Mexico’s Jet Set

QUERÉTARO, Mexico — Eager to shed its reputation as the bargain basement for American manufacturers, Mexico is staking its industrial ambitions on a loftier sector – jet planes.

It has some high-flying help.

The world’s No. 3 aircraft maker, Bombardier Aerospace, is about to break ground on its fourth plant in Querétaro, a bustling industrial hub 140 miles northwest of the Mexican capital. The government’s goal is for the first Mexican-built plane to take off from the city’s new airport within the next decade.

“The levels of technological development and of manufacturing in this sector are the strictest worldwide,” said Renato López Otamendi, the former secretary for sustainable development in the state of Querétaro.

“If we can make this industry grow in our country, other industries will follow, and wages will inevitably go up,” said López Otamendi, who helped lure Montreal-based Bombardier to the state in 2005.

While Mexico has been producing parts for the aeronautical industry since the early 1990s – annual exports now surpass $3 billion, according to government figures – Bombardier was the first aerospace manufacturer to set up operations in the country, in May 2006. The company, best known for its Lear jets and other executive planes, ranks behind only Boeing and Airbus in size.

“We believe in the Mexican economy,” said Real Gervais, general manager of Bombardier’s operations in Mexico. “We believe it has a good future. We think that the politics are stable, the economy is growing and aerospace is a good industry for Mexico to invest in.”

Bombardier currently employs 1,000 workers in Mexico – up from 400 just two years ago – at three gleaming, hangar-like factories surrounded by cactus fields. They churn out the main aircraft body sections for the Challenger 850, the company’s largest business jet, flight controls for its ultra-quiet Q-400 turboprop airliners and tail pieces for the Global Express ultra-long-range VIP jet.

Bombardier is in the process of doubling its Mexican work force to handle production for the fuselage and flight controls for its flagship Lear Jet 85. The aircraft is billed as the first high-speed jet to use 100-percent composite materials for better fuel efficiency and lower emissions. Preparations involve sending 250 employees to Montreal for special training, a vote of confidence in the technical capacities of its Mexican workers.

“The Lear 85 is brand-new technology,” said Gervais. “We’re very excited that Bombardier believes in Mexico enough to go abroad with this project. It proves the success that Bombardier has had in Mexico.”

The company plans to invest $450 million in its Mexican operations by 2016, a commitment that has helped lure more world-class aircraft suppliers to the aerospace cluster in Querétaro. They include Meggitt Plc., the British aerospace firm specializing in equipment and high-performance sensors, and Paris-based Safran, whose aerospace division is a leading manufacturer of engine equipment for airplanes, helicopters and spacecraft.

“This is huge,” said Gervais. “We’re all going to be looking for more or less the same type of people and it’s going to help us to develop the right engineering capabilities.”

According to the country’s Economy Ministry, Mexico’s aerospace industry employs roughly 27,000 workers at more than 190 firms, most of them in northern Mexico. However, new companies are arriving practically every month in Querétaro, fueling the city’s reputation as the high-tech hub for the sector.
Mexico’s aeronautical ambitions received a boost during the 2000-2006 administration of former President Vicente Fox, who saw the industry as a way for the country to evolve from an economy dominated by low-skill labor and poverty. During a visit to Montreal in 2005, he met with Bombardier officials and urged them to consider moving some of their overseas operations to Mexico.

“The companies didn’t just show up in Mexico,” said Eduardo Solís, the former chief of investment promotion for the Economy Ministry. “We went after them,” Solís said. “It was part of a strategy of generating growth.”

After surveying half a dozen other cities, Bombardier settled on Querétaro, in part enticed by the state government’s offer to create a 300-acre aeronautical park adjacent to the new airport to house Bombardier and other companies.

Then in November 2007, the state government founded Mexico’s first aeronautical university next door to the airport. With $35 million in state and federal funding and guidance from U.S. and Canadian universities, the Aeronautical University in Querétaro (UNAQ) opened its doors in January 2009 to its inaugural class of some 100 students. The university is unusual – and possibly unique in the world – in offering three levels of study, ranging from aeronautical technicians to aeronautical engineers, to meet the industry demand for highly trained workers with specific areas of expertise.

The program has been slow to take off, with more than half the students dropping out in the first semester. University officials attribute the high attrition rate to the students’ failure to adapt to the rigorous demands of the industry.

“They have to be very conscious that they’re working with something that is very delicate and that any error could provoke an accident,” said Federico Pérez, the university’s academic dean.

Still, many of the students said they were inspired by the challenge.

“Aeronautics is a total novelty in Mexico,” said Carla Bueno, the lone woman among several dozen students pursuing basic technician degrees at the UNAQ. “I can hardly imagine what it would be like to build the first airplane in Mexico.”

Success in final assembly would put Mexico in an elite group of industrialized nations and developing countries that produce airplanes for the international market. Brazil’s Embraer is one of the largest aircraft manufacturers in the world.

Skeptics counter that the Mexican aircraft effort still has to prove itself.

“You need very disciplined, structured, high-paid employees with a lot of experience,” said consultant John F. Walsh, president of the Annapolis-based Walsh Aviation. “There aren’t many places in the world that do that. It would be a very big deal.”

Other analysts suggested that Bombardier’s decision to open shop in Mexico was a ploy to dodge union demands back home.

Gervais dismissed this idea, and said that shifting lower-skilled tasks to Mexico will free up Canadian workers to tackle such prestige projects as the new CSeries mid-size commercial jets, billed as the greenest planes in their category.

At the same time, operating in Mexico has opened doors for Bombardier to markets throughout Latin America.
“Of course it’s an emerging country,” Gervais said of Mexico. “We’re not hiding this. But we think it’s a win-win situation for everyone.