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Bombardier invests in Mexican aerospace industry
Canadian businesses in Mexico see benefits in creating value chains in North America to increase their global competitiveness and access different markets. FOCAL interviewed Andrés Friedman, Manager of Supply Chain for Bombardier Aerospace in Mexico, to get a better sense of the importance of establishing local roots in key markets.
How does Bombardier see Mexico within its business development strategy?
Bombardier Aerospace set up its Mexico operation in 2006, adding to the already important presence of Bombardier Transportation. Our presence in Mexico gives us the advantage of increasing our competitiveness and having a better understanding of the Latin American market. Whether in regional, business aircraft or amphibious aircraft, we see the globalization of our industry as very positive and have been progressively extending our presence around the world directly or through partnerships. This has allowed us to take advantage of local knowledge, improve our competitiveness by reducing costs and better understand local needs.
What features of the business model Bombardier implemented in Mexico enhance the company’s competitiveness?
Our competitiveness depends on developing the manufacturing capacity in emerging economies, where some of our competitors have the advantage of already operating or having developed partnerships with suppliers. Our presence in Mexico will allow us to benefit from lower production costs, open the door to new markets and strengthen our supply chain.
What are Bombardier’s prospects in Mexico’s domestic market? Bombardier Aerospace is the market leader in Latin America for business aircraft with over 26 per cent of the installed base, including more than 175 aircraft in Mexico. Commercial aircraft placements in the region tops over 70 Bombardier regional jets and turboprops with aircraft operating in Mexico, Latin America and the Caribbean.
Last year, we welcomed Grupo Mexicana to our network of CRJ aircraft operators. From its base in Guadalajara, Mexicana Link operates 13 regional jets, while Mexico City’s Estafeta Cargo uses the same model configured for cargo operations. Additionally, the Mexican Navy and Banco de México operate different models of turboprop aircraft.
What are Bombardier’s future plans for Mexico?
We expect to grow as Bombardier’s position in the market is enhanced. The Learjet 85 aircraft program now represents an investment of approximately US$250 million for a project which will take seven years to mature, and could generate up to 1,000 jobs. This is in addition to the current 1,000 employees and contractors hired in the last few years and the original investment of US$200 million made in equipment, buildings and start-up costs for the period 2005-2012.
Our facility in Querétaro, Mexico will manufacture the fuselage, wings and electrical harnesses for the Learjet 85 aircraft. All of these components will be shipped by truck to Wichita, U.S., for final assembly, interior completion, test flights and final delivery.
Despite the recession, construction of the new Learjet 85 aircraft facility in Querétaro is progressing according to plan. We expect to install equipment and tooling in the new facility in the second half of 2010. The early stages of production are scheduled to begin thereafter. Bombardier keeps investing in its new aircraft programs to position the company for growth.