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Populuation 

• Leon is the largest city in Guanajuato with as estimated population of 1.1 million people in 2000.
• Forty seven percent of the population is under 20 years old and sixty six percent is under 30 years of age.

STATE DESCRIPTION

• The Mexican State Guanajuato is located in the central region of Mexico called "El Bajio". It borders with the states of San Luis Potosi to the north, with the state of Queretaro to the east, Michoacan to the south and Jalisco to the west.
• Guanajuato’s major cities are Leon, Irapuato, Celaya, Salamanca, Silao and the state’s capital Guanajuato.
• The population of the state is estimated at 4.5 million inhabitants.-State Government 1999
• Guanajuato has played a key role is the history of Mexico as the birthplace of the independence movement. Traditionally an agricultural and mining region, Guanajuato is now an important industrial state with 73 maquilas employing close to 13 thousand workers.-INEGI 1999

LOCATION

• Leon is located in a flat region in the western part of the state, at an elevation of 5,850 feet and with an average annual precipitation of 24.6 inches.
• The climate is hot and dry with occasional afternoon showers in the summer, and pleasant and mild in the winter.

REGIONAL INFLUENCE

• Founded in 1576, Leon served as the capital of Guanajuato until the Mexican Revolution in 1910.
• Leon is a large size city that has experienced rapid growth in the last ten years; it generates between 28 and 30 percent of Guanajuato’s gross domestic product with 24 percent of the population.
• The city is famous for its shoe and leather tanning industries. Although globalization and NAFTA has put tremendous pressure on Mexico’s domestic footwear companies, more than 100 million pair of shoes are still produced in Leon every year.

PROXIMITY TO KEY CITIES AND SEAPORTS

The Workforce

DEMOGRAPHIC IMPACT

• Industrial activity accounts for 35% of Leon’s economy, 30% commerce, 25% services and the remaining 10% covers agricultural activities and other.

EMPLOYMENT CONSIDERATIONS Click Here To Register

UNEMPLOYMENT RATE and AVAILABILITY of LABOR Click Here To Register

WORKER SKILL LEVEL

• Most companies in Leon compete in the footwear and leather tanning industries; worker skill level for electronics, metal-mechanic and other operations with higher technical content is limited.
• Leon is home to successful maquila operations in apparel manufacture such as Haggar, which employs over 800 workers.

EDUCATION and TRAINING PROGRAMS

Schools in Leon

Source -Anuario Estadistico Guanajuato 1999

Colleges and Universities in Leon

• There are 16 universities with a total enrolment, of 13,927 students in bachelor’s programs and 1,980 graduates in 1999.
• The prestigious Tec de Monterrey has a campus in Leon offering degrees in Industrial Engineering, Business Administration, Accounting and finance and computer science.
• The Universidad Tecnologica de Leon offers associates degrees in Information Technology, Production Process and Marketing.

TURNOVER RATES Click Here To Register

The Operation 

WAGE RATES

Of all of the manufacturing inputs, labor is the only one less expensive in Mexico. Everything else costs more in Mexico than in the United States, from shipping to telecommunications, to energy, to real estate, to the cost of capital. Accurate information on labor rates is therefore of paramount importance to any company considering manufacturing in Mexico.

Wage rates in Mexico are controversial. The government, in conjunction with union representatives and members of the largest industrial organizations, adjust the minimum wage on an annual or semi-annual basis.

There is a minimum wage rate for 88 different "professional classifications" that vary from construction supervisor to shoemaker.

Few workers earn the minimum wage, especially in the export-manufacturing sector. Forty seven percent of employed workers in Mexico earn more than twice the minimum wage, and 11% earn more than five times the minimum wage.

The minimum wage in Mexico is in reality a benchmark or reference wage, used by the government to direct increases in salaries that are congruent with its monetary and fiscal policies.

