Tijuana: the City With the Most Number of Aerospace Companies in Mexico
September 4, 2014
The words “Mexico manufacturing” usually conjure an association with car parts and maquiladoras in Mexico, or free-trade zone factories. Over the course of the last 40 years, however, Mexico manufacturing has expanded in what is perhaps an unexpected industry: aerospace. Today, manufacturing for the aerospace industry in Mexico accounts for 29 percent of the country’s exports and Baja California’s 65 aerospace companies, which include Zodiac Aerospace, Delphi and Lockheed Martin, make up the largest concentration of such companies. Since 2004, the number of U.S. and European aerospace manufacturers active in Mexico increased from 100 to 300, providing Mexico with the world’s fourteenth largest aerospace industry. Amongst this growth, Tijuana has become the city with the biggest number of aerospace companies in Mexico.
Part of the reason that Mexico has been so successful in growing its aerospace industry is due to the low trade barriers that exist in North America between Canada, the United States, and Mexico after the signing of the North American Free Trade Agreement (NAFTA) in 1994. In addition to low trade barriers, Shannon O’Neil argues, in a guest post to the Council on Foreign Relations, that Mexico is also competitive as a site for aerospace manufacturing due to having low labor costs (the average Mexican worker in aerospace manufacturing earns 1,000 U.S. dollars a month), economic stability, respect for intellectual property patents, and its increasing number of engineers. More recently, Mexican local and federal government bodies have worked to increase the number of incentives provided to foreign aerospace companies looking to expand or relocate into Mexico.
To celebrate the growth of this industry, Mexico has held numerous events abroad and throughout the country. Recently, at the Farnborough International Air Show that was held in London, United Kingdom in mid July, 15 delegates from the Mexican aerospace industry highlighted the growth and accomplishments of aerospace manufacturing in Mexico to a broad international audience that included investors and aerospace companies. In particular, the air show provided the Mexican delegates with an opportunity to highlight the immense growth of Baja California’s university programs in aerospace engineering that work closely to support the aerospace industry. This upcoming November, the Aerospace Forum will be held in Mexicali, Baja California. The Aerospace Forum will include an exhibition, various presentations, and opportunities to conduct business.
The growth of the Mexican aerospace industry is just one of the many commercial areas in which Mexico is attracting international manufacturing. Having signed free trade agreements with over 44 other countries, Mexico continues to expand its export industry. Amongst the companies that have recently made the transfer to Mexico is TT Electronics, a British company that supplies electric car parts and sensors to BMW and Volkswagen. TT Electronics announced earlier this year that it would relocate its production lines to Mexico from California.