(p. A2) Mexico has felt the downside of globalization in recent years as cheaper Asian manufacturers of everything from electronics to auto parts have undercut the advantages provided by looser North American trade barriers.
Now, Mexican officials are turning to another sector they hope will put down deeper roots: The booming North American aerospace industry.
Mexico has moved to make it even easier for foreign companies to do business south of the border. Already, big names in aerospace such as Goodrich Corp. of the U.S. and Bombardier Inc. of Canada have set up facilities there.
The nation offers proximity and easy reach at a time when aerospace giants are under pressure to hit deadlines and deliver new aircraft to customers. Aerospace officials also say they are impressed by Mexico’s deep talent pool. And if Mexico successfully bolsters its aerospace industry, it will demonstrate that skills burnished servicing the automotive sector can be transferred to higher-end industries.
. . .
Mexico’s biggest advantage may be its location. For years, major aerospace manufacturers such as Boeing Co. have farmed out a growing share of their work to suppliers in Japan, China and elsewhere. But these arrangements can make it a challenge to get finished components back to the companies’ main factories for final assembly. The choice often boils down to waiting weeks for delivery by ship or paying for costly space on a cargo jet.
With demand for new jetliners and other aircraft at record levels, however, companies are under greater pressure to cut shipping time and increase production. Many U.S. aerospace companies already have built up considerable capacity in Mexico to feed the industry’s production hub in Southern California.
For the full commentary, see:
JOEL MILLMAN and J. LYNN LUNSFORD. “THE OUTLOOK; Mexico Seeks a Lasting Share Of Aerospace Boom.” The Wall Street Journal (Mon., November 26, 2007): A2.
(Note: ellipsis added.)