Medical Device Businesses move to Mexico
The team needed to determine machinery types, number of lines, packaging machinery, location of product sterilization, capacity, production, products made, future manufacturing plans, average number of items per lot, number of shifts and days per week, vertical integration, raw materials, average daily production, capital costs, headcount and burden by staff function.
Primary Impact identified competitors with highly profitable product lines that owned their production facilities. The California and Utah businesses planned to move molding and extrusion to Mexico in the next two years.
The Utah business plans to consolidate its customer service, general and administrative functions to its parent business in the Southeast. The Texas company has long term tax incentives and a labor arrangement in the local community which makes it beneficial to stay in the U.S..
Competitive Market movement to Mexico
The client gained confidence about their tough decisions as competitive businesses followed them to Mexico and consolidated operations. Higher gross margins simply delayed the migration by other
