A rising aerospace manufacturing powerhouse may not be the first thing many people think of when they think of Mexico, but one day this may change. Several Mexican cities, most prominently Chihuahua City, have developed a rapidly growing stake in the high-tech world of aerospace manufacturing. Chihuahua has become home to 36 new aerospace plants since 2007 as more of the world’s industry leaders have begun to take advantage of region’s low costs, location and skilled pool of workers.
During times of global financial downturn, companies look to find ways to reduce costs without sacrificing the quality of their goods. This has proven to be a real advantage for areas like Chihuahua. As a recent article in the Washington Times explains, the average cost of manufacturing labor in the region is around $6 dollars an hour, which has driven companies such as Cessna, Hawker Beechcraft, and Manoir Aerospace to open facilities in the city. As Nicolas Maillard, the director of the French-owned company explains, “The real advantage is the cost of labor. In France, labor would account for about 30 percent of the cost of production on an item like this. Here, it’s roughly 10 percent, and we’re closer to the market we’re trying to reach.”
The last part of Manoir’s statement represents another reason why companies are moving to Chihuahua City: its proximity to the United States. For companies looking to establish a foothold in the U.S. market without paying the higher costs needed to manufacture in the United States, the Northern state of Chihuahua represents an attractive option. For companies with facilities in the United States that are looking to reduce manufacturing costs while minimizing the loss of U.S. jobs, moving some of the facilities to cities like Ciudad Juarez and Chihuahua city in Mexico can be a major means to an end. Luis Enriquez, who oversees Chihuahua operations for Nordam (based in Oklahoma), explains that “If it weren’t for this facility, we wouldn’t be able to bid competitively on the global level, and that would equate to a serious loss for U.S. jobs, not to mention the ability of the United States to embrace 21st-century thinking about business.” Mr. Enriquez also notes that outsourcing to Mexico preserves many U.S. jobs that would otherwise be lost of the company was forced to outsource to more distant locales, such as China.
Further driving this movement is an infrastructure hospitable to the high-tech world of aerospace manufacturing. Mexico has already established its prominence in the automotive manufacturing industry and many experts feel that this previous rise has laid the groundwork for the growth of aerospace manufacturing. One key aspect is getting many different kinds of manufacturers to open facilities. Jesus Mesta Delgado, the president of Index Chihuahua sums it up thusly: “What we’re planning to do is make Chihuahua a one-stop city. In the U.S., you’d have to travel to seven different cities to do what we’re trying to make possible right here.” Other factors driving the aerospace surge include Mexico’s commitment to intellectual property rights and its workforce. For high-tech industries to thrive, there has to be an ample supply of engineers, and Mexico’s universities are helping to meet that demand. The combination of low manufacturing costs, a prime location and a well-designed infrastructure have fueled the $1.25 billion in foreign aerospace investment in Mexico in 2010, a figure that should continue to grow as Chihuahua City and other regions establish themselves as top aerospace manufacturing destinations.