After struggling to find a way to ship supplies to the Asian country in less than a month, the Wichita, Kan.-based producer of light airplanes discovered a better solution just across the border: Mexico.

"Shipping to and from Mexico is easier and faster because it's over land rather than by sea," Cessna Chief Executive Officer Jack Pelton says. "It provides a way for Cessna to become more competitive as we deal with the challenge of the current economic situation."

Now, Cessna is completing a fourth expansion, in the city of Chihuahua, that will bring factory floor space to 10 times its initial size.

Cessna has plenty of company. Last year when Benton Harbor, Mich.-based Whirlpool Corp. decided to cut production because of flagging consumer demand, it closed a plant in Evansville, Ind., and shifted more work to Monterrey. Polaris Industries said in May it picked Monterrey to build all-terrain vehicles and ship them to the southern United States. The Medina, Minn.-based company is closing a factory in Osceola, Wis.

Singapore-based Flextronics International, which manufactures mobile phones, auto parts and medical products for other companies, is looking more at Mexico as the wage gap with China closes, Chief Executive Officer Michael McNamara says.

Wages similar

After years of losing chunks of the U.S. market to China, Mexico has begun taking some of it back. Mexico's share of the products the U.S. imported for the first five months of the year rose more than a percentage point to 12.3 percent, while China's position dropped to 17.3 percent from 18.6 percent.

Average Chinese manufacturing wages at just under $2 an hour are only 14 percent less than Mexican salaries as of this year, according to estimates by Mexico's Finance Ministry. Salaries south of the border were more than three times higher in 2002.

From 2002 to 2008, the last full year of official wage data, Chinese manufacturing salaries in dollars jumped 2.6 times, while Mexican wages rose only 7.5 percent in dollars from 2002 to 2009.

"Every year that goes by, we're going to see Mexico becoming more and more attractive as an alternative to China," Flextronics CEO McNamara said. He also said companies would move factories to Eastern Europe.

Foreign companies are brushing aside concerns about drug-related violence. Since 2006, 28,000 people have been killed as narcotics cartels fight one another and police to grab a larger share of $39 billion in drug sales annually to the United States. Companies are enticed by a peso that has weakened 21 percent against the dollar since 2008.

Much English spoken

U.S. manufacturers like the proximity of Mexico and the fact that the country has few labor strikes, shares time zones with the U.S. and has cultural similarities with the rest of North America, with most Mexican executives and middle managers able to speak English.

Beginning with the North American Free Trade Agreement in 1994, Mexico has courted foreign investors with lower tariffs and legal protections. The country now has trade pacts with more than 30 nations, such as the members of the European Union, Colombia, Israel and Japan.

Mexico's dependence on its northern neighbor makes it vulnerable if the U.S. recovery were to sputter, says Jonathan Heath, a Mexico City-based economist with the Center for Strategic and International Studies in Washington.

"Manufacturing is the only engine that is working now for the Mexican economy," he says.

Mexico's other economic drivers - oil, tourism, remittances and consumer purchases - are struggling and may not recover soon, Heath says. Oil exports have dropped by almost half since 2006, to 1.11 million barrels a day in June, keeping the country from cashing in on higher prices.

Auto industry as example

The auto industry is an example of how Mexico has gained favor as a manufacturing base for North America, says Jimena Zuniga, a New York-based Latin American economist with Barclays. Chrysler, Ford Motor Co. and General Motors Co. have increased production in Mexico as they curbed output and shut factories in the U.S.

In the first six months of 2010, Mexico exported 887,872 vehicles, outpacing the 836,202 during the same period in 2008 and posting an 83 percent increase since 2009. In the U.S., annual vehicle sales were as high as 15.4 million in January 2008, compared with 10.8 million in January 2010.

Mexico has few strikes, which is proving crucial as China struggles with labor unrest, says Luis Aguirre, chief of Mexico operations for San Jose, Calif.-based Sanmina-SCI Corp., which makes electronics, auto parts, aerospace parts and medical equipment for other companies.

While drug violence may dominate the headlines, Mexico is quietly reclaiming its place as a location where U.S. companies are finding low wages, less expensive shipping costs and reasonable tariffs - at an address a lot closer to home than China.