Aerospace Manufacturing in Baja California is an Engine of Growth
Aerospace manufacturing in Baja California is one of the main areas of economic growth and expansion for the West Mexico state. During the years 2014 through 2017, the aerospace industry ranked 4th in the attraction of foreign investment dollars (FDI). Approximately US $208 million dollars in FDI flowed into the sector. The industries that garnered more foreign direct investment dollars during those years than aerospace manufacturing in Baja California included passenger vehicles, energy, trucks and tractors, and passenger vehicles. Data from the Economics Ministry of Mexico demonstrates this.
One of the most recent investments made in the Baja California was a nine million dollar investment by the US firm Kern Engineering and Manufacturing. Kern will engage in the production of aircraft parts for engines, as well as for space-related technology in its facility in the US – Mexico border city of Tecate. The company projects that it will create three hundred and fifty positions in its first year of operations and expects to experience significant growth within its first 5 years of its initiation of activity. The company is one of 5 suppliers to the aerospace industry that maintains a presence in the city.
Beyond the aerospace manufacturing in Baja California, the industry in all of Mexico is approximately 16% more competitive in costs when looked at side by side to the same sector in the US. Mexico has also enhanced its competitiveness in recent years because of training programs that have been implemented for its workforce. In addition to a growing pool of skilled labor in Mexico, other benefits that are enjoyed by firms that conduct manufacturing activities in aerospace manufacturing in Baja California, as well as other production centers in the country ( these include Queretaro, Nuevo Leon, and Sonora, for example) include location in a highly beneficial geographic location and a network of numerous Mexican free trade agreements (FTAs) that places manufacturers in Mexico in a preferential access to vis a vis lucrative world markets.
According to Mexico’s FDI promotion agency, Pro Mexico, the sector that includes aerospace manufacturing in Baja California, as well as in the other areas, is characterized by a wide variety of actives. Mexico’s aerospace industry is made up of firms that manufacture, maintain, repair, engineer, design, and test aircraft parts for both military and commercial use.
Mexico developed itself to be a formidable country in the aerospace manufacturing sector by 2016. From 2010 through 2016 the country’s industry exports increased by an average fourteen percent every year. Exports were approximately US seven billion dollars, while imports were a bit below US six billion dollars. This means that, in its entirety, Mexico had a trade surplus in the aerospace industry of just over US one billion dollars. Also, during this period of significant growth in the aerospace industry in Mexico, Queretaro received of 47.9 percent of foreign investment in the sector. Aerospace manufacturing in Baja California attracted just under 14% percent, while Chihuahua was the recipient of 11.2 percent of total industry investments in the country.
The goal that state officials have for aerospace manufacturing in Baja California in 2018 is to attract US $1.5 billion dollars of foreign direct investment to the industry. This number is a bit above the US $1.4 billion that the sector received in the previous year. Currently, 90 firms in the aerospace industry have a presence in the state of Baja California as a whole. These manufacturers employ a total of thirty-three thousand jobs. It is expected that Baja will see an annual ten percent growth in its industry each year.
In addition to capturing new foreign investment, aerospace manufacturing in Baja California has expanded significantly through the growth of companies with existing facilities in the entity. Both Esterline and Hutchinson Aerospace announced significant plans for growth at the 51st Paris Airshow in 2017. Esterline made a commitment to grow its workforce of approximately 1000 by three hundred individuals. This would represent an additional investment by the company of US $35 million dollars. The funds would be used to expand its ability to supply its aerospace customers with more sensors, connectors, and plastic molded parts.
In the case of the French manufacturing of aerospace parts, Hutchinson, the firm has stated that it would invest US forty million dollars over a period of 5 years. With this new influx of capital, the company will boost its capacity to build aircraft anti-vibration and sound dissipation systems.
In addition to Esterline and Hutchinson, the San Diego-based manufacturer, Spectrum, stated that it would initiate a project to manufacture an executive jet, the S-40, in the city of Mexicali, Baja California.
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