Mexico's Welcome Mat Attracts Major Aerospace Manufacturers South of the Border Michael Mecham - Aviation Week
go to original March 29, 2013

The boom times are a testament to Mexico's geography, its embrace of free trade and adoption of legal mechanisms that provide a “soft landing” for foreign-owned factories. (Nordam)

QUERETARO and CHIHUAHUA, Mexico - In the past decade, Mexico's welcome mat for the aerospace establishment has found an industry eager to manufacture “south of the border.”

The obvious attraction is Mexico's lower wage-structure: some say that in Mexico manufacturers pay a tenth of what equivalent assembly jobs cost in the U.S.; others cite a differential of about a third from what is paid in Europe. This discrepancy is best explained by the costs of different skill levels, and by a hesitancy to be too specific on a subject that raises political hackles back home.

But lower wages tell only part of the story for why Mexico, a nation of 115 million, now counts 270 aerospace factories within its borders. On national and state levels, the country is aggressively pursuing “high-tech” aerospace jobs as part of a broadening of its industrial base beyond automobiles and electronics, for which it is already a major producer. U.S. shoppers may think of Mexico mainly in terms of summer vegetables in the winter, but the World Bank reports that industrial products account for 90% of its export earnings. The bank ranks Mexico as the world's 13th largest economy in nominal terms and No. 11 in purchasing power. “Hecho en Mexico” - Made in Mexico - is more common everywhere, including in aerospace.

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