Aerospace companies started looking to foreign neighbors like Mexico to manufacture parts at a lower cost years ago. Others have headed to countries further away like China. However, after a while, more firms began bringing production back to the U.S., otherwise known as reshoring, with much of the aerospace manufacturing activity now located in the Southeast, Aviation Week recently reported.
Numerous aerospace companies have established or plan to create a presence in the U.S. region: Boeing, Airbus, Rolls-Royce, Embraer and Airbus Helicopters, according to the source. The companies have or are looking to create final assembly facilities. Many more sub-tier suppliers for the industry are looking to move to the region as well, as it offers low energy costs, flexible labor and access to the U.S. defense market. Pro-business state governments are also helpful.
Many of those manufacturing benefits are also seen in nearby Mexico. Aerospace manufacturing in Mexico is a growing industry thanks to the country's proximity to U.S. aerospace original equipment manufacturers. Mexico's stable job wages, the growing skill sets of the workers there and its strong protection of intellectual property also make it a great place to manufacture goods, Aviation Week reported. Also, the safety concerns that used to keep companies from investing in Mexico manufacturing are subsiding, and businesses have more confidence in Mexico's markets.
Some companies that have invested in Mexico include B/E Aerospace, Cessna, Safran, Bombardier and Zodiac. Other companies like GE and Honeywell have had a presence in Mexico for a while and continue to bring more activity, like engineering, to the country.
Suppliers around the globe
A major benefit for aerospace companies opening operations in Mexico is the ability to keep its supply chain and manufacturing in close proximity. Suppliers in the industry are located all around the globe - from Europe and the Asia-Pacific Region to the Middle East, Manufacturing.net reported. But this wide geographic dispersion can create challenges for the aerospace industry, the source said, creating delays and complexities like supply chain miscalculations and part shortages and manufacturing and engineering inefficiencies.
However, for aerospace companies operating in the Southeast U.S., having partners in nearby Mexico is a smart idea - one that will lead to lower operational costs and a higher level of reliability in products. Mexico's proximity to the U.S. market is a major advantage many companies are already benefiting from, and many more are making plans to do so.
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