Answer to Question #30595 in Other Economics for Nhatnguyen Tran

Question #30595
When was the Mexican aerospace industry established and what factors have contributed to its growth?
Expert's answer
The aerospace industry in Mexico is one of the three largest industries manufacturing in Mexico today. This industry has proven to be a lucrative
investment for Mexico and its manufacturing base, exceeding $3 billion within
the last few years. Over the next 5 years that number will continue to grow,
while simultaneously creating thirty-five thousand jobs in Mexico. Two hundred
aerospace companies currently manufacture in Mexico and employ more than two hundred
thousand people.

Mexico has welcomed the aerospace sector with open arms and Mexico has become the location of choice for those who are seeking a low-cost
manufacturing footprint in North America. Today, nearly every component of a
plane can be manufactured in Mexico, including turbines, fuselages and sensors
for jet engines. In addition, as a way to entice big business, the Mexican
government has laid out a comprehensive, sound, multi-year plan that aims to
increase and improve the country’s aerospace design, development and
engineering output. Predictably, the plan highlights the attractive price of
labor in Mexico.

An important part of the aerospace industry’s success in Mexico was its willingness to work with administrative outsourced service providers, such as
shelter companies, who handle all the administration and compliance management
in Mexico so the manufacturer can focus on production and quality control. As
manufacturing in Mexico expands, so does the government’s enforcement of strict
regulations in the area of customs, labor and environmental compliance. In
addition, the IMMEX program requires companies to follow rules and regulations
that continuously change from year-to-year.

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