Mexico highlights its business-friendly side

Farnborough Air Show » 2010
July 20, 2010, 6:59 AM

ProMexico, the government agency in charge of promoting trade and investment for Mexico held a seminar here at the Farnborough airshow to promote the “Hecho en México” (“Made in Mexico”) label, highlighting the benefits of building factories and maintenance workshops, as well as research-and-development (R&D) offices in that country. ProMexico officials claim the locale compares favorably with China if all costs are factored in. The number of aerospace companies established in Mexico is growing very fast, it said, rising from 193 in 2008 to a projected 300 this year.

According to Eduardo Medina Mora, ambassador from Mexico to the UK, time to market for a North American or a European company wanting to create a manufacturing facility in a lower-labor-cost country is shorter in Mexico than in China.

ProMexico documents don’t hide from the fact training is more expensive in Mexico than in the U.S., however, because of such factors as the language barrier and possible differences in education levels. However, the situation may be much more complicated in China, they indicated, starting with finding expats who speak excellent Chinese–a rare and expensive commodity.

Addressing its aviation industry, Luis Olive, ProMexico’s head officer for international trade and investment, said Bombardier’s assembly line for the Learjet 85 business jet composite fuselage will be ready by year-end. For aircraft parts manufacturing, he said, Mexico claims its 2008 cost index stood at 77.8, while that of the U.S. was 100, and Germany’s and Japan’s each were 113.

Manufacturing and assembly ranks first in the country’s aerospace business, at almost 80 percent, he added. Engineering services and R&D account for 10 percent, while maintenance, repair and overhaul accounts for the remaining 10 percent.

Citing statistics, Olive said 70,000 technicians and 13,000 engineers graduate from Mexican universities every year. The aerospace industry there employed 27,000 people in 2008, up from 20,000 in 2007 and 10,000 in 2006, he said, adding that Mexican aerospace exports amounted to $3.1 billion in 2008.

ProMexico insists on “simplicity of operation,” the agency said, explaining, for example, that time involved in opening a business there averages only 13 days compared with 37 in China (and six in the U.S.). It also reported that the corporate tax rate in 2009-2010 stood at 30 percent, against 25 percent in China and 40 percent in the U.S.

According to a ProMexico spokesperson, the relationship that manufacturing industries have with unions is “friendly.” As for the crime scene, the agency reported that the homicide rate is only slightly above that of the U.S.

During the show, in addition to other deals, ProMexico (Hall 3 Stand D16) has presided over the signing of memorandums of understanding to strengthen cooperation between the Mexican Aerospace Industry Federation and the Flemish Aerospace Group, as well as with the UK’s aerospace agency ADS.

Also of significance was its announcement of the 2011 launch of the Mexican Space Agency, which is to be based at Guadalajara.

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