Delphi Closing Mexico Plant

Automotive supplier Delphi Corp. has announced it will close its Ciudad Delicias plant later this year due to high costs and related labor problems. The plant, located in the northern Mexican state of Chihuahua, produces wiring for the auto industry.

According to a report by Reuters, Delphi’s decision to close the plant came as a result of a failure to reach an agreement with the union and workers, who were demanding a productivity bonus, as well as other cost-related issues.

“The total costs of this plant, including labor, were above the market average,” said Delphi spokeswoman, Mary McCahon.

Delphi produces about one-third of its output in Mexico, where it employs 70,000 people. Recently, more companies have complained about increasing costs of manufacturing in Mexico; especially the higher costs to transport goods into the U.S., the destination of 80% of the goods made there.