12th, 2007 at 7:21 pm
I have been in the R.V. repair business for 50 years, this is the first time that I can remember that our customers are saying that they will not buy a product (Speaking of R.V’s) that are built in
Mexico. I have been a Service/Center for Fleetwood for the past 27 years and the R.V. buying public are not happy with the move Fleetwood has made. If the products built in Mexico are built to be sold there, O.K. but if they bring their products into the U.S. I am afraid that Fleetwood will be in for a bigger surprise yet.
June 11th, 2007 at 7:55 pm
A cheaper work force with little or no government regulations means little if the company isn’t listening to their customers, and not asking the right questions from their customers. It was this kind of thinking the U.S. auto industry started when the “bean counters” took over several decades ago, yet they struggle more than ever. Can anyone explain to me why Toyota/Honda/Nissan/ Mercedes & BMW all have successful plants here in the good ole’ USA, and continue to thrive? Fact is; it was this kind of thinking that opened the door for the Japaneese auto manufacturer’s, and this kind of thinking that open the door for several new RV manufacturer’s over the last few years. Today we can by U.S. auto’s for less money, yet we don’t. Lower labor and a lower price won’t fix Fleetwood problems.
I have been going to the TRVA trade shows for the last 20 years, meeting folks from all over the world, yet I have never seen a dealer, vendor, or representative from Mexico. So where is this Mexican growth opprotunity coming from?
June 11th, 2007 at 5:44 pm
Bob,
I agree with you it would be best to spend it here first it just seems America loves to spend it elsewhere before taking care of our own and it never changes Democrat or Republican all the same spend spend while always saying we have no money.
June 11th, 2007 at 4:46 pm
Steve,
They could afford to buy them now if the American companies that go down there had to pay the same wages and benefits they are trying to escape from here. It’s not an easy solution and you present an interesting viewpoint.
However, instead of spending the money in Mexico or Canada, how about spending it at home or providing assistance here before we give anymore to anybody who isn’t right here where the problems are.
June 11th, 2007 at 12:27 pm
After giving this some thought I think if America would stop and think about our neighbors to the north and south of us and come together we could improve everyone’s situation. We give so much money to other nations we give Pakistan 80 million (yes 80 million) per month to search for Osama without any strings attached we are spending billions on the war and will never get anything from it other than more hatred. I would much rather give this money we love to throw around to Mexico and help this country step up and be a responsible neighbor and give the millions of poor a reason to stay in there own country and have a stable and steady neighbor who at least share the same values and basic beliefs we do. Then and only then will the Mexican people be able to receive a decent living wage and the imports and exports between all three countries could and should continue to make us stronger in the long run maybe just maybe companies would not see a need to go south to escape the cost but go south to expand and sell products to Mexico to people who could then afford to buy the products they make.
June 10th, 2007 at 11:47 am
Once again, the ‘bean counters’ win out over the benefits of “American pride, jobs and allegiance.”
However, what Fleetwood has done, or rather HAD to do, is quite smart, in that it has gotten a jump on what is coming - the North American Union. Guess they realized that they could ‘participate now and save some money, or participate later and pay much more.’ Their actions are but another glimpse into what is coming from our government.
Yep, no doubt there is ‘initial knee jerk’ resentment from all quarters about what Fleetwood has done, but I say “give ‘em a break.” This is just business. Try to look at it this way - if you see a freight train (aka the faltering U.S. economy and all the inherent problems associated with it) bearing down on you, you can do one of two things: (1) stand there and get killed, or, (2) move in a direction that protects and benefits you. This is all that Fleetwood has done. It was either ‘get with the new paradigm’ or go out of business. (of course, too, the weather in Mexico is much better than in Canada, since those were their two choices.) And if quality in workmanship becomes too big of an issue for dealers and the customer, it’ll get worked out one way or the other.
Much change is coming, folks, so get used to seeing much more activity in this industry. And even if the Japanese, the Chinese or the Germans jump into a supposed void created by Fleetwood, it doesn’t matter. We’ll keep selling and servicing RV’s and the party will still go on. Besides, it ALWAYS comes down to PRICE AND SERVICE, doesn’t it?
Ya’ll honk as you go by! (in something other than a Fleetwood product? We’ll see….)
June 9th, 2007 at 11:38 am
How convienent for Fleetwood, Buyer Beware. One way for Fleetwood to avoid the US Lemon Laws and keep producing poor quality and cheaper units. It’s ridiculous to know that an American Eagle now costs as much as a Blue Bird, yet is less than half the quality.
Maybe they will send all their buybacks to Mexico for sale, instead of what they did in Arizona.
Fleetwood really should be ashamed.
Any further information needed, visit my personal page at http://www.geocities.com/gowieder for a reality check.
June 8th, 2007 at 4:37 pm
This isn’t even an RV issue, it’s an American manufacturing issue. We didn’t learn anything from Japan’s success in the automobile industry so what makes you think we will learn anything from Mexico’s entry into the RV industry?
Steve hit the nail on the head, until we reverse our poor educational systems, instilling a work ethic on the manufacturing floor, get our skyrocketing healthcare costs under control, and eliminate the abuse in our local, state, and federal government systems .. this trend will continue for many years into the future.
This is not pessimism, it’s reality. We have done this to ourselves and there are precious few manufacturing companies doing anything about it. Fortunately, we do have some quality American-made RVs that we can be very proud of.
I personally don’t buy Japanese cars and don’t intend to by Mexican RVs.
Does this mean all the illegal aliens will now go home to Mexico and work in Mexicali if it is such a wonderful environment and role model for Mexican workers?
June 8th, 2007 at 1:18 pm
Very interesting perspective, Greg. I appreciate this angle on something that many folks have instinctively reacted to with anger and frustration. Great change doesn’t come about without some growing pains. As you pointed out, surely we can learn some things from our neighbors, glean the best from their experiences and knowledge, apply it to our own practices, and come out with a better process and product. It won’t be without trial and error, but then nothing worthwhile is.
We’ve heard plenty of “The sky is falling.” It’s more productive to open up a constructive forum of discussion, which I think you’ve done here.
It’s certainly food for thought, at any rate. I’ve half a mind to go do some surfing about global economy concepts.
June 8th, 2007 at 1:07 pm
I don’t think it’s a matter of if other manufacturers will follow, but simply how quick?
When Fleetwood made their initial announcement about this several months ago, one of the points they stressed was being able to lower costs. Will this get passed on to the consumer? I think not. No other manufacturer of any type of product has used the “move out the country to lower costs so I can compete excuse” to actually lower the end price to the consumer…it’s all ended-up in net profit as a corporate bonus or to the stock-holders.
The real question we should all be asking is, how long until Toyota or Nissan, or even a Chinese manufacturer, jumps into this industry with both feet.
June 8th, 2007 at 12:50 pm
Unfortunately this country and all of us who live here are driving companies to move out of America to survive. I live and work in California and we have had the same problem trying to survive in this over regulated state who cares only for the employee and nothing for the employer. Every American wants anything and everything available to them that they see on TV or hear about on the radio, our kids demand everything and we gladly give it to them while teaching them nothing about hard work, and simple politeness. We want to pay the cheapest price regardless of the quality, Then complain about why companies are leaving and Wal-mart is so large. We have all but given up on skilled labor and craftsmanship we seem not to demand it or expect it any longer we do not get respect from the stores we go to and tolerate the poor attitudes the employees have while taking our money and not even smiling or have a nice day.