The change meant the company had to move the art it was making for IKEA to a lower-cost region to survive. Initially, Mr. Wine considered China. However, with a unique patented product, he was concerned about manufacturing in a country with a troubled record of protecting intellectual property. Additionally, he felt the inexpensive labour force was better at producing commodity products than ones requiring an exacting process. As well, China was halfway around the world.

John Hasting, the president of Brushstrokes, suggested Mexico. In his days at Hallmark, the company had hired Texas-based American Industries International Group to set up a plant in Chihuahua in the mid-1980s, which had been a great success. After a meeting and a visit to Mexico, Mr. Wine decided the location was right.

Although unskilled labour is more expensive than in China, at about $2.90 an hour it is five to 10 times cheaper than in Canada, once you add in factors such as benefits. "It's also a very productive workforce," Mr. Wine says, adding he was more confident his intellectual property would be protected in Mexico and the facility would be much closer to home and to the U.S. market, where Brushstrokes also sells art.

Mr. Wine hired American Industries to set up manufacturing facilities in the Juarez region of Mexico, leasing one of the buildings American Industries owns to produce 40,000 pieces of art a month. Within three months, Brushstrokes was saving 40% to 50% in operational costs. "For us, the labour is a huge savings."

American Industries owns and leases more than seven million square feet of industrial space. Brushstrokes started out leasing 30,000 square feet of space and, in August, 2005, moved up to a 72,000-sq.-ft. facility. However, American Industries also offers small and medium-sized businesses space in multi-tenant facilities, where businesses can share building and operation costs while operating independently.

Mr. Wine hired a plant manager in the United States who drives across the border to work. As well, Mr. Hasting travels to Mexico each every week and Mr. Wine visits the plant every few months.

Inventory is delivered in a timely manner. Trucks drive the art to either Toronto or a U.S. location, from which it is shipped overseas: from Houston to Europe, and Long Beach, Calif. to Asia.

Just like the old Remington television ad, Mr. Wine was so impressed with American Industries service he bought the company. Or rather, in September, 2006, he established a Canadian subsidiary called North American Industries to encourage Canadian companies to relocate manufacturing facilities to Mexico to achieve similar cost savings.

He is now in various stages of negotiations with five or six companies to set up shop in Mexico through North American Industries. Although the parent company has about 80 U.S. clients, including Hallmark, Kodak, General Electric, Sony and Epson, Mr. Wine admits that for Canadians, Mexico requires a paradigm shift. China, he says, is "the flavour of the decade."

Nevertheless, there is a Canadian presence in Mexico. Companies such as Celestica, Magna International, Linamar and Bombardier all have plants in the country, and Mr. Wine is confident some of his prospects will come on board by the end of the year.

Once a company signs on, North American Industries will tap into the resources of the parent company, which facilitates the set-up process. If a client wishes, it can sign up for the "shelter" program, where American Industries will assist with customs, human resources, financial issues, legal services, environmental permits and other related services.
An employee from American Industries is located at the Brushstrokes plant, for example. "When we were having duty issues, that person solved the problem for us," Mr. Wine says.

Client companies often start out with the leasing and shelter services and once they are comfortable operating in Mexico after a few years, change to a simple leasing agreement. It takes just 45 business days to get a client's manufacturing facility up and running in Mexico. The Canadian company maintains control over its core business operations and has final say in hiring.

And what of the thorny issue of taking jobs out of Canada? Mr. Wine agrees but adds, "By doing that I'm actually saving about 50 jobs in Canada. The move to Mexico allowed me to secure those jobs that may not have been there if we couldn't continue to be competitive."

Additionally, this successful manufacturing model has allowed Brushstrokes to expand and take on Target as a client. That new business will require additional administration and marketing support, which means jobs for Canadians. entrepreneur@nationalpost.com © National Post 2007