Photo credit: Leaving on a jet plane by McPig
For years, Mexico has been quietly but steadily building itself into a manufacturing powerhouse, and automobile manufacturers have known for decades that Mexico’s highly skilled and ethical workforce are among the world’s best. It’s a well known fact that the automobile industry in Mexico is expanding at an astounding rate to meet demand and that there are plenty of opportunities in Mexico for foreign auto makers and foreign auto parts manufacturers.
However, one industry that is also booming and might not be receiving as much press as the automotive sector is the aerospace sector. And just like in the automotive industry, there are opportunities for many foreign companies.
But first of all, it’s necessary to have a look at why a foreign company would want to set up shop in Mexico. Sometimes, some companies will set up shop abroad to take advantage of lower wages; however, this can prove to be disastrous if the workforce is not highly skilled or educated. Mexico has a highly educated, highly skilled, and hard-working pool of human resources, making them the ideal employees for high tech and specialised manufacturing. While their wages may not be as low as the wages employees in Asian countries may receive, they are still much lower than their U.S. and European counterparts. Therefore, foreign companies get the best of both worlds: great value for money.
Foreign companies operating in Mexico also get to take advantage of the free trade agreements that Mexico has with dozens of other countries. This means access to virtually all markets in the Americas, the European Union, and some Asia-Pacific countries.
The third reason why companies, especially aerospace companies, should consider Mexico is the fact that companies can be 100% foreign owned, which is not the case in other countries trying to attract investment. This means that the company has full control over how their business is conducted.
So what are the opportunities that exist in Mexico’s aerospace sector? Well, the first big opportunity is the ability to enter the United States market without having to pay the wages that U.S. engineers and employees will expect in factories. In other words, it’s a cost effective way to be a part of the American market and meet the needs of American clientele. Furthermore, Mexico’s effective transport links make it easy to import raw materials if needed and export the finish product across the border.
The second opportunity for foreign companies in the aerospace sector is to set up factories for the Mexican market: instead of paying costly shipping fees and high wages, some helicopter manufacturers from Europe have decided to make the helicopters for their Mexico clients right there in Mexico.
At present, there are over 250 companies in the aerospace sector operating in Mexico: Manufacturing and maintenance firms are expanding and the numbers of companies coming in is expected to grow as Mexico’s government is actively promoting the aerospace industry. Making things especially attractive for foreign firms is the fact that the country provides a “soft landing” for businesses in high-tech manufacturing. Red tape is cut to such an extent that manufacturing can start weeks or months after a deal has been signed; in other countries, this process can take years, affecting a company’s bottom line severely.
Finally, another good reason why an aerospace company should do business in Mexico is IP protection. In an industry where design is so imperative, a rival company stealing a proprietary design can be devastating. Mexico’s laws are strict where intellectual property is concerned.
Mexico’s aerospace industry shows absolutely no signs of slowing down and only growth is predicted; companies that take advantage of what the Spanish-speaking country have to offer will find that the opportunities are almost limitless.