David Berruecos
Plant Manager
Switch Luz/Electro-Mech Components
/
Insight

Stability the Name of the Game

Fri, 12/01/2017 - 14:04

Stability is the name of the game in the switch segment of the aerospace industry, where volumes are low and quality is everything, says David Berruecos, Plant Manager at Switch Luz/Electro-Mech Components.

Switch Luz, the sister company in Tijuana of Electro-Mech Components, has manufactured switches for major OEMs such as Boeing and Embraer for over 20 years. Founded in 1963, the company participates in the avionics sector by manufacturing electronic equipment to be fitted in an aircraft. “Our push button switches have not changed much over the past 20 years. There are over 20,000 airplanes flying at any time so it is not feasible to change the switches in all of them as it would be prohibitively expensive. We believe that our switches will remain in use for a long time but we also have an R&D division that works closely with the sector. The aerospace industry is so closely interconnected that it is not possible to change an individual part without alerting all partners.”

That does not mean production is stagnating. In 2016, Switch Luz began distributing switches for Airbus. Although the company started with small volumes, Berruecos is certain that once the OEM sees the quality and value of Switch Luz-Electro Mech Components products, orders will increase. This new switch is already being used in the Airbus A350. “Volumes are still small because Airbus manufactures about 450 aircraft per year in different models, so not that many are required. But we consider this a good start.”

"Switch Luz manages about 670 different products, all of which are sold in small numbers," Berruecos says. “All switches are exclusively made for a specific function of the aircraft. We have the capabilities to manufacture small, medium and large volumes with the same standards of quality and delivery times.”

The aerospace sector is growing in two ways, Berruecos continues. The first relates to the increased number of aircraft orders and the second is aircraft repairs and maintenance as a result of this larger number of planes. These two areas allow Switch Luz to expand at a stable and sustainable pace. “The good thing about working for the aerospace industry is that one can always continue growing if quality standards are met. A recall in the aerospace sector is unheard of. An aircraft might involve millions of pieces and all of them must work to perfection.”

Switch Luz has prevailed in this market not only because of its flexibility and capabilities, but also due to its ability to offer lower costs thanks to its location in Baja California. “The global aerospace sector is trying to reduce costs and under these circumstances, bringing manufacturing into Mexico is an excellent opportunity to take advantage of the lower labor costs and high technical capabilities,” says Berruecos. "All companies in the market are constantly on the lookout for competitive prices," he says, which is allowing the sector to grow in the state and the country. “Mexico’s central region is developing a strong aerospace industry supported by the federal government, but northern Mexico represents the global, strong Mexico. The latter region hosts the vast majority of exporting companies and the largest number of aerospace companies.”

For the sector to continue growing, Berruecos says the federal government should prioritize the industry in a similar way that it did the automotive sector. “The industry is still facing many challenges, including an overwhelming amount of reporting for imports and exports and finding appropriate qualified personnel. The strict regulations involved in the aerospace sector require that companies attract not only technicians but engineers, which raises salaries and overall costs. This situation is forcing companies to optimize their processes and to do more with less. Component costs are not dropping in the short term.”

While Berruecos expects that 2017 and 2018 will be years of stability for aerospace, he warns that changes are coming to the market. New players from China and Russia are entering the market and that will affect the two major OEMs. Other companies that are not specialized in aircraft are also entering the sector, such as Mitsubishi, which is producing 90-seat planes. These will be popular in Asia because they will increase connectivity within China. All players must be attentive to the changes in the market.”