Should your manufacturing platform be in China or Mexico?

There are go-betweens in Dallas who are asking themselves this question.

Many are, as Dallas City Council member Ron Natinsky describes himself, "serial entrepreneurs."

One hallmark of this work is lining up Dallas buyers with foreign manufacturers who can turn out a specific run of clothing or gadgets.

Hands down, China used to win the sourcing game. There are scores of manufacturers ready to produce products to customer specifications, pack and ship them in containers.

Now Mexico is making a play for this work, with custom-made products and overnight delivery – a timeframe that China can't touch.

"You compete with China by offering customers a customized product with very short delivery times – like the Dell computer business model," said Keith Patridge, executive director of the McAllen Economic Development Corporation.

A dozen miles south of McAllen is Reynosa, Mexico. More than 200 companies from around the world have factories in Reynosa, employing 128,000 workers whose average wage is $2.35 an hour.

For labor-intensive goods, U.S. manufacturers can't compete with those wages. Many Asian producers can. But northern Mexico has geography in its favor, as well as a free-trade agreement with the United States that's now 15 years old.

If you have a flat-screen television, chances are it was made in Reynosa. If you have Black & Decker tools or a Bissell vacuum cleaner, they were made in Reynosa.

Nokia and Motorola mobile phones are made there as well.

"The Reynosa telecom companies won't even make a phone until there's an order for it. Then they'll ship it to anywhere in the United States within 24 hours," Patridge said. "Chinese manufacturers can't do that."

Natinsky, who heads the City Council's economic development committee, wants to expand Dallas' ties with Mexico, especially the big industrial center of Monterrey. But after traveling there multiple times for private and city business, he still finds Mexico something of an enigma.

"Mexico could have been our China," he said. "It could have been the low-cost manufacturing platform for the U.S."

Natinsky said automobile parts were the only sector where this succeeded. That business has been devastated by the collapse in new-car sales and the bankruptcies of General Motors and Chrysler.

Natinsky is excited by the prospect of Chinese manufacturers moving some of their operations to Dallas. Several Chinese businessmen come to see city officials every week, he said.

Mexican businessmen? Not so much.

Chinese manufacturers are thinking of moving their parts through Mexican ports to avoid customs and shipping bottlenecks in Los Angeles and Long Beach – although trade has cratered so badly, those ports now have plenty of capacity to spare.

What this tells McAllen's Keith Patridge, however, is that another group of Asian manufacturers will soon discover Reynosa.

Japanese and Korean companies already feed their Reynosa factories with parts shipped through the ports of Lázaro Cárdenas and Manzanillo. With final assembly in Reynosa, all that's left is shipment across the border to Texas and beyond.

If the Chinese come to Reynosa, they would be giving their own answer to where to base a manufacturing platform.