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Why Mexico Is the Right Choice for Aerospace Operations

By Carlos Robles - AMBE Engineering
President and Head of Aerospace


By Carlos Robles | Vice President, Central Region of the Mexican Federation of the Aerospace Industry (FEMIA) - Fri, 04/28/2023 - 13:05

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This month, Mexico will host FAMEX, the biggest aerospace trade show in the Americas. This year, France is the country  guest of honor and as in past editions, there will be companies from all around the globe. North America, of course, will have a big representation with all the important companies from  the region present. This is the fifth edition of the bi-yearly event, which has continued to grow, even through the pandemic. Without a doubt, the teamwork between the Mexican Air Force, FEMIA and the Mexican clusters and companies have helped make the event the biggest in the Americas. FAMEX is the fuel, however, the Mexican manufacturing and services ecosystem have also helped as the spark to ignite and place Mexico in the Top 10 of the global aerospace sector. 

Why Mexico?

The world is facing continued inflationary pressures with still rising interest rates and tightening credit markets, which along with profit and cash flow pressures are increasing the risk of financial distress in manufacturing operations. In such an environment, it makes sense to have a regionalized supply chain that is not only capable of delivering quality and on time, but with the characteristic of being predictable. Mexico provides not only that, but offers an always growing set of processes, capabilities and certifications that are currently attracting new operations and contracts. In the last six months, I have personally seen more companies either establishing operations, developing suppliers and transferring operations or reopening business cases for growth in the country than in the last three years. I can tell by direct experience that big and positive announcements are coming between now and the summer., with new companies, new business, new suppliers needed and new projects in Mexico. 

There are many positives in the Mexican aerospace manufacturing environment. We act as a team. That is easy to say, hard to find. We have learned to collaborate to provide a solid offer to manufacture highly engineered components with a large quantity and complexity of processes. We understood many years ago that this is a team game, and nobody can be successful playing on their own. We turned one of our weaknesses into a strength. There is a mature and integrated supply chain ready to find ways to make things happen. The variety of processes is big enough to be appealing for OEMs and big Tier 1s while still at a size that allows the players to know how and where to connect the dots. That has made Mexican operations a part of all major aerospace programs currently in the market, and with an important contribution. 

Last year, exports rose approximately 20% from previous years and with most commercial programs increasing their delivery rates, we have certainty in believing that the trend will at least be maintained for the coming years. On one side, it is the result of the good quality of components guaranteed and delivered. The resilience of both the manufacturing and economic performance of operations in the country has been demonstrated even in negative economic cycles. It is also important to mention that Mexico has diversified its  export destinations. Fifteen years ago, we were sending more than 90% of the parts produced to the US. Today, 25% of that number goes to  different countries. That is important as it diversifies the risk, reduces dependency on a single economy and increases the leverage of the effects of a true economy of scale. With that we have better control of cash flows, sustained margins, different sources for investment and credit and some stability in an unstable environment of its own. It also adds some ratings in terms of quality and confidence in the operations performed locally. Something we need to be proud of as well is the fact that in the last year we saw a couple of Mexican capital operations opening facilities in Europe and the Middle East to locally serve their customers. 

Is Everything Perfect in Mexico?

By far, NO. There are many challenges, but we know them and have a mindset to push things  forward. Onechallenge is our human resources and second is vertical integration, among many others. In most countries, shortages of skilled and highly technical resources remain. We have a lot of young people eager to join the industry. We need to keep working on improving our training programs. It has taken us too long to work toward common objectives in education, but I have examples on how universities and technical education centers are willing to listen to companies, learn from more experienced schools around the globe and spur state governments into action to support the growth in demand for specialized resources. We still have a positive demographic landscape, which will not last forever, so this is the last call to make it work in our favor. 

Photo by:   Carlos Robles

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