Aerospace Clusters in Mexico Webinar

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WEBINAR Aerospace Clusters in MexicoChoosing
the Right Location
April, 7th, 2010
Presenter Miguel Horcasitas Host American
Industries Group
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About the HostAmerican Industries Group

• Aerospace Leading Manufacturing Facilitator in
  Mexico

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Aerospace Manufacturing Industry in Mexico
About American Industries

• American Industries Group is Mexicos leading
  Aerospace manufacturing facilitator with over 30
  years successfully landing manufacturing projects
  in Mexico from over 100 global corporations.

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Aerospace Manufacturing Industry in Mexico
About American Industries

• The one stop shop strategic partner to start
  Aerospace Manufacturing operations in Mexico
  hassle free in 9 weeks.

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About Miguel Horcasitas

• Business Developer for the Aerospace
  Manufacturing Industry in Mexico

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Aerospace Manufacturing Industry in Mexico
About Miguel Horcasitas (Presenter)

• He is an Aerospace Business Developer from a 30
  years of experience world class Manufacturing
  Facilitator in Mexico.
• Miguel has been a key element in establishing
  Aerospace Manufacturing Operations in Mexico, and
  he has been a strategic business partner for
  Aerospace companies such as Cessna, Hawker
  Beechcraft, CAV Aerospace, Nordam, Zodiac
  Aerospace, among many more aerospace companies
  and suppliers.

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Aerospace Clusters in MexicoChoosing the Right
Location
Presenter Miguel Horcasitas Host American
Industries Group
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Aerospace Manufacturing Industry in Mexico
Contents

• Aerospace Industry Historic Facts
• Government Commitment
• Key Figures
• Aerospace Industry Today
• Geographic Location
• Main Clusters
• Summary

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Historic Facts

• Aerospace Manufacturing Industry in Mexico

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Aerospace Manufacturing Industry in Mexico
Historic Facts
The first aerospace company WAS established in
1969 in Mexicali, Baja California.
Source Industrial Development Commission of
Mexicali.
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Aerospace Manufacturing Industry in Mexico
Historic Facts

• Few small and medium sized companies followed the
  trend during the 80s, 90s.

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Aerospace Manufacturing Industry in Mexico
Historic Facts

• Most of them established in the border Mexican
  state of Baja California to support the
  California (US) based operations.

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Aerospace Manufacturing Industry in Mexico
Historic Facts

• The development of the aerospace industry has
  been intensive during the last 5 years.

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Aerospace Manufacturing Industry in Mexico
Historic Facts

• The automotive industry provided the foundations
  for the current development of the Aerospace
  industry.

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Government Commitment

• Aerospace Manufacturing Industry in Mexico

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Aerospace Manufacturing Industry in Mexico
Government Commitment
DURING the last 5 years the aerospace industry
HAS BEEN THE NUMBER ONE PRIORITY FOR THE MEXICAN
GOVERNMENT.
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Aerospace Manufacturing Industry in Mexico
Government Commitment

• On September 18th, 2007, the Mexican and the US
  Governments signed the BASA (Bilateral Aviation
  Safety Agreement).
• UNDER THIS AGREEMENT the FAA (Federal Aviation
  Agency) recognizes the General Direction of Civil
  Aeronautics (MEXICO) as an agency with full
  capacity to certify any product or service of any
  corporation.

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Aerospace Manufacturing Industry in Mexico
Government Commitment

• Since 2006 the government established a 0 import
  duty rate for aerospace components, regardless of
  the COUNTRY OF origin.

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Aerospace Manufacturing Industry in Mexico
Government Commitment

• On March 10, 2009 the
  . National Aeronautic
  . University had its .
  groundbreaking .
  event in Queretaro.

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Key Figures

• Aerospace Manufacturing Industry in Mexico

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Aerospace Manufacturing Industry in Mexico Key
Figures
Mexican aerospace exports (billions USD)
Aerospace companies in Mexico
Aerospace jobs in Mexico (in thousands)
Source ProMéxico with data from FEMIA
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Aerospace Manufacturing Industry in Mexico Key
Figures Imports Exports
.
Source DGIPAT with data from DGCE FEMIA
Figures in millions USD.
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The Aerospace Manufacturing Industry in Mexico
Today
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The Aerospace Industry in Mexico Today
Out of the 11 aerospace companies with
international operations listed in the Fortune
500, 7 have operations in Mexico.
KPMGs Guide to International Business
Location, 2008 FEMIA
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The Aerospace Industry in Mexico Today

• Aerospace Industry Overview
• 196 companies in 16 states.
• 80 performing Manufacturing operations.
• Over 27,000 employees.

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The Aerospace Industry in Mexico Today

• Mexico is the 10th LARGEST supplier of aerospace
  components for the US market.

