Mexico Aerospace Success Story
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Transcript of Mexico Aerospace Success Story
A Mexico Aerospace Success Story
Successful manufacturers understand that behind great products and outstanding customer service are a myriad of best practices and a passion that drives people to be their best. That is why behind great companies are equally committed partners who share fundamental principles of value, risk and reward.
It is these shared principles that have earned The Offshore Group the no. 1 position as Mexico’s largest provider of support services to Manufacturers. Through outstanding performance for over 27 years, our team of committed professionals maintains this distinction by being our Clients’ most valuable ally in Mexico.
As a primary stakeholder in a vision to build a North American gas turbine engine manufacturing center of excellence, we are proud to have joined the efforts of the State of Sonora and the expertise of BCI Aerospace to host the first annual EngineForum SONORA. This publication highlights the essential factors which are key to attaining this vision.
The EngineForum SONORA was the perfect venue for aero-engine components manufacturers from around the world to share the vision and plans for building more efficient and capable supply-chains. To this end, The Offshore Group is proud to announce that its manufacturing communities in Guaymas and Empalme Sonora are home to Mexico’s largest cluster of aerospace precision machining and secondary operations in Mexico.
We know that our work has just begun and we invite the aerospace community to come and see why Sonora and The Offshore Group are positioned to serve the needs of the aerospace industry today and in the future. Come and create your own success story.
Luis Felipe Seldner III
President
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Comments from the Economic Development Council of Sonora
Enrique Ruiz SánchezDIreCtor of the eConomIC Development CounCIl for sonorA [email protected]
“The EngineForum SONORA was an event conceived two years ago for which we sought an
alliance of the Economic Development Council for Sonora with BCI-Aerospace (Business Conventions International), a French company with over 10 years in the aerospace industry in Paris, Montreal, Tokyo, Seattle, etc.
BCI-Aerospace is a strategic partner for Sonora, be-cause it places us on a global level. Our goal is to put Sonora as a part of a global circuit where business transactions for aircraft parts are conducted. Other companies like The Offshore Group and Rolls-Royce were invited as sponsors and partners for this event celebrated in Hermosillo on May 13-16, 2013.
We chose an event dedicated exclusively to engine components due to the capabilities we already have in the State, as we aspire to be the center of excellence for engine components fabrication in the world. Sonora already has casting, precision metal machining and surface coating capabilities; having this integration of the supply chain provides us with a global advantage. Currently, the parts manufactured in the United States are shipped to the UK and then to Mexico, consuming valuable time and complicat-ing the process, which slows down production and increases the cost of parts. Therefore, any opportunity to make this process more efficient is a business opportunity for the companies in the aerospace industry.
We also believe that within the strategy of large aerospace companies there is a search for region diversification, as it is not profitable for them to manufacture parts in countries where the currency is the euro or the pound sterling, since the aerospace contracts use the dollar and they are long term contracts. Fluctuations in the exchange rate cause operations that were competitive five years ago to be uncompetitive today.
The advantage that Mexico holds is that its currency maintains parity with the dollar as well as its com-petitive labor force, geography and technological adaptation.
Our strategy in Sonora is to attract an OEM (Original
Equipment Manufacturer) and engine manufacturers,
among such as Rolls-Royce, Safran, Pratt and Whitney,
etc.
BCI Aerospace supported this strategy and committed
to the first EngineForum SONORA, which, in addition
to strategic partners such as the State of Arizona,
had the participation of Rolls-Royce, Safran, Boeing,
Bombardier, among others, during conferences and
B2B meetings.
The aerospace cluster in the State has the presence
of companies that are now manufacturing parts for
these OEM’s, as is the case of JJ Churchill, a Rolls-Royce
certified supplier. They design their parts at their cor-
porate offices in the UK, activity that in the future can
be brought to Sonora.
Regarding aerostructures, the “Sonora Institute for
Aerospace and Advanced Manufacturing” (SIAAM) was
created in order to train young people in aircraft doors
assembly operations. The SIAAM study plan is based
on the Canadian aerospace school “EMAM” (Aerospace
Trade School of Montreal), with whom the State
has associated and now we have teachers trained
in France who will train the future employees of the
aerospace companies in the State.
