Carlo Orsenigo
Director General
View from the Top

Mix of Engineering and Consulting Services for Automotive Project

Mon, 09/01/2014 - 12:00

Q: What are the main services that CH2M HILL provides to its clients planning on implementing an automotive project in Mexico?

A: Many clients are accustomed to spending a lot towards the end of a project and not so much at the beginning, when it should be the other way around. The conceptual and basic design stage offers the greatest potential to save costs, and it is extremely important when you start development and procurement to already have very welldefined plans in place. The update and adjustment of certain definitions is very expensive. We can get involved with pre-design services, including site selection and due diligence, which are not traditionally associated with the engineering industry. Essentially, we integrate consulting type work with our project services. We are consultants, engineers, and constructors, incorporating only the best parts of each. We can assist with the engineering aspects, construction services, environmental issues, and we can take charge of program management for the whole portfolio, which is what we are doing for the expansion of the Panama Canal.

Q: To what extent does having a developed presence locally give CH2M HILL an extra edge?

A: We have been active in the automotive sector since we came to Mexico, and that presence is now evolving. Our volume is increasing as our industrial activities in this area are gathering steam. A few years ago, industry players were mainly sourcing suppliers that were lower down the chain within Mexico, but there is now a stronger push to try and source more sophisticated capabilities locally. The automotive industry has really changed scale in Mexico in recent years. We have worked on a number of very interesting projects, such as the recent production and design of an OEM plant in Celaya. There is often a perception that it does not really matter where your resources are in today’s globalized world. That is not really true, however, as local capacity is very important. We are lucky in that we have the best of both worlds because we have the support of a highly developed global network and a strong local base. We have been in Mexico for 20 years, which is what gives us deep local market knowledge.

Q: Is your Mexican workforce sufficiently qualified to tackle all of CH2M HILL’s capabilities?

A: We have been working for a number of years to reach the level of talent we have today, and we are very happy with our people. The only real problem is the availability of resources in the longer term. The problem today is not finding the right people, but training them and keeping them. We have 400 engineers that are capable of working on 3D modeling and due diligence. It is only natural that our competitors entering Mexico will want to take those employees from us. This means that we have to create a sort of defensive barrier by paying our employees the right way and creating a culture of pride in working for CH2M HILL. That requires a big effort at all levels of the company. The market will not be able to provide the skillsets that our people have in the required volume, and that is why we need to nurture our own resources. We expect a personnel shortage in the next couple of years, so we want to prepare for that.

Q: Which areas do you see being the most interesting investment destinations over the coming years?

A: The Bajio area is obviously receiving a lot of investment. The border area will always be very active, although recent legislative changes, such as the Fiscal Reform, have slowed down the pace in that area. The security issue is one aspect that is preventing investment in certain areas, and that really needs to be addressed in order to see optimized countrywide development. The area around Lazaro Cardenas is an example of this. Lazaro Cardenas is the largest port in the country so it makes no sense that it is not already more significant from an industrial perspective. Until these issues are addressed, the areas that are able to provide security will continue to receive the bulk of investment. Processes also need to be improved. Permitting, for example, has to become a more straightforward process. We should not be seeing major international companies choosing one location over another based on a factor as simple as the ease of getting the right permits, but that is still happening. Doing business has to be straightforward and the rules of the game need to be much clearer. State laws and federal laws often clash, which needs to be ironed out. Security and regulation issues should no longer be deciding factors for investment.