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The Honolulu Advertiser
Posted on: Monday, April 7, 2008

Mexico becoming a hub of aerospace industry

By Chris Hawley
USA Today

QUERETARO, Mexico — Chances are much of your car was built in Mexico. Increasingly, the planes you fly on are, too.

Aerospace companies are streaming to Mexico, drawn by lower wages, enthusiastic government promotion, a new safety agreement with the United States and an increasingly sophisticated workforce.

In a new plant in the central Mexican city of Queretaro, workers who make $3.50 an hour make rudders and bundles of wiring for airliners. Across town, engineers at General Electric's research center design jet engines. In a nearby industrial park, workers overhaul landing gear at a gleaming new plant.

"Every day, we are seeing more and more activity of this kind in Mexico," said Jose Javier Roch, head of aviation for the General Directorate of Civil Aeronautics.

Mexico's aerospace-related exports have more than tripled since 2004, to $683.2 million last year, and exports are accelerating as manufacturers move into big-ticket items such as tails and fuselages. One aircraft maker, Canada's Bombardier, wants to eventually assemble complete jets in Mexico.

Despite a booming worldwide market for aircraft, U.S. unions worry that the move to Mexico might result in major layoffs if the industry takes a downturn.

"This is a technological base, an important industrial base for our country, and we're just giving it up," said Ron Eldridge, aerospace coordinator for the International Association of Machinists and Aerospace Workers.

Industry officials liken the trend to the 1980s, when U.S. companies moved from making auto parts in Mexico to assembling entire vehicles. Mexico exports $42 billion in cars and parts every year.

"Mexico's vision is to do the same thing they did with the auto industry," said Real Gervais, head of Bombardier's operations in Mexico. "There's a lot of potential."

Aernnova, a Spanish firm that makes wings, tails and other sections for Boeing, Airbus, Embraer and others, is building an $84 million plant in Queretaro.

And Cessna Aircraft and Hawker Beechcraft, both makers of business jets, have moved subassembly work from their Wichita plants to new factories in Chihuahua since 2006.