Aerospace Industry in Mexico
According to the International Trade Administration (ITA), the aerospace industry in Mexico has played an integral part in Mexico’s economic growth for decades. What is aerospace? How long has the aerospace industry played a role in Mexico’s economic development? Why is Mexico an ideal location for the aerospace industry? And, finally, what certifications authorize a manufacturing company in Mexico to work on aerospace projects?
What Is Aerospace?
Aerospace is a term used to describe both the earth’s atmosphere and outer space. The aerospace industry is tasked with designing, testing, and managing the manufacturing of aircraft, satellites, spacecraft, and missiles. Sectors of the aerospace industry include Industrial, Commercial, Private, and Defense Aviation.
Aerospace engineers design, test, and manage the manufacturing of missiles, spacecraft, satellites, and aircraft. They are also responsible for testing prototypes created to support space exploration, aviation, and national defense systems.
According to CareerExplore.com, “Aerospace engineers can specialize in a specific type of aerospace product, such as…spacecraft, helicopters, or commercial aircraft. Or they may choose to specialize in specific areas, such as instrumentation and communication, navigation and control, structural design, guidance, or production methods.”
Aerospace Industry in Mexico
The aerospace industry is one of Mexico’s leading business divisions resulting in job growth, infrastructure development, and a growing interest from foreign investors. A recent report released by the ITA stated that 3.6 billion dollars (USD) worth of aerospace products and services were exported from Mexico in 2020. Those products included fuselages, electrical wiring systems, and jet turbines.
The ITA highlights that Baja, California (Tijuana and Mexicali) and Queretaro are aerospace clusters for aerospace manufacturing in Mexico. However, there are also facilities in other parts of Mexico that exemplify the best in what draws foreign companies to Mexico’s aerospace manufacturing firms.
According to the Mexican Aerospace Industry Federation (FEMIA), the aerospace industry in Mexico grew from 100 manufacturing firms and organizations in 2004 to an estimated 360 by mid-2019. This growth is expected to continue as more foreign manufactures discover the unmatched benefits of choosing Mexico to meet their aerospace industry needs.
The state of Baja, California (Tijuana and Mexicali) has the largest concentration of aerospace companies with more than 82 aerospace manufacturing companies. This cluster of aerospace manufacturing companies provides a healthy supply chain throughout the world.
The United States receives two-thirds of its aerospace exports from Baja, California. Some of the other countries that benefit from aerospace manufacturing in Mexico include France, Germany, Canada, and England.
Some well-known manufacturing companies that rely on the aerospace industry in Mexico include Honeywell, Airbus, Rockwell Collins, Rolls Royce, and The Boeing Company.
What Is an Aerospace Cluster?
Aerospace clusters are defined as manufacturers who position themselves as a magnet as parts supplier; logistics; training; support organizations; and much more! The aerospace manufacturing industry in Mexico is a leader in creating aerospace clusters that meet the needs of the international aerospace industry.
The aerospace industry in Mexico has five key clusters: Sonora, Baja California, Chihuahua, Nuevo Leon, and Queretaro.
One aerospace sector that benefits from Mexico’s aerospace clusters is the automotive parts manufacturing companies. Research shows that an estimated 53.2% of the production of these parts happens in one of Mexico’s aerospace clusters.
Why does the international aerospace industry, including the United States, rely on Mexico to meet their aerospace production needs?
Expanding Trade Agreements
In 2019, the North American Free Trade Agreement (NAFTA) ended. The transition to the United States-Mexico-Canada Agreement (USMCA) presented manufacturers with new opportunities. This new trade agreement opened the door to new aerospace manufacturing growth opportunities in Mexico. However, some manufacturers might ask: What sets Mexico apart from other aerospace manufacturing destinations?
Six Benefits to Aerospace Manufacturing in Mexico
- Lower loaded labor rates
- Access to contract manufacturing shelter and sub-contracting companies
- Superior access to skilled labor
- Reduced travel expenses for U.S.-based employees
- English-speaking management and engineers
- Simplified, less expensive shipping through ports of entry
Lowering the Cost
Mexico has emerged as a leader in the aerospace manufacturing sector because Mexico’s labor costs are 40-50% lower than in the U.S. Even skilled laborers earn less in Mexico. As wages in Mexico grow, evidence shows that productivity also increases. This ratio means companies can continue to keep loaded labor rates low while building revenue.
Aerospace Shelter & Sub-Contracting Companies in Mexico
For over 50 years, Mexico’s shelter services have simplified the process of moving a foreign company’s aerospace operations to Mexico. Providing a turnkey, start-up approach to manufacturing is only one of the benefits. Under a shelter company, you maintain all intellectual property rights, and you are shielded from liability.
This protection means that foreign companies are not vulnerable to Mexico’s legal system. In other words, a shelter company focuses on the administrative and legal logistics of a business, while the foreign company focuses on its core goal: Aerospace manufacturing. The production value of the product remains high while decreasing the operating costs.
Using a shelter company in Mexico is not a foreign company’s only option. Mexico provides excellent sub-contracting opportunities as well. By utilizing Mexico’s success as a sub-contractor, you can reap the benefits of Mexico’s skilled labor force while completing the bulk of the project in the United States. For example, BF&S Manufacturing’s quality certifications make us an ideal partner for sub-contracting products like wire harnesses, small electric motors, cargo doors, and engine parts.
Access to Skilled Labor
To work on an aerospace project, the manufacturing company in Mexico must meet international quality control standards. For example, BF&S Manufacturing is AS-9100D certified. This certification qualifies them to work on aerospace projects in Mexico. To maintain their AS-9100D accreditation, they are required to maintain the highest standards in manufacturing. They meet those standards in both the materials they use and the assembly of the finished product.
Reduced Travel Expenses
The United States’ proximity to the aerospace industry in Mexico means you will reduce the cost of lengthy international travel. Your executives will be able to spend more time in their offices. When you can’t be on-site, a knowledgeable workforce will provide clear information.
Unlike other parts of the world, aerospace manufacturing in Mexico is known for employing management teams and engineers that are fluid English-speakers. This unparalleled benefit reduces disruptions to aerospace supply chains, cuts the resulting production costs that can be passed onto customers, and saves time.
Fewer Headaches at the Border
Nothing is worse than having an item stuck in Customs, especially if customers do not understand that some things are out of a company’s control. The logistics of transporting items through Mexico’s ports are less complicated than other contract manufacturing options. Once again, this benefit of manufacturing in Mexico ensures that not only does your supply chain flow smoothly, but your customers stay happy.
The BF&S Manufacturing Difference
When considering moving your aerospace manufacturing sector to Mexico, it is essential to note that BF&S Manufacturing is a United States-based company. All contracts are made with a U.S. company and not with a foreign entity. Your legal options fall under U.S. law. We also use American-based management practices in all our Mexican-based manufacturing facilities. These standards serve as a familiar benchmark for U.S. executives and allow for a smooth transition from the United States to BF&S Manufacturing’s location in Mexico. BF&S Manufacturing’s status as one of the few manufacturers in Mexico that can offer both sub-contracting and shelter company support makes us an excellent choice for your manufacturing needs.
As stated earlier, BF&S Manufacturing is AS-9100D certified. This certification qualifies us to work on aerospace projects in Mexico. To maintain our AS-9100D accreditation, we are required to maintain the highest standards in manufacturing. We meet those standards in both the materials we use and the assembly of the finished product.
If you want to lower your loaded labor rates, while increasing production in the aerospace industry (or any other), BF&S Manufacturing has a solution for you. Call or e-mail us today to discover the BF&S Manufacturing difference for yourself.