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Construction industry, say hello to your new trend: Outsourcing

Date Posted: March 19 2004

Outsourcing jobs in the U.S. construction industry is now officially a trend.

The Wall Street Journal, which pays attention to these things, said so earlier this month. Under the headline, “Salt Lake City’s new library shows U.S. construction jobs are also shifting abroad,” the article explained how it is now feasible – and apparently cost-effective – to manufacture sections of the exterior of a building in Mexico and ship it across the border for re-assembly at U.S. job site.

The Journal article described how some 2,500 concrete panels were recently made in Mexico City, then shipped 2,350 miles north via 140 flatbed trucks to Salt Lake City.

“Pretecsa’s (the Mexican manufacturer of the panels) low-cost labor made up for the higher shipping costs, and they came in the cheapest,” library project manager Steve Crane told the Journal. Pretecsa underbid the competition by $1 million on the $2.5 million job. A U.S. labor force on that project would alone have cost $3 million, the Journal estimated.

Local construction workers did the assembly on the $65 million Salt Lake City library – but that’s not always the case. “Using Mexican workers at the source is an obvious attraction,” the Journal said, adding that 300 Mexican laborers were imported to pour concrete silos at a recent job in Idaho Falls.

“The economics of building offshore have to do mainly with the high cost of skilled labor in the U.S.,” said the Journal, “where workers who pour concrete ‘slip forms’ rarely make less than $20 an hour…. Migrant work gangs comprised of green-card-holding Mexicans have become increasingly common on large construction sites, especially in right-to-work states where unions are weak.”

Utah may be across the continent, but Pretesca also wants to expand it range of operations: the Journal said the company plans to bid on making concrete panels for a hospital in Dearborn.