Posted on 04/13/2008 5:30:06 PM PDT by SeekAndFind
Miguel Angel Arreola's skilled friends used to talk of leaving this industrial state to look for better jobs in the United States. But a $200-million investment by Bombardier Inc., the world's third-largest airplane maker, is helping build an aerospace industry in this city of a million, 220 kilometres north of Mexico City.
With Bombardier's Mexican labour force expected to quintuple to 2,000 workers by 2010 from 400 in 2006 -- and with the company urging Canadian aerospace suppliers to head south -- Arreola and his peers are now in big demand.
"People who were thinking of going to other places like the U.S. are now talking about staying here," said Arreola, 28, who left a job at a telephone company to work at one of Bombardier's two sites in Queretaro. "Aerospace is starting to catch on here."
Bombardier's Mexican investment is part of a larger trend as the global aerospace sector -- including Canada's -- hunts for lower-paid, skilled workers to reduce costs.
Unions worry because these aerospace jobs -- once considered difficult to outsource because of the skills required -- are now being done by workers earning a few dollars an hour.
On a monthly basis, Bombardier's new Mexican assembly workers make about $560 US, while engineers are paid between $925 and $1,390, the company said.
"It scares the hell out of us," said Dave Ritchie, general vice-president of the International Association of Machinists in Canada. "People always said we (Canadians) are going to succeed in the high-tech industry.
"All of these other fields like the needlepoint trade could go but that was OK, because we had all these high-tech jobs that were going to sustain us.
"Now everything's at risk."
Mexico has about 20,000 workers generating about $400 million in aerospace exports for 2007, according to government figures. Queretaro accounts for about 15 per cent of these exports. By comparison, Canada has annual aerospace sales of $22 billion -- 85 per cent are exports -- and a workforce of 80,000, industry figures show.
"Mexico has potential but it's still marginal," said Serge Tremblay, general manager of the Comite sectoriel de la main-d'oeuvre en aerospatiale au Quebec, which has forecast 1,600 new aerospace jobs this year in the province.
"And it's going to remain marginal. I'm not worried."
Indeed, analysts say the spectre of an exodus of aerospace jobs from Canada and the United States is far-fetched. Mexico has neither the state research dollars to attract investment, nor the regulatory standards needed to assemble whole planes, Bombardier executives said.
But Mexico's aerospace industry has grown by 20 per cent in 2006, while 34 companies opened here in 2007, government statistics show.
Manufacturing in Mexico has allowed Bombardier to save between 25 and 30 per cent on production costs, said company executive Real Gervais. It's also bolstering Bombardier's sales in Latin America -- the turf of its regional jet rival Empresa Brasileira de Aeronautica S.A., which is reputed to have even lower labour costs.
"The Bombardier investment is significant both from a dollar standpoint and for the number of people involved," said Patrick Rider, president of the Everest Group, a site-selection specialist that helped Bombardier choose Queretaro in 2005.
"I've been in Mexico for 20 years and I've never seen as much interest in aerospace," he said.
With the textiles industry shifting production to lower-cost countries in Asia and the car industry becoming more automated, Mexico was looking to develop higher skilled, labour-intensive and well-paid fields like aerospace.
"What's changed is that the Mexican government has realized that they need an industry to replace what's going to Asia," said Michael McAdoo, product unit manager at Bombardier's second manufacturing site in Mexico.
To attract Bombardier, the Queretaro government set up a three-month aviation program at a local technical school that was modelled after Quebec's publicly run Ecole des metiers de l'aerospatiale de Montreal.
to all our canadian friends, one might remember...
what sucks for US sucks for you too.
If someone else can do the job cheaper, why expect the job will stay with you?
“I’ve been in Mexico for 20 years and I’ve never seen as much interest in aerospace.”
That’s because the nation of Mexico is populated by poorly educated people for the most part.
I am not wild about flying in an aircraft assembled in Mexico...
What I am getting at is why does the private worker/business have to compete with illegals, legals and outsourcing and imports while local, county, state and Feds need more money so that they and them can live and retire like little kings?
I like how this was right next to the story about the Angela Merkel's plunging neckline.
The public-sector wages should naturally fall, as more private-sector labor becomes available. It’s up to the electorate to be on top of things, to ensure this happens. Unfortunately, few seem to care.
I guess it would depend upon who you intend to sell your products to.
They can do it cheaper in part because they don’t have OSHA, EPA, and any other a assorted anti-corporate entities to jumpe for.
They only have to pay off a bunch of organized gangsters and assorted corrupt government officials. Much cheaper.
Exactly. Part of the total compensation package of American workers is the benefit of the OSHA oversight, etc. So Americans must be prepared to lower their wage expectations if they want these additional protectiosn.
Similarly, people near the physical location of the worksite benefit from the EPA oversight. While the costs hit US companies, it's US residents who benefit from it.
Now ask how many American workers would be willing to give up OSHA protection and go work in Mexico for competitive wages...I think they figure they have a better deal here.
Wages aren't the way to prosperity in the future...in a global market, labor is competitive, and ownership that can take advantage of the lowest costs is where prosperity lies. :-(
Never ever going to happen.
I remember reading about how after The Progressive movement got rid of Tammany Hall in New York City, everyone said it was cheaper, faster and easier to do business under Boss Tweed. Payoffs were cheaper than lawyers and permits, and way way quicker. We are dying under our own paperwork and clerks.
We are.
One of my businesses is life insurance sales.
20 years ago, when I started, an application was 4 pages. Today, the application for (essentially) the same policy is over 100 pages.
Figures are hard to pin down but there is a near consensus that Bombadier has had about $800 million in subsidies since 1982. These are said to be "repayable". So far figures of repayment are about $188 million. Again one has to be careful in taking these figures as absolutely accurate.
I know for sure that about five years ago, Bombadier had made a handsome profit on some deal or other. Yet the Liberal Government still gave them a subsidy. There were faint cries of outrage as I remember. Canadian tax-payers money used to add to their own discomfort.
Poor Canada.
Us tax serfs can be proud we are not subjects!
Socialism is a fickle and filthy whore..
I will, of course, mind my manners and will refrain from entering into "The Great Debate". That debate and it's result will either captivate or enthrall the world or maybe both. It will be the stand off between the nominees. If one person wins and I give her all due credit as a scrapper- She is a battler no less. If she goes on to become President.
All will become subjects! Flame retardant suit on.
True, but in this case it doesn't suck the same way. Most of these Bombardier jobs are union jobs in Quebec that are heavily subsized by the Canadian taxpayer. Taxpayers from the other nine provinces may be quite happy to see these money-pit operations move to Mexico.
Digressing slightly, I have to agree with the poster who mentioned the educational level of most Mexicans. It is even more abysmal than you might think. It's not just that most people are middle-school dropouts and many are illiterate -- the education received by those who graduate from Mexican public schools is of a very low standard.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.