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European aerospace operations in Mexico

European aerospace operations in Mexico

Jean-Claude Bouche talks with Tecma about the importance of European aerospace operations in Mexico in this podcast.

Tecma Group of Companies:

Hello and welcome to another installation of Tecma Talk podcasts. These are discussions with experts from various industries on topics that have to do with manufacturing in Mexico, or things that are related to that. Today it is a great pleasure to have Jean-Claude Bouche available to chat with us. Jean-Claude is an individual that has been very active, from the European side of things,in the Mexican aerospace industry. Today we’ll be talking about the aerospace industry in Mexico from a European perspective. Jean-Claude, good afternoon.

Jean-Claude Bouche

Good afternoon.

Tecma Group of Companies:

Could you please provide the listeners with some brief biographical information about yourself, so as to inform the listeners about some of your experience?

Jean-Claude Bouche:

Yes, I was a zone director for Schneider Electric for fifteen years in Mexico, Australia, the Dominican Republic and France. I have experience in many different cultures and countries that have different types of markets and customers. For the last ten years, I have been working as the founder and CEO of an aerospace consulting firm that is involved mainly with supply chain issues between Europe, France and Mexico, and some part of the US, also. I have done a lot of conferences all over the world in order to demonstrate strategies coming from emerging countries to develop the aerospace industry like Mexico to a mature country cluster such as that found in Toulouse, as well as GAP analyzes in order to determine what has to be done in Mexico to leverage the type of suppliers that will be able to work with OEMs and primes.

Tecma Group of Companies:

That is quite a background. We can begin the conversation by addressing the first question that we have for your from a European perspective. It’s been over the course of the last ten years(pardon the pun) that the Mexican aerospace industry has taken off. How would you characterize those last ten years from your vantage point?

Jean-Claude Bouche:

It is good to start from ten years ago, because, exactly ten years ago, the start of some aerospace processes in 2004. The Mexican market already had aerospace industry present from the US that were present in maquiladora manufacturing units to produce in Mexico for the US market. This was the first model present in 2004. One of the biggest states to have developed this type of model was Baja California, which had a lot of success. In 2005, one year later, the big shot was the arrival of Bombardier. Bombardier from Canada, which is a company from the NAFTA Zone (the US, Canada and Mexico), established a plant in Mexico in the State of Queretaro in the center of the country. This was the first trampoline that was able to bring suppliers and developing business.

From 2005 until now, all the process was, as we can say now, focused by some type of OEM, or some type of prime. The biggest one was Canada’s Bombardier company, but the result was that a lot of French companies entered the market during this time. It was European aerospace operations in Mexico such as Labinal in Chihuahua, Safran and fifteen other French aerospace companies located all over the country. So it was a big start for the first manufacturing units of the Mexican aerospace cluster from Europe, principally France. Additionally, some very important suppliers from Spain, from England and other countries set up European aerospace operations in Mexico.

Tecma Group of Companies:

That’s how the entrance of European aerospace operations in Mexico occurred. Obviously, things have matured since 2003-2005, which you cited. Today, however, how would you compare development now as compared to 2005 for instance?

Jean-Claude Bouche:

If we speak about numbers, we have to evaluate quality and the type of business first. Let’s start with numbers, with statistics and with exact quantities. Today there are fifteen OEMs, primes,and Tier Ones in Mexico. This is very good for the marketplace. It is very good to know that we have a huge infrastructure for manufacturing and we have very different types of businesses in Mexico. We have both aircraft and helicopter type business. We have a different type of commercial aviation, and a lot of civil aviation and some military that is very difficult to speak about. It is very important to understand that this leveraging of the Mexican aerospace market has occurred in five different states: Queretaro, Chihuahua, Baja California, Sonora and Nuevo Leon. In each of these states there are European aerospace operations in Mexico. This is very important because geographically you have a mark that is, basically, a unit in the aerospace world. There are so many different cities and states all over the country. As you know, Mexico is a very huge country. On one side, there is a very exciting challenge. On the other side, given the quantitiies and types of business, sometimes it is a logistics challenge to be present everywhere. Because in aerospace, sometimes, you need a special process to work with an OEM or a prime. In terms of quantity it isvery important to fifteen OEMs, Tier Ones and primes. On the other side, you have more than 285 suppliers, from all different types of origins. More or less ten percent of these  aerospace suppliers are from Mexico. This begins to create a Mexican supply chain. As regards, the 300 suppliers and OEMs, you have to know that the French influence is strong. This is because the first large OEM to
hire employees in Mexico is a French company. It is a famous name. It is a very interesting challenge for French people to be present in the Mexican market, but not only for the Mexican market,but also the U.S. and Canadian market. In terms of quality, Mexico not only brings quality to its own market, which is able to be developed for local needs, but also for international needs in the NAFTA zone. The French influence in Mexico also provides service to the U.S. and Canada, which is very important, in fact.

Tecma Group of Companies:

That’s a good overview of the Mexican aerospace market today. As an individual that is working to create linkages between the market in Mexico that you just described, and Europe, and you are geographically located in Toulouse. Perhaps you can inform the listeners as to what the European aerospace market looks like at present?