The French aerospace company Latecoere, has
invested in Sonora to implement aircraft doors and
harnesses assembly processes. They began opera-
tions last year. This company will be the first tenant in
the new aerospace park near the Hermosillo airport,
where we aim to develop the supply chain for the
aerostructures sector. The project with Latecoere will
generate around 500 jobs in addition to an invest-
ment of approximately 28 million dollars and a large
potential for growth, once operations begin.”
www.sonora.org.mx
Government of Sonora and BCI-Aerospace partnered to boost the aerospace industry in Sonora
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Q: So basically in your experience, do you recom-
mend Sonora to another company?
Yes! Absolutely! And I am delighted when I’m in the
UK to be, talking up Mexico but actually talking up
Sonora and Hermosillo as well because for a small
company it’s quite daunting, quite nerve-wracking to
take your first investment overseas. It’s a lot of money,
it’s a lot of senior management resources, but the help
that you can get from COPRESON and the Sonoran
government makes it a lot easier, a lot more straight-
forward and it reduces risk.
Q: Do you or your company have concerns about
the safety, the security? No. No. This is one of the
problems. As you get to know more about Mexico, it’s
quite interesting, that the homicide rate per thousand
people is about the same as in the US. If you go to
parts of London it can be dangerous as well. It’s about
where you are and being aware. Actually we’ve
found Sonora, incredibly relaxed and friendly. Of
course there’s some places we’ve been in other states
where we had to be a little careful but here I have a
General Manager, he is British, he has a young family
here with him and he is comfortable. It’s a wonderful
place, good climate, good food, friendly people.
Q: How common is it for small enterprises in this
industry to move to other parts of the world.
Quite unusual. We are leading edge in this area. We
have very high technology and therefore we are very
selective where we are going to go in the world. This is
why we haven’t gone to China. Now, I speak Chinese.
An easy decision would be for me to move business
to China. But our technology, our intellectual property,
our IP and know how, we need to protect. That means,
in China, I can’t protect it. It would leak. Actually,
Mexico has a good reputation here for looking after
technology, for growing businesses in a very nurturing
environment. So, I’m comfortable from that perspec-
tive even though I am a small business. And although
today we are about 30 million US dollar turnover and
it’s all in the UK we have set a target by 2020 to be 80
million US dollars and of that 30 million is going to
come from here in Mexico, so I’m quite optimistic.
Q: What do you think about the suppliers? Is
it difficult at this point to get suppliers from
Mexico?
I think it is difficult, but it’s changing very, very quickly
and the promotional activity that COPRESON and the
State of Sonora have been doing to encourage the
key elements of the supply chain to co-locate here,
to cluster here, is making a real difference. If you just
look around the show today, you have companies like
Incertec who are already here, already approved for
Boeing and other companies like Ellison who are look-
ing to come. There are many of these supply chain
outlooks that are coming in. It is difficult; it’s not like
the auto sector. In aerospace you do have to have the
supply chain all together. But the legal framework and
the shelter scheme means it is really possible to get
that going and it’s happening. So the only element
that we are missing at the moment would be preci-
sion forging but there is a lot of work happening on
that now to encourage that inward investment into
the state. So it is difficult, but frankly, wherever we go
in the world it is difficult. In my home base in the UK, I
have to send parts hundreds of miles away for coating,
here I would be able to have them coated eight miles
away, it’s an advantage.
Here I have a General Manager, he is British, he has a young family here with him and he is comfort-able. It’s a wonderful place, good climate, good food, friendly people.
“In my home base in the UK I have to send parts hundreds of miles away for coating, here, I would be able to have them coated eight miles away, it’s an advantage”
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Rafael Navarro MoralesCommerCIAl mAnAger
Facing the United StatesElimco - Prettl Aerospace. We are a 100% Mexican joint venture but with equity 50% German 50% Spanish. We design and manufacture both electrical harnesses and control decks for civilian and military aviation as well as control units for civilian and military aviation.
Here I have found many possibilities not only to Mex-ico but also facing the United States and especially in ways of collaboration and the willingness to work of Mexican companies across different states, be it So-nora, Baja California or Querétaro desire to work with each other and that is very good.
