* France's Safran opens two new Mexico plants
* Mexico keen to become independent power in aerospace
By Tim Hepher
President Felipe Calderon said the opening of two new plants in central Mexico by French engine and parts supplier Safran SA (SAF.PA) signalled international confidence in the country's economy as it pulls out of recession.
Safran said it was investing $150 million in the plants, in part to reduce costs and curb a dependence on the strong euro.
The plants will make parts for jet engines built by Safran subsidiary Snecma and undercarriages built by sister division Messier-Dowty, competing with Britain's Rolls-Royce Group Plc(RR.L) and U.S. equipment supplier Goodrich Corp (GR.N),respectively.
"We have decided to make a competitive production chain that will permit this country, in years to come, to fly an aircraft completely designed and built in Mexico," Calderon said in a speech, according to an official interpreter.
That goal remains some way off as the gleaming Safran plant stirs to life and Mexico embarks on a programme to train aerospace workers abroad. But Safran joins a growing list of aerospace companies looking to Mexico for lower costs along with the marketing benefits of close access to the United States, the world's largest aviation market.
The French company is already the largest aerospace employer in Mexico with 3,000 employees.
Its latest expansion, near the colonial city of Queretaro, coincides with security concerns in Mexico's north. Safran has two wiring plants in the state of Chihuahua, whose northern border area is plagued with drug gang violence.
"We have done everything that is necessary and we hope the country will resolve its difficulties as quickly as possible," Safran Chief Executive Jean-Paul Herteman said when asked whether extra measures had been taken to protect operations.
MEXICO EYES INNOVATION
Suspected drug hitmen killed an American employee of the U.S. consulate, and her American husband, in the northern border city of Ciudad Juarez, in Chihuahua, on Saturday. A Mexican man married to another consulate employee was also shot dead.
Calderon, the target of angry protests when he visited Ciudad Juarez this week, flew into Queretaro by helicopter amid tight security on Wednesday.
"We ask people to pay attention and recommend expatriates live in compounds, but this was already the case and we have not taken extra measures because of (Saturday's incident)," said Real Gervais, head of a nearby aircraft components and sub-assembly plant owned by Canada's Bombardier Inc (BBDb.TO).
Some 125 miles (200 km) north of Mexico City, Queretaro is relatively safe. It aims to capture foreign investment in high-technology jobs in electronics, automobiles and aerospace and feed into an increasingly global supply chain for aviation parts.
Although Western aerospace executives say it will be some time before Mexican factories implement their own designs, Calderon said Mexico wanted to do more than manufacture parts for foreign companies.
"We don't want to be a low-cost country, but a country of innovation," he said.
China, Russia and Japan are also challenging the duopoly held by EADS unit Airbus and Boeing in the market for passenger jets with more than 100 seats, while Canada and Brazil have long-established regional and business aircraft industries.
Safran is co-owner with General Electric Co (GE.N) of the world's No. 1 supplier of civil jet engines, CFM International. Its engines power all Boeing's 737 short- to medium-haul jets and about half of the competing Airbus A320 fleet.
The new plants will make parts for CFM engines and components for undercarriage systems to be installed on Boeing's next-generation 787 Dreamliner. (Reporting by Tim Hepher; editing byAndre Grenon)
French Firm Opens 2 Aircraft Component Plants in Mexico
MEXICO CITY – French aerospace and communications group Safran on Wednesday inaugurated two aircraft component plants in the central Mexican state of Queretaro.The plants will create a total of 500 new jobs manufacturing landing gear and represent an investment of nearly 2.5 billion pesos ($197.6 million), executives said.
The Queretaro facilities bring to nine the total number of Safran factories in Mexico, including seven devoted to aerospace, with a combined workforce of around 3,000.
Speaking at Wednesday’s ceremony, Mexican President Felipe Calderon celebrated the rapid growth of his country’s aeronautical sector.
“Today this sector is made up of more than 200 firms that generate quality jobs for around 30,000 people in this country,” he said, adding that 150 of those companies established themselves in Mexico over the past 28 months.The 300 French companies with operations in Mexico employ some 80,000 people and France trails only the United States and the Netherlands among foreign investors in the country.
Mexico’s attractions include its location and the North American Free Trade Accord, which enables many goods assembled here to enter the United States free of tariffs. EFE
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That is a great sign! Mexico has its advantages for automobile and aerospace manufacturing or any other product manufacturing. With low production costs and more advantageous production environment Mexico is the best location for companies targeting US Markets.
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