FLY ON

Mexico 2016 | DEFENSE & AEROSPACE | VIP INTERVIEW

TBY talks to Daniel Parfait, Director General of Safran, on contributing to the growth of the aerospace sector.

How has Safran contributed to the growth and development of the aerospace sector in Mexico over the last 20 years?

Our contribution is multifaceted and includes direct investment, training, technology transfer, creating jobs, and ensuring that people working for us have good jobs that challenge and satisfy them. We now have 10 sites with production, MRO, and engineering operations on each. We will open two new sites in February 2017, and we have announced a new facility that we will be building as well. We also make an important contribution in terms of training by contributing to UNAQ in Queretaro, where we provide our CFM56 engine model as well as landing gears. This allows us to attract qualified people to work at plants in Queretaro after graduating. We also have close cooperation with the Lycee Francais in Mexico with a dual program that involves study at the Lycee and also on-site experience at our plants in Queretaro. We work closely with the Education Ministry in Mexico to send people to our plants in France, and when it comes back we welcome it at our facilities.

What makes Mexico attractive for foreign investors?

The geographic position is a key factor. Mexico is the perfect base for supplying the North American market. One of our main clients is Boeing, which shows how being here is advantageous for business. In Queretaro we produce landing gears, and we also have engine and MRO facilities. Secondly, Mexico has an excellent and skilled workforce with a strong industrial structure and a very big automotive and aerospace base. We also do electrical wiring for many companies around the world, and we have 4,300 people working in our Chihuahua facility alone, which is currently the most important wiring facility in the world. This is a place where companies can create sophisticated high technology products for the aerospace industry at good rates, and it is well positioned to export around the world, especially to the North American market. Our work force is itself part of the innovation process, as innovation should not be limited to just the top tier of engineers and researchers. Another point is the close cooperation we have with the federal and local governments. Whenever we plan to invest somewhere, Mexico enters into competition with other countries like Malaysia or China. One of the factors that enables Mexico to win those investments is the close cooperation with the federal and local authorities, which ensures support for factors like where we can build our facilities, concessions, training people, taxes and tariffs, and utility costs.

Which of your three core business segments is most important in Mexico?

Our three core business segments are aerospace, defense, and security. We have a strong presence in aerospace and security, and we want to further develop our presence in the defense sector as well. We have plants in Chihuahua and Queretaro, and in Mexico City we also have our Turbomeca helicopter facility, which produces 600 engines each year. In security, our company Morpho has a strong presence in Mexico as well as the region. I see growth possibilities in all of our core businesses.

How much of your business in Mexico is focused on Latin America rather than the US?

Mexico is also well located to reach the Latin American market. In Chihuahua, we do electrical wiring for many companies, and not just North American companies. We do the wiring for the Boeing 737 and also for the Airbus 380s, but we also do wiring for Embraer and other Latin American companies. At our Safran MBD facilities in Queretaro, we do MRO for Latin American companies as well. We are obviously close to the North American market, but we are also interested and active in developing our links with the Latin American market. Mexico is our third largest operation in terms of employment after France and the US. Considering that we are in 16 countries around the world, Mexico is an important strategic platform for us and I am optimistic about growth here. We are growing fast and today we are number one in terms of employment in the aeronautics industry in Mexico.

How important is R&D and innovation for Safran?

This is a crucial issue and the most important part of our job. At Safran and other similar aerospace companies, we are building the future in 10 sectors, which requires constant work. We dedicate 12% of our turnover to R&D, which is huge in this industry, but this is what will enable us to be the best in the world in all of the sectors in which we operate. In France, we are the number-two company in terms of patent registrations, and we are considered one of the hundred-most innovative groups in the world in terms of patents. Innovation is at the core of our business and in terms of what our group is able to do, and it is at the core of our vision for the future. This same innovation is happening here and adding know-how and technology to the Mexican industry. In Chihuahua, we have internal services with around 300 engineers and we are working on design and innovation for all possible companies. When we plan to build a facility in Queretaro, it will be the core of the business for us for the coming years. After establishing our partnership with GE in the 1970s, we made the most sought-after engine in the world; a plane with this motor takes off every two seconds worldwide. We are preparing the new generation now called Leading Edge Aviation Propulsion (LEAP). We are fabricating the first models for the 737s, all of which have this motor. Airbus 320s have a choice, but 50% of the airlines take our motors. This motor will also power the new Chinese plane. We have Leap 1, Leap 2, and Leap 3, and these new motors already have 10,400 orders. That is unprecedented in the history of aeronautics, and this puts a lot of pressure on us, which is why we are building a third facility in Queretaro. By 2020, we want to have produced 2,000 motors, and we have already started building the facility. We are bringing new technology into Mexico to face the new challenges that constantly arise in the aeronautics industry. The motor reduces emissions and fuel consumption by 50%, and in addition it is a much quieter engine. This engine will push Mexico to the forefront of aeronautics for the coming 20-30 years.

Is Mexico is doing enough to ensure that it has the qualified people to be able to deal with this kind of high technology?

We have been working for a year to prepare people to work in our facility, which we have done in close cooperation with the federal and state authorities. We will be prepared once production gets online. This is the only way to continue attracting investors to come to Mexico, especially in a sector like this. With government support and the high skill level of the local workforce, companies and workers will continue wanting to come here.