Elimco - Prettl Aerospace only manufactures aero-space harnesses but Prettl Group is a very strong German group who also manufactures, in fact its main activity is the production of electrical harnesses for the automotive industry. They wanted to enter the aerospace sector and found a partner in Spain, which is the Group Elimco, who has been Tier1s of EADS Group for over 20 years and together, combining the experience of Elimco Aerospace and the financial capacity of Prettl. We work for major global OEMs as well as major Tier1. We are Tier1 or Tier2, depending on the project.
Xavier Poulin and Jean Laliberté of Atlas Aeronautik said: “It’s nice to see Mexico growing like that in the aerospace industry. We can see some potential busi-ness to do in the future but we see it as a new seed, coming, growing up and putting itself on the market. Compared with the automotive industry, years ago there was nothing going on with the automotive industry in Mexico and now it’s growing very fast, the assembly plants, the suppliers for the automotive industry. Same thing is happening in the aerospace business here in Mexico. The reason, I don’t know, it’s probably the good will of making business, getting along well with other countries and the specialization, there are many specialists here in your country of many kinds of products and people want to work and they work hard. This event is interesting. There are many, many com-panies and we’ve discovered new potential. Even with scheduled meetings with different customers we have had the chance to meet new visitors and create new opportunities. That’s interesting, very interesting for us. We will see the future.”
It’s nice to see Mexico growing in the aerospace industry
Xavier Poulin Solution Manager of Atlas Jean Laliberté Director Center of Excellence atlasaeronautik.com
Here I have found many possibilities not only to Mexico but also facing the United States
Eric Dolby mArKetIng mAnAger ellIson surfACe teChnologIes
“Quality is a given. Time is a require-ment. Relationship with customers is what differentiates.”
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26ROCA FUERTE INDUSTRIAL PARK. Guaymas, Sonora, Mexico.
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Manufacturers around the world are con-
tinually challenged to find competitive ad-
vantages. The global economy has expanded
the playing field and striking the right balance
between cost, quality, delivery, flexibility, and
innovation often results in achieving one ob-
jective at the expense of another. However,
one thing holds true for most manufacturers
trying to be great at everything, regardless of
where they operate, is an exercise in futility.
Which is why having the right partners, sup-
pliers, and service providers often makes the
difference between failure and success.
We also know that operating in the right
venue is the foundation for sustaining high
levels of productivity and efficiencies. Man-
ufacturing in locations with proximity to a
capable and motivated labor force, access to
skilled leaders, an established supply-chain,
access to logistics infrastructure, and within
a regulatory framework that is fair and pre-
dictable, provides an environment where
manufacturers can thrive.
Having a keen understanding of the ele-
ments that manufacturers need to succeed,
The Offshore Group operates a business
model that has proven effective for over 27
years. The model has three key components
that are seamlessly integrated:
Strategically located and fully integrated
manufacturing communities in Mexico
A legal framework commonly known as a
“shelter” that mitigates risk and exposure
A comprehensive set of world class support
services configured and delivered specifical-
ly for manufacturers
Today, over 59 manufacturers leverage The
Offshore Group’s infrastructure, knowledge,
and expertise resulting in the employment of
more than 16000 people in Mexico working
across 4 million square feet of industrial space,
and the processing of over $1.5 billion dollars
in Customs declarations.
Clients of The O ffshore Group include
Fortune 500 multinationals as well as small
to midsized manufacturers, serving the aero-
space, automotive, medical devices, electron-
ics, metal fabrication and machining, plastics
molding, appliances, office products, and
HVAC industries.
The Offshore Group’s Value Proposition
Foreign companies, regardless of their size,
have a number of options available to them
for establishing a manufacturing presence
in Mexico. The most common modes of op-
eration are standalone, shelter, joint venture,
and subcontracting. Each of these presents
Our services free companies to focus on what makes them competitive
You Manufacture... We do the rest
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advantages and disadvantages in terms of cost, control,
and risk.
When conducting their due diligence, foreign com-
panies evaluating a presence in Mexico often compare
a standalone vs. shelter scenario and generally reach the
following conclusions:
Standalone operations retain full control over all as-
pects of the business in Mexico but also assume all the
risk and exposure associated with regulatory compliance
and the often costly learning curves of working in a new
business, legal, and social culture.
