$20M labor savings
ZF TRW, an automotive safety company, learned the risk of self-performing location strategy the hard way. Facing competition for labor, high attrition, poor work ethic and low labor availability in two Mexico manufacturing facilities, the ZF TRW leadership had a strong mandate to avoid replicating these challenges at their next site. They needed to find a market where they could maintain a competitive edge while scaling their business to include expanded and diversified operations.
After researching nearly 20 markets across Mexico, narrowing down to a short list of six and touring three locations with the client, Labor Analytics informed ZF TRW on factors not evident through statistics alone. Risk factors such as minimal infrastructure, union activity, gang crime, lack of sufficient transportation networks and poor workforce productivity were all evaluated for ZF TRW’s needs.
Ultimately, the optimal location for ZF TRW's new $48 million, 30,000 sq. m. (~320,000 sq. ft.) facility emerged, offering a talented and stable labor force eager to work in manufacturing, with the capacity to scale to 3,500 jobs. Supporting these key labor attributes is a $20 million payroll saving over five years.