Jean-Claude Bouche:

Today, evidently, Airbus’ position is very strong. In fact, being the world leader for two or three years now, the company has very good development all over the world not only in Toulouse. Also,there is Eurocopter, which is a leader in the helicopter manufacturing segment of the aerospace market in Marseille, which is about five hours from Tolouse by car. It is clear that these two clusters offer good development for all European countries, this is because the Airbus 380, for instance, is made by ten countries. This includes countries outside of Europe such as the U.S. and Japan. It is very good for businesses today to have international knowlege, including knowledge of French people, Spanish people, German people, Italian people, English people and people from Japan and the US. It is really strong development, and the positioning of orders today and for the next seven to eight years is good with the Airbus 830 and 350, with the 315 and other types of new aircraft. The present situation is really good for business. Perhaps, something is missing in the European development. What is missing is financial support from the states and from the governments to develop the suppliers, because today some suppliers are completely full with orders and jobs. Development in Europe is very expensive when compared to development in emerging countries. On one side, it is an exciting situation. On the other one, we have to think about undertaking the challenge to help support and develop all of the supply chain. With financial support, these suppliers will be able to keep up with the high increase in orders that have resulted from the development of Airbus and Eurocopter. It is a very, very interesting situation now.

Tecma Group of Companies:

You are working things from both sides of the ocean. Right now you’re physically in France, but you spend quite a bit of time in Mexico and you have family there. Going back and forth, looking at things from both sides, what’s the relationship between the European and the Mexican aerospace markets?

Jean-Claude Bouche:

I think that the new challenge is presented by something that happened in 2013. It is the new Airbus factory, which is the first one that is outside of Europe. Airbus will be present in Alabama through the presence of the new 320 plant. This will begin, perhaps, with only assembly, which is a project valued at US $7 million in its first phase. The arrival of Airbus in the Boeing market will really create a lot of opportunities for the Mexican market. The first consideration is to determine if you are able to supply Airbus from a location in France, or in Mexico, to Alabama in the US? Are the Mexican suppliers ready to compete with the US suppliers? Is the Mexican market ready to support, and to help in the development of the Airbus project in Alabama as it has the Boeing cluster in the past? It is really a new challenge, and, perhaps, the most complex. This is because the bar, now, is has been set very high. In Mexico, before 2013, a firm can be a supplier to Bombardier, which is a big target. Now, from Mexico, a company can also be a supplier to Airbus in Alabama. This is a very good situation for America, and a very good opportunity not only for Mexican suppliers, but for US providers to be suppliers to Airbus, as well. This will also be an opportunity for Canadian suppliers to migrate or expand from Canada to the US to bring their expertise to Alabama. Perhaps they already have some experience in the area of Seattle with Boeing? It is a good change for the future, and a very positive investment that has been in place since only last year. Now, in addition to European aerospace operations in Mexico, there are now such facilities in the United States. So, it is a very recent investment.

Tecma Group of Companies:

From what you described, its seems that it is very interesting in that you have a European OEM, i.e., Airbus. You are talking about Canadians supplying them. You’re talking about Mexicans sending them parts for their aircraft to be used in the factory in Alabama, as well as Americans. It seems as though there is a very high degree of international integration in the aerospace industry. As far as the future of the aerospace market in Mexico and Europe is concerned, do you see do you see that international integration increasing. If so, what are the other things that you see for the future?

Jean-Claude Bouche:

I think that there are three scenarios for the aerospace industry in Mexico: The first one is real integration of manufacturing units. Are we able to produce, in Mexico, a fuselage, or embedded systems, or landing gear and other parts of aircraft that are very critical? Are we able to do that? I think that I have a response. Today we are in a very good situation to do it. Today we are at about thirty or forty percent mature as an industry to be able to do that. We have opportunities to improve somewhat more, but it is a very good moment.
The second future will be more of investments in services. For example, in the building of an aircraft, a lot of services must be located in proximity. This means not only customer support and customer after service , but also training, certification, preparation and assessments. You need a lot of things brought to the table in terms of added-value services for the aerospace industry. There is a lot of opportunity for this in the future. Today, in Mexico, we have less than fifty percent of what the industry needs in this area in place. We have launched some kinds of services in the market. We have NADCAP in Mexico. We have AS 9001 in Mexico. We have a lot of progress in Mexico in these programs. I think that we are now fifty percent of the way there, but have some way to go. I think that this will be the fastest developing area of the aerospace industry in Mexico before manufacturing. The last scenario that I see for the future will be completely different. It will be for MRO. There is an excellent MRO center in Mexico City. Today in Queretaro you have the new Magellan Center for Delta. There is a huge building near UNAC university, which is will be a model for maintenance. It is very important, because the market in Mexico is not only for manufacturing, but it is also full of new aircraft. Perhaps this is one of the fastest growing market for all types of aircraft.
The number one market is in the US, but in Mexico there are all types of aircraft. These go from the Embraer 190 to the Airbus 320 to and 319. There is the Boeing 737, as well as the 787. There’s the CRG 200 from Bombardier. There are all types of business jets, as well. There is a presence of a lot of aircraft types and models. The people using these aircraft not only represent airline companies, they are also private parties that have business jets. There is large fleet of business jets in Mexico. The people have the need for helicopters, business jets and commercial aircraft. Mexico can have an excellent model for maintenance, repair and overhaul. This will be a key. With the new maintenance center in Queretaro, plus what has been done in the past, things are moving in a good direction. Today we are a little more than fifty percent along. These are the three key for the future.

Tecma Group of Companies:

It sounds as though an awful lot is going on. I didn’t realize that Mexico’s domestic fleet of aircraft was so diversified. All of that aside, however, I know that we have just scratched the surface on this topic. We do have a significant number of listeners. If they are looking for someone to be able to provide information, or services, from a European perspective, you would be someone, Jean-Claude that they would be interested in talking to. If there are folks that are interested in contacting you to ask questions, how would they do that?

Jean-Claude Bouche:

They can contact me by using the following email: jbouche55@yahoo.com. The can contact me via email, or by asking for me through the website.

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