Entrada Group whitepaper explains why the aerospace industry is flocking to Mexico for manufacturing

June 22, 2011 - PRLog -- It also reveals why that country is becoming a manufacturing destination of choice for the global aerospace industry.

According to the report, produced in collaboration with the President of AeroShores Management Consulting, Luc Beaudoin, a former executive with Bombardier, multiple factors are driving aerospace OEMS and their suppliers to the low cost manufacturing environment of Mexico. These include geo-politics, an increasingly competitive marketplace, and important changes in sourcing and supply chain practices.

Entrada Group’s (http://www.entradagroup.com) whitepaper explores aerospace manufacturing from the basic assumption that a great majority of aircraft products are still destined for North America. As the paper states: ‘Even though significant market growth is anticipated in the Middle and Far East, North America remains center stage of the aerospace industry and will remain one of the main markets for civilian and military airplanes for decades to come. Despite the fact that there are now many emerging low-cost countries available to OEMs, the installed bases of OEMs and suppliers make North America one of the main manufacturing clusters of the world.’

“The industry has acknowledged the increasing need to hedge the manufacturing costs of its products to the currency in which the products are being sold (largely the US dollar) and the need to establish manufacturing capabilities closer to its new clients,” explains Beaudoin. “This fundamental factor explains the surge of European aerospace investments in North America and in Mexico.”

The report goes on to explain that if, in order to remain competitive, a manufacturer requires a lower cost production option, mature supply chain logistics and a highly skilled and stable labor force, then Mexico should absolutely make the ‘short list’ of countries for offshore or nearshore consideration.

“A final critical factor is the business environment,” states Doug Donahue, Principal and V.P. of Business Development, Entrada Group. “So within our whitepaper, we felt it important to assess the business climate in Mexico vis-à-vis other low cost destinations. With Mexico’s introduction of the Maquiladora business model in the 1960s, and the enactment of significant trade agreements such as the North American Free Trade Agreement (NAFTA), Mexico continues to be a prime supplier of products for sale to the U.S. and other global consumers.”

For a copy of the whitepaper, please contact Doug Donahue at ddonahue@entradagroup.com .