LABOR COSTS-Rates include all mandatory benefits and payroll taxes

Source Bancomext-1999 Rate $9.40 pesos/US dollar

SALARIES FOR EXECUTIVES AND EMPLOYEES

Rates include all mandatory benefits and payroll taxes

Source Bancomext-1999 Rate $9.00 pesos/US dollar

Note- We believe that actual wage and labor rates are higher in Leon than the information supplied by Bancomext would suggest. Due to the high number of smaller shops in Leon, the statistics may not be representatives of the overall local labor market. Our experience suggests fully loaded maximum hourly rates of $3/hr for skilled workers and $1.60 for unskilled workers

INDUSTRIAL COSTS

Source Mexican Dept. of Energy and Guanajuato State Government

Electricity USD @ 9.00

Costs increase approximately 1% per month

Fossil Fuels USD @ 9.00

Costs increase 1% per month

Water USD @ 9.00

Exchange Rate $9.40 pesos/dollar

INFRASTRUCTURE

• Thirty minutes away from GM’s light truck manufacturing facility located in Silao, Guanajuato.
• Well-designed industrial parks with railroad spur and fiber optic telephone network.
• Excellent access to Queretaro and Mexico City via a four-lane toll highway.
• Rail links with service to San Luis Potosi, Mexico City, Nuevo Laredo, Guadalajara and Nogales.
• Excellent educational facilities.
• Several 4 and 5 star hotels, golf courses, tennis clubs.
• The city is well served by trucking companies making daily trips to the U.S. border cities of Laredo and El Paso, Texas.
• Sixteen public and private hospitals and clinics.
• Twenty minutes away from the Bajio International Airport with daily direct flights to Mexico’s largest cities and several U.S. hubs. Fourteen weekly flights to Los Angeles, and daily flights to Chicago and Houston.
• Several customs brokers have offices in the Leon.

CUSTOMS

The closest fully staffed Mexican customs office is in Queretaro.

TAXES

The state imposes a payroll tax of Click Here To Register

The Support

SERVICE and SUPPORT COMPANIES

Large-scale operations will find a limited number of companies offering support and services, especially for high tech operations. GM’s light truck plant is proof that the area can support large-scale operations.

The Politics

UNIONS

Unionized labor in Leon does not represent a major impediment to new starts or expansion. Every national labor union in Mexico has some representation in Leon, including the CROM, CROC, COR, and of course the largest state-run union, CTM.

POLITICAL INFLUENCES

Guanajuato has been governed by the right-of-center PAN party for the last 12 years. A well-known strategy to raise the standard of living in Guanajuato has been the promotion of foreign investment. Former governor Vicente Fox was often accused of administering in-absentia due to his many trips to the U.S. and Europe to promote his state. The state government is a strong proponent of foreign investment and will assist companies seeking to relocate to the state.

OTHER BIG NAMES

Most of the companies established in Leon supply the domestic market.

ADVANTAGES

• Good quality of life, low crime rates, little pollution and a pleasant climate.
• Centrally located in the Bajio region, a zone that will continue to grow as people leave the chaos and pollution of Mexico City.
• A growing population assures an adequate supply of workers.
• A pro-business state government.

DISADVANTAGES

• Distance from the border will increase support and freight costs.
• Lack of adequate support and service companies for most industries, especially if the maquila operation is to be large or it involves electronics manufacturing or high tech industries.

Leon is located in the center of Mexico with 70% of the country’s population within a 300-mile radius. It has quick access to Celaya, Silao, Queretaro, Aguascalientes and Mexico City.

Four important automobile manufacturers have plants within a one-day trip from Leon, a four-lane highway provides quick access to all locations.

• GM’s light truck assembly plant is just 16 miles away.
• Nissan’s assembly plant in Aguascalientes is 80 miles away.
• Volkswagen’s factory in Puebla is 316 miles away.
• Chrysler’s operation in Saltillo is 393 miles to the north.

Leon is still a shoe-manufacturing town with a few large apparel manufacturers. Large electronics, auto-parts and other metal-mechanic maquilas are not in Leon. The city has a surprisingly low unemployment rate, similar to rates found in the border "boom towns", we believe that a maquila operation which typically pays 16% higher salaries than local firms will be able to successfully recruit employees.