Source US Department of Commerce, Bureau of
the Census
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The Aerospace Industry in Mexico Today

• The FEMIA (Aerospace Industry Mexican Federation)
  was established in November 2007 and it
  actually has 38

members or associates.
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Geographic Location

• Aerospace Manufacturing Industry in Mexico

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Aerospace Manufacturing Industry in Mexico
Geographic Location

• Northeast Region
• Coahuila (6)
• Nuevo León (24)
• Tamaulipas (11)

Northwest Region Baja California (51) Sonora
(32) Chihuahua (25)
Central Region Distrito Federal (7) Edo. de
México (5) Querétaro (14) San Luis Potosí
(6) Puebla (3)
West Region Aguascalientes (2) Jalisco ( 5 )
Zacatecas (1)
Corporations 196 States 16 Employees over
27,000
Southeast Region Yucatan (3) Guerrero (1)
Source Dirección General de Industrias Pesadas y
de Alta Tecnología, SCT, ProMéxico FEMIA
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Aerospace Manufacturing Industry in Mexico Size
of companies

• 15 corporations have over 500 employees
• 8 in Baja California
• 2 in Chihuahua
• 3 in Querétaro
• 1 in Coahuila
• 1 in Tamaulipas.

Source S.E. FEMIA
Size No. de Employers
Micro 1 - 10
Small 11 - 50
Medium 51 - 250
Large More than 251
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Main Clusters

• Aerospace Manufacturing Industry in Mexico

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Aerospace Manufacturing Industry in Mexico Main
Clusters
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Main Clusters Monterrey

• Aerospace Manufacturing Industry in Mexico

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Aerospace Manufacturing Industry in Mexico Main
Clusters Monterrey

• Mexicos top industrial city.
• 3 Sourcing Offices, 8 manufacturing companies, 1
  special processes company.
• Rolled rings for turbines, fuselage for light
  helicopters, precision machined parts, sheet
  metal, electric wire and cable.
• Still pursuing a key project to detonate the
  cluster.

Source Monterrey Aero Cluster American
Industries
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Aerospace Manufacturing Industry in Mexico Main
Clusters Monterrey

• Created on August 2009, the Monterrey Aero
  Cluster intends to transform Monterrey into one
  of the largest locations for turbine aerospace
  components by 2020.

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Aerospace Manufacturing Industry in Mexico Main
Clusters Monterrey

• Local universities are developing programs
  related to the aeronautical industry.

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Aerospace Manufacturing Industry in Mexico Main
Clusters Monterrey

• MD HelicoptersFrisaEZI MetalsTECMAQViakonExov
  aHamilton SundstrandHoneywellGE

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Main Clusters Guaymas

• Aerospace Manufacturing Industry in Mexico

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Aerospace Manufacturing Industry in Mexico Main
Clusters Guaymas
Good proximity to the US, especially to the
Phoenix and California aerospace markets.
Source Sonora Economic Promotion Council
American Industries
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Aerospace Manufacturing Industry in Mexico Main
Clusters Guaymas

• Establishment of Aerospace companies started
  over 10 years ago.
• 12 Aerospace related companies.
• Small to medium size operations.

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Aerospace Manufacturing Industry in Mexico Main
Clusters Guaymas

• Precision Machining, Electronics manufacturing
  Assembly, Investment Casting.

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Aerospace Manufacturing Industry in Mexico Main
Clusters Guaymas

• Local Universities with aerospace related
  programs.

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Aerospace Manufacturing Industry in Mexico Main
Clusters Guaymas

• Smith West, Sargent Aerospace, ESCO Turbine
  Technologies, Goodrich, Tolerance Masters,
  Precision Aerospace Products, Harco,
  ChemResearch, Parker

Hannifin, Horst Engineering, GS Precision,
Ducommun Aerostructures.
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Main Clusters Mexicali

• Aerospace Manufacturing Industry in Mexico

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Aerospace Manufacturing Industry in Mexico Main
Clusters Mexicali
Mature aerospace environment with companies
established in the city over 40 years ago.
Source Industrial Development Commission of
Mexicali American Industries.
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Aerospace Manufacturing Industry in Mexico Main
Clusters Mexicali

• Supports primarily the US State of California due
  to the proximity. (Union Free Border City)

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Aerospace Manufacturing Industry in Mexico Main
Clusters Mexicali

• 17 Aerospace related companies.
• Workforce close to 5000.

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Aerospace Manufacturing Industry in Mexico Main
Clusters Mexicali

• Manufacturing, assembly, design, special
  processes MRO operations.

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Aerospace Manufacturing Industry in Mexico Main
Clusters Mexicali

• Good aerospace educational programs provided by
  local universities linked to the industry.

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Aerospace Manufacturing Industry in Mexico Main
Clusters Mexicali

• Rockwell Collins, Gulfstream, Mexmil, Chromalloy,
  Honeywell MRTC, Goodrich, GKN Aerospace, LMI
  Aerospace, Volare Engineering.

