Arrow and LG are examples of one of several industry sectors performing well in Mexico. Gary Swedback, president of NAI Mexico, says there are other cities where electronics is back in force in the country.

Arrow Electronics moved electronic connector manufacturing to Nogales.

Other robust industrial sectors include aerospace, automotive (see p. 26) and medical devices, he says. /
   Swedback says there was a period of uncertainty with the 2006 elections and the incoming Calderón administration, and many major companies put plans on hold for awhile. But he says that is beginning to change now. /
   "What's shaking out on the backside are several key factors in place in Mexico that are reassuring global investors, especially those from the U.S. and Canada," Swedback says. "Mexico is rich in commodities whether it's agriculture products or oil and gas. That's an economic driver that can't be understated. Corporate users need to be aware that Mexico's natural resources are vast and are not being depleted.
   "There's also the irreversible integration of the North American economy, and we're seeing it on both sides, in Canada and Mexico. It will never go so far as to become an EU- type structure. However, there are meetings going on with the U.S., Canada and the Calderón administration about creating a seamless integration."
   Swedback says another factor to consider is that Mexico has a $1- trillion economy – one of 13 countries in the world to reach that level – and has a population of 100 million.
   "That's like being a 40- 40 player in baseball," he says, referring to that rare player who can hit 40 home runs and steal 40 bases. "That's easy math, $10,000 per capita."
   Swedback says most global companies in the U.S. and Canada cannot grow their market share domestically any longer. "That's very evident going into 2007," he says. "There are examples in every sector where market share has been eroded. As the manufacturing consolidation continues, when site selection decisions are being made, the Mexico option is the next option. The options used to be far shore and near shore. Now, the term is 'best shore' for most users, and Mexico fits that profile."
   Swedback says Mexico is becoming a new gateway to North American markets through a developing transportation corridor aligned with the country's Pacific Coast ports of Manzanillo and Lazaro Cardenas. Mexico's location offers an overnight advantage for logistics to U.S. markets versus China, he says.