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...reason GM Mexico has remained profitable while mounting losses have pushed the parent company's U.S., Canadian and European operations to the brink of disaster boils down to the lower cost of doing business in Mexico. GM and other automakers, including Ford and Chrysler, have managed to keep the cost of production south of the California and Texas borders at Third World levels, owing largely to Mexico's weak unions...
...typical line worker at a GM plant in Ramos Arizpe or Silao earns $2.80 per hour, a mere 10% of the $28 per hour (not including benefits) earned by his counterpart in Grand Rapids, Mich., or Oshawa, Ont. Add in GM's crushing legacy costs - pension and health-care obligations to retirees - which are only a minor consideration in Mexico, and it explains why the country is a cash...
...GM Mexico's profit on some vehicles is as high as $16,000 per unit," says Francisco. By contrast, it's not clear whether GM is presently making money at any of its U.S. or Canadian assembly plants...
...With such a dramatic cost advantage to making cars in Mexico, it's no surprise that GM plans to max out production in that country as it struggles to shake off Chapter 11 bankruptcy protection and return to profitability...
...About three-quarters of the 504,858 vehicles GM Mexico produced in 2008 were exported throughout the Americas and the Middle East. But the vast majority - 68% of the total - ended up being sold in the U.S. market. (Historically GM has profited by importing vehicles into its home market from Canada and Mexico by taking advantage of lower fixed costs...