What is the significance of Mexico to Bombardier's global operations, particularly in terms of rail transportation?
Bombardier cannot be understood today without factoring in its Mexico aerospace and transportation activities. Bombardier's transportation plant in Mexico is the third largest in our network. We have about 1,500 workers in the Ciudad Sahagun location and each job created there typically adds two more indirectly. The Sahagun plant is the origin of our success story in Mexico. We bought the plant in 1992 and we have grown there ever since. Mexico has been key to us becoming a leader in the North American market. We currently produce a large quantity of products that we export to the US and around the world in Ciudad Sahagun. We are involved in train and metro systems in San Francisco, Chicago, New York, Montreal, Toronto, Vancouver, Beijing, Kuala Lumpur, and Riyadh, among other cities. We want to continue utilizing Mexico as a foundation for expanding towards South America, especially within the framework of the TPP and the Alliance of the Pacific. We are designing and producing a train here that will be perfect for the South American and Asian Pacific markets. We are aiming at big metro projects in Colombia, Peru, and Chile based upon our established operations in Mexico. We will simultaneously pursue projects in places like Panama, where we are adding a monorail line to the Panama metro.
Many of Mexico's major rail projects have been delayed or cancelled in recent years. Why are you so optimistic about the rail industry here?
Mexico was in some ways not ready to embrace the large infrastructural projects. In many cases, the field is asymmetrical and needs to be leveled. We want to participate in an environment that is transparent and allows for efficient competition. Bombardier is an industry leader and we are accustomed to winning contracts across the world, so the difficulties faced in the Mexican market can be particularly challenging. There is now the potential of reviving rail initiatives that have been dormant since 1994 when the government policy reprioritized its development goals. Rail projects help to recover urban areas, which can have an impact on reducing violence. Integrating transportation in some areas of cities to more productive levels creates potential for greater prosperity. Better rail transportation also has the potential to reduce greenhouse gas emissions. Given that there are 12 or more urban areas in Mexico with over 1 million inhabitants, investing in trains is one way of reorganizing interurban mobility throughout the country. There are in fact many rail development programs in place and the trend is shifting in that direction, rail but we need to see opportunities to develop light rail systems in the cities that have the potential to expand Mexico's rail network. If we take the necessary steps on our part to develop these plans, stakeholders such as government planners and many important automotive enterprises are in place to realize this vision.
What role has Bombardier played in contributing to the development of Mexico's aerospace industry?
Bombardier was the pioneer of Mexico's aerospace industry and its supporting supply chain. Our Queretaro facilities workforce is in the order of 1,500 and the average age of the workforce is about 25 years old. We have a young, committed, professional, and efficient workforce that is central in our success story. We not only assemble aerospace parts, we actually transfer important components and processes to the country. There was a reduction in personnel at the start of 2015 but we are recovering quickly thanks to the surge of Mexican productivity. We have processes in place now to produce composites for Bombardier as well as other brands and we have the Excellence Center for Electrical Harnesses, which with a 0% failure rate is among the best in the world.
What needs to be done for Mexico to achieve its goal of being one of the top ten countries in the aerospace industry by 2020?
There is a unified effort among the five major aerospace clusters in Sonora, Baja California, Queretaro, Nuevo Leon, and Chihuahua. Mexico will never arrive in the top ten of aerospace producers if we do not collaborate. It is counterproductive for these five areas to compete for the same suppliers. We need to integrate the clusters, which the country is currently doing well. The major success has been working on the non-product areas of operation. It is exciting to market our companies as makers of wings of a plane and other product related items, but there are also less appealing procedures which are nonetheless complex in the non-product related field, such as surface treatment, among others. Incremental consolidation will key factor of continued growth. The potential to rise to the top of an industry in Mexico is a rather singular phenomenon with aerospace, as well-established sectors like the automobile industry are filled with large companies in well-entrenched positions.
How would you characterize the Mexican workforce in terms of technical areas such as engineering?
One of the key elements for bringing work to Mexico after entering NAFTA was the low cost of the local workforce, however this has changed dramatically. High quality projects now require equitable compensation. This engenders a sense of loyalty between workers and their companies. When engaging in a complex technical task, our workers put forth the very best of themselves and become one with their work. This has its origins in the artisan traditions of the peoples of the Mexican lands. Building an electrical harness, putting together planes and trans, these are literally our modern artisan productions. This engagement from the people is something that is unique to the country. When given the necessary tools, our workforce is going to excel. Bombardier has more Mexicans working abroad than expats working in for us here.
Where will Bombardier be in Mexico five years from now?
We have a long-term commitment to working in Mexico. The two large investments of $200 million in transportation and $500 million in aerospace are no small feats and we continue investing locally every year. In five years, hopefully we are going to be producing more parts in the aerospace sector. We want to supply some of the most important products in Mexico. It is also our goal to convince the local authorities of the importance of developing inter-city commuter rails. Hopefully we will see Mexican airlines flying Bombardier planes throughout regional markets. Mexico has a bright future and we want to be part of it.