Mexican Aerospace Industry Poised For Flight

June 29, 2012

A decade from now, Mexico will be one of the top five aerospace industry suppliers on a global scale.

That’s the prediction of Gale Thompson, vice president of International Operations with the Tucson, Arizona-based Offshore Group. And it’s no off-the-cuff remark from a man who has had extensive exposure to Mexico’s maquiladora industry during the past four decades.

“When you look back 10 to 12 years ago, there was very little manufacturing of aerospace products in the maquiladora industry,” Thompson notes. “There have always been MRO, or manufacture-and-repair operations, for aircraft flying into Mexico.

“But now, after attending many conferences and speaking with many aerospace executives, I know from first-hand experience that Mexico is rapidly becoming one of the largest suppliers in the world for manufactured aerospace parts.”

An early indicator for Thompson that aerospace manufacturing in Mexico would be big business came in 1999, when General Electric (GE) was encouraging suppliers to open Mexican manufacturing facilities. One of these suppliers – after being told his GE contract would be pulled if he didn’t follow suit – came to Thompson to discuss options.

“I visited with (the supplier) in March of 1999,” Thompson recalls. “In May of 1999, they shipped their first machined products to General Electric from Mexico.”

Historically, the Offshore Group’s Mexico Shelter Plan has provided outsourced manufacturing support to assembly operations requiring many employees, such as an automotive plant.

“Aerospace is not a high-headcount industry in Mexico, so there was a bit of a conflict between that and the shelter-company-in-Mexico business model at that time,” Thompson explains. “It was kind of interesting because, when I began talking aerospace with colleagues in the industry, they said: ‘Wait a minute. This is not a high-headcount manufacturing industry and (it) really doesn’t require a lot of personnel, so why would you pursue aerospace as a company offering shelter services in Mexico?’”

That question seems to be answering itself. Following passage of the Bilateral Aviation Safety Agreement (BASA) in 2007, products manufactured in Mexico could be sent directly to the customer, enhancing manufacturing cost-effectiveness. And smaller, less complex functions that began with making wire harnessing opened the door for more sophisticated operations such as aerospace investment castings; metal finishing, coating and plating processes; heat treating; and aerospace machining in Mexico.

It also appears Thompson’s “top five” prediction is within reach. By the middle of last year, 260 manufacturing facilities in Mexico were producing parts for the global aviation industry – nearly quadruple the amount of facilities present in 2004. (In Chihuahua City alone, 36 aerospace plants have opened between 2007 and now.) The number of Mexican manufacturing facilities is expected to surpass 300 by next year, with predictions of more than 350 facilities in operation by 2015. Conservatively speaking, that means the 30,000 jobs now available in the industry will expand to 42,000.

Though many secondary operations are available in Mexico, there are still “many more opportunities for further secondary operations shops to offer their services in the growing aerospace manufacturing market,” Thompson affirms.

“As they are becoming available, larger companies are putting more pressure on their suppliers to do more of their work in Mexico,” he concludes.


Thinking about manufacturing in Mexico? Download this ebook to move your due diligence forward and improve your probability of success.

Download Now

Recent Posts:


Start your journey into Mexico today!

50+ Questions to ask before expanding into Mexico

Thinking about expanding into Mexico? Step 1 of your due diligence process is answering all of these questions. Over the last 33 years, thousands of companies have used this guide to accelerate their expansion into Mexico. 
Download Ebook
Webinar: Choosing a Manufacturing Location in Mexico - > Register Now.