Shelter providers, and more particular the shelter
version that The Offshore Group delivers day-to-day to
its manufacturing clients, is a means for mitigating risk
and reducing operating costs. Most importantly, the
foreign manufacturer retains the control of all aspects of
production, engineering, quality, delivery, supply-chain,
customer service, assets, and manufacturing technology
and know-how. All production related activities are di-
rected and managed by the foreign manufacturer while
administrative and regulatory functions are carried out
by The Offshore Group’s team of experts, state-of-the-art
systems, and ISO 9001:2000 certified processes.
The Offshore Group’s Services Over 700 people make up The Offshore Group’s support
staff which is continually trained and motivated to pro-
vide outstanding service to its 56 manufacturing clients.
The services carried out include:
Labor recruiting and management, payroll & tax com-
pliance, and employee benefits management
Import, export, and cross border management and
regulatory compliance
Building maintenance and park security management
Environmental, health, and safety compliance
Employee transportation management and optimiza-
tion
In-Mexico procurement of MRO and services including
vendor accounts payable and VAT recovery
Fiscal compliance and controls
Government, community, and trade association affairs
and corporate social responsibility
Leveraging our Economies of ScaleManufacturers of any size who choose The Offshore
Group to help them gain a competitive advantage
in Mexico from day one, have immediate access to
economies of scale that only large multinationals are
able to build over a long period of time.
For example, The Offshore Group’s Mexico affiliate in
Guaymas and Empalme, Sonora is in fact the largest
private employer in the State of Sonora. Among the
benefits that Clients derive from operating within
The Offshore Group are lower costs on employee
transportation services and local procurement due to
volume negotiations, employee retention by providing
access to on site medical care and child care, access to
resources for workforce development, and preferential
response times from all utilities providers.
Through The Offshore Group’s size in Mexico, Clients
have a strong voice in national-level trade associations
that it turn regularly interface with governmental
bodies (such as Mexico’s Congress as well as State and
Federal Leaders), and have the ability to productively
engage with local labor union chapters.
By leveraging The Offshore Group’s economies of
scale, which have been steadily in the making since
the company’s inception 27 years ago, Clients enjoy
the peace-of-mind of being served by Mexico’s most
reputable and well established shelter provider in the
country.
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HERMOSILLO
GUAYMAS EMPALME
SANTA ANA
PHOENIX
SONORA
USATUCSON
NOGALES SONORA
NOGALES
Guaymas/Empalme, Sonora is located in the Northwest Mexican State of Sonora, on the Gulf of California. This region is located 300 miles south of Tucson, Arizona. It is easily accessible by air, rail and four lane highway. The city’s universities and technical schools serve as a recruiting base for The Offshore Group client companies.
Bella Vista Industrial Park Empalme SONORA
The Offshore Group’s long-established facilities inGuaymas and Empalme, are home to Fortune 500multinationals as well as small to midsizedmanufacturers, serving the aerospace, automotive,medical devices, electronics, metal fabrication andmachining, plastics molding, appliances, officeproducts, and HVAC industries.
Roca Fuerte Industrial Park Guaymas SONORA
The Offshore Group’s Manufacturing Communities in Sonora
BellavistaIndustrial Park
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By Eduardo SaavedraexeCutIve vICe presIDent of BusIness Development
the offshore group
Guaymas, Sonora is a small coastal manufacturing city situated in the country’s Northwest region. It is home to 150,000 inhabitants, and is host to one of the largest clusters of world class Mexican aerospace precision machining operations in the country. Although every major aerospace OEM knows about Guaymas, and its growing aerospace manufacturing acumen, few know that this manufacturing haven is proactively training a current and future workforce of precision aerospace machinists.
A new and practical way of teaching mathematics has recently been introduced to junior high school teachers and students in Guaymas. The method is called Metromatemáticas or “Metromathematics.” Its goal is to give teachers and students real world problems to solve using applied mathematics in classrooms. These classrooms, however, are more akin to metrology laboratories that might be found in some of the more advanced manufacturing facilities than the traditional classroom.
While “on the job,” the teachers and students dress for the occasion each day they go to class. Everyone’s attire consists of long white lab coats. Dressing in this manner instills a sense of professionalism in the participants, and gives the students’ parents a feeling of pride that their early teenagers are on a path to find a great job in the growing Mexico aerospace industry.
