Everything That Has to Be True Before You Build in Mexico

Every truck in this line represents a decision made eighteen months ago.

The announcement is the easy part

I have been in the room for the announcement more times than I can count. The press release goes out, the governor shows up, somebody holds a pair of oversized scissors, and there is a rendering of a plant that does not exist yet. Everyone shakes hands. The story runs the next morning.

Then, usually somewhere around month eighteen, I get a different kind of call.

The plant is behind schedule. The certification did not come through. The technical hires never materialized and the ones they found are being poached every ninety days. There is a shipment sitting at the border and nobody in the company can explain why. The person on the phone is not asking whether Mexico was the right decision. They are asking why nobody told them what that decision would actually require.

Nobody told them because the advice is fragmented. The site selection consultant does not think about rules of origin. The trade attorney does not think about workforce. The security firm has never met the logistics provider. Each one is competent inside their box, and the failures happen in the space between the boxes.

I have spent my career in that space. I grew up on the border and became the youngest mayor in America at 22 in Nogales, Arizona. I ran the Arizona Department of Commerce, recruiting the investment. Then I served as Chief of Staff at U.S. Customs and Border Protection, where I was responsible for the agency that decides whether your shipment moves or sits. Today I run a cross border advisory firm and I sit on the other side of that table, helping companies build.

From all three chairs, I have learned that the same seven questions determine whether a cross border operation works. Most companies answer two of them thoroughly and assume the rest will sort themselves out.

They do not sort themselves out. Here is the whole list.

One thing before the list. These questions are not a gate you pass through once. If you are already operating on either side of the border, you are still answering all seven, every quarter. You just answered them quickly a few years ago and are now living inside those answers. If you are an investor or a family office looking at a deal, these are the seven things the deck will not tell you, and the gaps in it are usually in the same places. Same list, different chair.

The seven questions

1. Where should we build, and does the investment case survive contact with reality?

The corridor matters more than the country. A plant in Sonora and a plant in the Bajío are not the same investment, and neither one resembles an operation in Yucatán. Different labor markets, different infrastructure, different border crossing, different governor.

The incentive package is the least important variable in this decision and it is the one that gets the most attention, because it is the one with a number attached.

2. Can we legally do this, and what is our exposure?

Rules of origin are not a paperwork problem. They are a design problem. By the time your legal team sees the bill of materials, the engineering is locked and the qualifying content is whatever it is.

The same applies to restricted supplier rules. Most manufacturers I talk to have exposure they cannot see, sitting two or three tiers down in a supply base they have never mapped. It is not visible until somebody asks, and by then the answer is expensive.

3. Can we staff it with people who can actually run it?

This is the question that quietly kills more projects than any other. Mexico produces enormous technical talent. It does not automatically produce it in the specific place you built, with the specific certification your process requires, at the moment you need them.

There is a version of this problem playing out in Phoenix right now. Enormous semiconductor investment, real workforce constraints, and a deep pool of technical capacity a few hours south that almost nobody has built a proper pipeline to. Strengthening Mexico's semiconductor capability is not a favor to Mexico. It is how the Arizona ecosystem gets staffed.

4. Can we keep the site, the people, and the data secure?

Physical security gets attention because it is visible. The exposure people miss is digital. Your Mexico facility is on your network, and in most companies I have seen, the security team headquartered in the United States has never assessed it, never been there, and does not model it as part of the attack surface.

Cargo security is a related blind spot. Theft in transit is a solved problem technically and an unsolved problem institutionally, which means it stays expensive.

5. Can we move goods across without losing the margin?

Everything upstream of this question assumes the border works. Border throughput is not a constant. It changes with policy, with staffing, with the season, with a single directive issued the night before.

A margin model built on an average crossing time will be wrong in exactly the weeks it matters most.

6. Can we source the inputs the product depends on?

For a growing set of industries, the constraint is no longer assembly. It is the material. Processing capacity for critical minerals is concentrated far from North America, and no amount of nearshored assembly solves an input you cannot get.

This is why I have spent real time on domestic processing. Building the plant close to the customer means very little if the thing that goes into it crosses an ocean and a geopolitical fault line first.

7. Will politics on either side blow this up?

Two capitals, two calendars, two sets of incentives, and one operation exposed to both. Trade policy shifts, security dynamics evolve, administrations change, and priorities move with them.

The companies that handle this well are not the ones with the best predictions. They are the ones who built optionality into the plan before they needed it.

The single most consequential person in your supply chain is someone you will never meet. It is the officer at the primary booth deciding how to classify your shipment. That determination gets made in about the time it takes to read this paragraph, and it can cost you more than the incentive package you spent six months negotiating. I ran the agency that makes those calls. I can tell you that almost no boardroom financial model has a line for it.

Why the order matters

These questions are sequential, and companies routinely answer them out of order.

They pick a site before they understand their compliance exposure, then discover the location makes qualifying content harder. They finalize the design before they check the supply base, then find a restricted component welded into the architecture. They build the facility before they map the labor market, then spend two years importing expertise that was supposed to be local.

Answering them in order costs a fraction of what it costs to answer them in the wrong order and repair the consequences. That is the entire value proposition, and it is not complicated. It is just rarely done, because almost nobody is positioned to see all seven at once.

The bigger picture

Mexico is now the largest trading partner of the United States. That is not a trend anymore, it is the structure of the North American economy. And yet a striking number of companies still plan their Mexican operations the way they once planned an offshore facility, as a distant low cost site to be managed at arm's length.

It is not that. It is an extension of a domestic operation across a line that happens to have a customs regime, a different legal system, and its own politics running through it. Treating it as anything else is the root of most of the failures I have watched.

I built Intermestic Partners in 2011 to work in exactly that space, and I have spent the years since as an international business advisory firm focused on cross border trade and development, working with leading national and international companies on the questions above. Not one of them at a time. All seven, in order.

If you are already there

Plenty of companies reading this are not deciding anything. They built the plant three years ago and something is not working. Margin is off, staff will not stay, shipments get held, and the theory about why has already been wrong twice.

The seven questions still apply, but they get used differently. You are not answering them, you are working backward from a symptom to find which one got answered too fast. That is a different exercise and I have written it up separately as a companion to this piece.

Where to start

If you are considering a move, expanding an operation already running, repairing one that is not performing the way the model said it would, or evaluating somebody else's deal, start by answering the seven questions honestly. Write down which ones you can answer with real confidence today.

Most leadership teams find they can answer two. Occasionally three. That gap is not a failure of management. It is a failure of how the advice in this market is organized, and it is fixable.

If you want a straight assessment of where your operation actually stands across all seven, or an independent read on a deal somebody has put in front of you, reach out to me at Intermestic Partners. There is no substitute for having someone in the room who has sat on the government side of the table, the state investment side, and the company side. I have sat in all three, and I am glad to put that to work on unlocking the full potential of North American leadership for your business.

Marco