Mexico Workers Gear Up For High Tech Manufacturing

Feeling the pitfalls of globalization recently, Mexico may be redeemed by embracing US aerospace manufacturing.

Mexican officials are turning to the North American aerospace industry with big names in aerospace such as Goodrich Corp., and Canada's Bombardier Inc. Both companies have set up facilities there with hopes of bolstering the Mexican economy, according to the Wall Street Journal.

Mexico has tried to help companies wishing to move south by lifting import duties and negotiating bilateral agreements with the Federal Aviation Administration. North American aerospace giants consider the nation's proximity to be assets, just when delivery deadlines are looming to their new aircraft customers. Officials are also impressed by Mexico’s pool of talent, and workforce.

Should Mexico demonstrate the skill learned in the automotive industry -- which could be learned and shifted to high-tech industry -- the country might rebound.

Eager to use the North American Free Trade Agreement (NAFTA), American manufacturers -- eager to cut costs -- sped to Mexico in the early 1990s.

Under NAFTA, the number of Mexicans employed by maquiladoras -- plants that assemble and export goods made from imported parts -- doubled to more than a million by 1999, making Mexico a top producer of garments, auto parts and electronics.

Recently, Asian factories -- with unlimited workers -- have lured business from Mexico.

Mexico's biggest advantage may be its location. In the past aerospace companies farmed out assemblies to far away places. The choice breaks down to waiting weeks for delivery by ship or paying a premium for air cargo.

The demand for new jetliners and other aircraft are now at record highs, just as companies are under intense pressure to cut shipping time and increase production.

Some US aerospace companies have built up considerable capacity in Mexico to feed the industry's production hub in Southern California. Last year, Mexico dropped all import duties on aeronautic components.

"It's something we never did for garments or automotive parts or electronics," says Eduardo Solís Sánchez, investment-promotions director for Mexico's Economy Secretariat. He calculates nearly $1.2 billion has been invested in Mexico's aerospace sector since 2006.

In September, Mexico terminated a four-year crusade to forge a bilateral aviation-safety agreement with the US Federal Aviation Administration.

The agreement will remove barriers for an industry eager to outsource production to Mexico, and contains provisions that will let manufacturers certify and ship components directly from Mexican factories, bypassing US safety checks.

Last year, Mexico exported less than 2% of the $25 billion in parts imported by the US aerospace industry, that number is expected to increase along with the type of items manufactured there.

Only five years ago, workers were weaving wire bundles for electrical systems; today, Mexican workers are producing complete fuselages and landing-gear systems, and plan to export finished airplanes to Bombardier by 2012.

In the past the Querétaro region has suffered with a downturn similar to Detroit. General Electric Co. and a Mexican partner are developing a $100 million commercial "aerospace cluster" there, complete with a training school on land donated by the government.

Bombardier, which will be housed in the area, expects to pour $250 million into the site over the next 10 years with a goal of eventually assembling complete commuter jets.

Components for Bombardier's new 50-seat Challenger jet have been relocated to Querétaro from places such as Japan, Taiwan and Belfast, Northern Ireland, according to Consultant Luc Beaudoin, director of the Everest Group.

But how this will sit with US labor unions will eventually come to play in Mexico's aerospace future.

"In aerospace, we're not building kites," said Mark Blondin, an aerospace coordinator with the International Association of Machinists and Aerospace Workers. "Long term, workers in Mexico could become highly skilled, but you don't get there overnight."

FMI: http://borderassembly.com/mexico-manufacturing.html, www.aerospace-technology.com/industry/mexico.html