Municipal Government, National

California Company Explains Why It Moved Jobs to Mexico

January 3, 2017 
By Steven Wishnia and Neal Tepel

Chowchilla, CA – Last August, Brake Parts Inc. closed its brake-caliper factory in this Central Valley town of 18,000 and moved production to Nuevo Laredo, Mexico, costing 280 workers their jobs.

“The workforce we had in Chowchilla was a great workforce, and it would have been a hell of a lot easier to just leave it there, I’ll tell you that,” Randy Clausen, vice president for global human resources at the Illinois-based company, told the Los Angeles Times. But because cheaper labor in Mexico enabled competitors to sell their products for lower prices, he said, it was as if the company was “taping dollar bills to every product sold at retail.” The city of Chowchilla offered Brake Parts incentives to stay worth about $325,000 over five years, said City Administrator Brian Haddix, but “it was not enough” to overcome the pay differential. “There’s no way that U.S. workers are going to work for $3.50 or $4 an hour, and that’s the reality of the situation,” said Clausen. The company no longer does any domestic manufacturing. Read more

January 2, 2017

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