Volume 13 | Issue 3 | Year 2010

Mexico has become a hot hub for aerospace activity. Attracted by numerous national benefits (e.g., enthusiastic government engagement, lower wages, etc.) global aerospace enterprises with the strongest wings flock to the country.
Essentially, what transpired with the automobile industry is now happening with the aerospace industry. Since mid-decade, Mexico’s aerospace exports have increased more than threefold. A partial list of aerospace-industry marquee names underscores the trend’s magnitude: Corporations taking advantage of Mexican offshoring (and “near shoring”) opportunities include Bombardier, Bell Helicopter, Cessna, Hawker Beechcraft and Honeywell Aerospace, among many others.

But, as with any new direction, vision comes easy. Conversely, realization is risky. So, when corporations feel the time is ripe to make the move, they turn to American Industries to facilitate the process.

Mexico’s leading manufacturing facilitator, American Industries has served companies in different sectors for more than 30 years, developing customized plans involving real estate and shelter solutions. More than 100 global corporations have benefited from the company’s experience and expertise.

With headquarters in El Paso, Texas and Chihuahua, Mexico, American Industries now optimizes aeronautics and aerospace manufacturing costs through practical, profitable offshoring and near shoring programs.

Like its clients, American Industries benefits from this new aerospace industry trend. As the company reports, Mexico rapidly emerged as a major actor on the international aerospace stage. In recent years, the country has annually exported more than $600 million dollars in aircraft parts, and is the world’s ninth-leading supplier of aerospace products to the United States. Nearly 200 international manufacturers produce these parts (which include items such as engine components, landing gear parts, audio/video systems, harnesses and cables). American Industries counts some of these manufacturers among its clients.

“Our entrance and ongoing involvement with aerospace industry development has been one of our recent key achievements,” proudly states Miguel Horcasitas, American Industries’ marketing and business development manager. “We’ve played a substantial role in the tremendous growth experienced in Mexico’s aerospace manufacturing activity.”

Indeed, a major portion of the enterprise’s recent business has involved aerospace-related companies, as the Mexican government now strongly focuses on that industry’s growth. “As withour past customers, we assist aerospace clients in setting up their Mexican operations, providing them with our numerous services and helping them take advantage of government benefits,” comments Horcasitas.

Obviously, Mexico continues to be an attractive location for extended manufacturing operations – no matter the industry. “And that’s even more so now, in the wake of the recent economic crisis,” comments Horcasitas. “To stay alive, companies need to become much more competitive, and that means reduced operational costs. Also, for U.S. companies in particular, geographic proximity to markets serviced proves crucial.”

Indeed, Mexico’s strategic geographic location proves ideal for U.S. organizations seeking to implement “just in time” systems that allow cost reductions related to transportation. As many American Industries clients have their own customers in Mexico, they need to be closer to the operation that they’re supplying.

Other attractive elements include free trade agreements, the Mexican government’s export promotion programs, and the country’s ongoing investments into highway, railway and seaport infrastructures. Then, of course, there is the wage consideration. Mexico, with its increasingly sophisticated manufacturing capabilities, boasts an increasingly skilled workforce – readily available but at a far lowered cost, in terms of salary. “That’s just one way that companies can realize substantially reduced operational expenses,” Horcasitas points out.

American Industries’ strong presence in the aerospace industry is the latest chapter in a rich, storied history. For more than three decades, American Industries has facilitated the successful establishment of international companies in Mexico.

Established in 1976 by Luis Lara (current president and chief executive officer), American Industries assisted in successful offshore start-ups for more than 100 international businesses. Efforts not only benefit clients but the various impacted regions: During its existence, the company has helped generate more than 100,000 jobs.

To accomplish its mission (the successful establishment of operations of international companies in Mexico) the company developed a service portfolio that includes industrial real estate leasing and manufacturing support in the form of “shelter” and warehousing. Further, the portfolio includes nine million square feet of leased, prime industrial real estate.

Along with its El Paso and Chihuahua headquarters, American Industries has offices and operations in Juarez, Mexico City, Monterrey, Nuevo Leon, Queretaro, Reynosa, San Luis Potosi, Silao, Tijuana and Torreon.

Establishing a new manufacturing outpost can be complex. As such, American Industries supplies turnkey solutions for Mexican-based manufacturing, proffering a business approach characterized by flexible options that enable manufacturers to reap the most from offshoring benefits.

Beyond the aerospace industry clients, the company has successfully worked with corporations such as Arrow International (now Teleflex), Georgia-Pacific, Hallmark, International Paper, Mallinckrodt, Sumitomo, Toro, Werner, and Yazaki, among many others. Specifically, it has helped these clients – and will help current and future clients – by providing critical administrative support in a new (and perhaps alien) environment that force one to encounter a different language, culture and indigenous business laws.

As a result, American Industries helps clients make the most appropriate decisions about manufacturing locations that best suit specific needs. In addition, American Industries ensures full compliance with Mexican customs regulations. Transactions (import or export) become straightforward. Thus, clients only need focus on their core competencies and concerns: production and business growth. Further, because of the nature of its services, American Industries can successfully collaborate with any sized company, large or small, that resides in any industry.

Currently, American Industries operates two main business units: industrial real estate solutions and Mexican shelter operations services. The industrial real estate division involves site selection, facilitated by experts who understand the local real estate market. Utilizing its own land reserves and strategic alliances, the division selects the best location to suit a client’s future plans. The shelter operation division finds locations, provides staff, assures compliance with legal requirements, and helps develops the administrative infrastructure.

All things considered, American Industries can get a customer’s Mexican operations up and running rather quickly, sometimes in less than two months. That’s just not PR boast; it’s reality. Further, once a client’s operation is fully functional, American Industries will step back. Its job is done. The client maintains full control of all manufacturing operations.

Globalization enhances the company’s reputation and position. As American Industries moves forward, it expands itself with an ever-enlarging focus that takes in various industries, markets and countries. “Initially, we focused on the U.S. market, but now we’re doing more business with European companies that, like their U.S. counterparts, seek to reduce costs,” says Horcasitas. “They’re looking to Mexico and, in turn, looking to American Industries, because of the services we provide.”

Previously, the new clients weren’t all that interested in moving their operations, but several factors – including U.S. competition and Euro rates – compelled them to explore new and different options that present themselves throughout the world. “That has brought them to us,” says Horcasitas.

Clients knocking at the door include those within the aerospace and medical industries. True, these are historically healthy manufacturing sectors. But the companies within these sectors realize the wisdom of a more proactive approach: They seek to make a move before they witness a compromise of their competitive advantage. “With increased globalization, companies face increasing competition not only within their own industry but within their own country and from other continents,” clarifies Horcasitas.

It’s an increasingly complex business world, and American Industries willingly shoulders much of the burden. Essentially, this is its message: Let us sweat the details; you manufacture the product. Only a bird doomed for extinction would sail past such an innovative, collaborative arrangement.

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