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Main Clusters Queretaro

• Aerospace Manufacturing Industry in Mexico

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Aerospace Manufacturing Industry in Mexico Main
Clusters Queretaro
Industrial experience from metal mechanic auto
parts.
Source Secretaria de Desarrollo Sustentable,
Mexico Now American Industries.
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Aerospace Manufacturing Industry in Mexico Main
Clusters Queretaro

• Has close proximity to Mexico City . and
  central Mexico . .
  and counts with

the longest runway in Mexico.
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Aerospace Manufacturing Industry in Mexico Main
Clusters Queretaro

• Aerospace industry development started in 2006
  with Bombardier. It is CURRENTLY the only city
  with an industrial park inside of the airport.

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Aerospace Manufacturing Industry in Mexico Main
Clusters Queretaro

• Aerospace Industry Overview
• 14 Aerospace Companies
• From which we can find 1 OEM and 3 Tier one
  companies.

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Aerospace Manufacturing Industry in Mexico Main
Clusters Queretaro

• The National Aerospace University is located in
  Queretaro and operates since 2007. It was formally

inaugurated on March, 2009.
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Aerospace Manufacturing Industry in Mexico Main
Clusters Queretaro

• Supplier base is being developed, mostly related
  to Bombardier.

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Aerospace Manufacturing Industry in Mexico Main
Clusters Queretaro

• Bombardier, Snecma, Messier Dowty, Aernnova,
  Elimco, Ellison, Meggit, ITR-GE, A.E. Petsche,
  Ketema, Navair

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Main Clusters Chihuahua

• Aerospace Manufacturing Industry in Mexico

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Aerospace Manufacturing Industry in Mexico Main
Clusters Chihuahua
30 years of aerospace experience, with Honeywell
being the first company to locate operations.
Source Secretariat de industrial Development
American Industries.
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Aerospace Manufacturing Industry in Mexico Main
Clusters Chihuahua

• Union free environment, proximity to the border
  and manufacturing experience are the city key
  factors for FDI attraction.

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Aerospace Manufacturing Industry in Mexico Main
Clusters Chihuahua

• 17 Aerospace related companies with multiple
  divisions or operations, 3 OEMs and 2
  Tier ones among them.
• Workforce close to 6000.

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Aerospace Manufacturing Industry in Mexico Main
Clusters Chihuahua

• Manufacturing, machining, assembly, sheet metal,
  composites design operations.

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Aerospace Manufacturing Industry in Mexico Main
Clusters Chihuahua

• Supplier base growing based on the market demand.

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Aerospace Manufacturing Industry in Mexico Main
Clusters Chihuahua

• The CIMAV (Advance Materials Research Center)
  operates since 1994 focusing on technology
  research and industry implementation.

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Aerospace Manufacturing Industry in Mexico Main
Clusters Chihuahua

• CENALTECS (High Technology Training Center) MAIN
  FOCUS IS ON Aerospace training.

It operates since 2004 with industry- oriented
programs.
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Aerospace Manufacturing Industry in Mexico Main
Clusters Chihuahua

• Cessna, Hawker Beechcraft, Textron International,
  Labinal, Honeywell, Zodiac, Nordam, A.E. Petsche,
  TigHitco, Manoir Aerospace, CAV Aerospace.

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Summary

• Aerospace Manufacturing Industry in Mexico

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Aerospace Manufacturing Industry in Mexico
Summary
Proven capabilities for wire harnesses sheet
metal operations, machining, electronics,
assembly and DESIGN ENGINEERING.
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Aerospace Manufacturing Industry in Mexico
Summary

• Huge opportunities for composites special
  processes operations.

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Aerospace Manufacturing Industry in Mexico
Summary

• Current clients location has a huge impact on
  selecting where to establish an operation due to
  Mexicos vertical logistic infrastructure.

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Aerospace Manufacturing Industry in Mexico
Summary

• Supplier base is growing, but it is still an area
  of opportunity throughout Mexico.

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Aerospace Manufacturing Industry in Mexico
Summary

• Educational programs are developing in some
  areas, but investment in training is still
  required by the companies.

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Aerospace Manufacturing Industry in Mexico
Summary

• Cost advantages are strongly related
• to labor force.

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Aerospace Manufacturing Industry in Mexico
Summary
Efficiency and productivity has proven to be
higher in MEXICAN

• operations than at the original companies
  locations.

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Aerospace Manufacturing Industry in Mexico
Summary

• Every city has pros cons.
• IT IS VERY IMPORTANT TO UNDERSTAND THOSE
  DIFFERENCES DURING THE SITE SELECTION PROCESS.

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Aerospace Manufacturing Industry in Mexico
About American Industries

• Should you need to get your
• business case made up FAST,
• send us an e-mail at facilitator_at_aerospaceinmexic
  o.com
• or call us at our
• Toll Free 1-877- 698-3905

78
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