Metromathematics was conceived by Nahum Correa. He is a Six Sigma Master Black Belt and the owner of an authorized Mitutoyo equipment and machinery distributorship located in Hermosillo, the capital city of the state of Sonora. With financial and infrastruc-ture support provided by The Offshore Group, Mr. Correa has graduated 70 junior high school teachers and 140 junior high school students from the pro-
gram in a short 18 months. Aerospace manufacturers in the Guaymas area provide parts and raw materials used in their machining operations. Teachers use those parts along with metrology equipment such as calipers and coordinate measuring equipment (CMM’s), to understand tolerance requirements used in the emerging aerospace industry. The math being taught is immediately relevant. This captivates the at-tention of both the students and the teachers. The re-sult of this “real world” feel is that class time flies by. As one might expect, there is zero student absenteeism. Everyone shows up. All of the teaching conforms to the international standards of ISO/IEC 17025:2005.
One special feature of the program is the “tourna-ments” that are held periodically among teachers and students. The contests consist of solving challenging problems using newly acquired math skills. Winners get trophies and receive great distinction from their peers for their accomplishment. At the end of the program, all the graduates proudly parade through downtown Guaymas with banners and flags, to the accompaniment of local school bands. The parade makes the winners, as well as the rest of the students, feel great pride as their family and friends celebrate their victory in public.
When these students enter high school and college math programs, they will already have a superior academic foundation, a fearless attitude towards mathematical problem solving, and a level of comfort that will be conducive to exercising greater creativity in related subjects. The logical result will be higher skilled and more competent engineers and scientists than those produced by traditional math classroom programs and teaching environments and methods. These educated students will be prepared to take their place in a Mexico aerospace industry that is growing by the year.
These educated youth will be prepared to take their place in a Mexico aerospace industry that is growing by the year.
A new way to learn MathVisiting the Manufacturing Technology Training Center
A trip to Guaymas and tour of the Manufacturing Communities took place on the third day of the EngineForum SONORA. The tour included a visit to The Offshore Group’s Manufacturing Technology Training Center and the laboratory classroom of Metromathematics. The visitors received information and met with students that are currently studying mathematics in this innovative setting.
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Worldwide thermal processing specialist, Bodycote, announced that it’s facility located in Empalme, Sonora, has achieved Nadcap accreditation as well as prime approvals for Rolls-Royce Aero Engines, MTU Aero Engines, and Pratt & Whitney Canada. The Empalme plant was established to support aerospace OEMs and the local supply chains in Mexico’s rapidly expanding aerospace industry.The facility conducted its official inauguration on May 16, 2013, with a ceremony attended by key dignitaries including Guillermo Padrés Governor of the State of Sonora,México; Justin McKenzie Smith, Chargé d’affaires of the British Embassy in Mexico Sarah Hildersley, Director of UK Trade and Investment in Monterrey; Matthew Alty, Vice-Presi-dent of Bodycote’s Surface Technology business and Mike Sobieski, Vice-President North America Op-erations of Bodycote’s Aerospace, Defense & Energy division, as well as distinguished guests from a range of regional aerospace companies and organizations. Tracy Glende, President of Bodycote’s global Aero-space, Defence & Energy division says: “Obtaining Nad-
cap accreditation is the key to unlocking new potential in the Guaymas region and beyond. It opens the way for Bodycote Empalme to widen its customer base and provides greater visibility of the capabilities of the plant. We look forward to driving on and adding to our thermal processing and coatings portfolio in the very near future.”Bodycote’s core business is to provide services that protect and improve the properties of metals and alloys, thereby improving the material properties of compo-nents, extending their operational life and making them safer. The company plays a vital role in the aerospace supply chain.Paul Dymond, Senior General Manager for the Em-palme plant, adds: “The presence of a Nadcap accredit-ed facility enables companies in the State of Sonora to access the highest quality heat treatment and brazing services, and provides a cost-effective option for avia-tion and power generation manufacturers within the region, enabling them to achieve complete processing without transporting parts back to the USA.”
Bodycote’s Empalme, Mexico plant achieves multiple aerospace accreditationsMexico plant supports nearby aerospace cluster in Guaymas, Sonora
To support aerospace OEMs and the local supply chains in Mexico’s
BodycoteGrand oppening of the facility in Empalme Sonora
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