1. INTRODUCTION

The aerospace industry is one of the most important and complex in the world. The nature of what the industry entails demands technological innovation as well as the continuous training of its workforce. It also requires great awareness of the production processes found in this industry upon which human lives depend.

According to the National Strategic Aerospace Program (^{Secretaría de Economía, 2012}), this industry’s global value chain is divided in various segments: aircrafts and their parts; aircraft engines and their parts; avionic and electrical-electronic systems; maintenance, repair and overhaul (MRO); simulators and training; armaments, space, etc.

The high level of technological sophistication, which is apparent in the final product and not necessarily in the making of easily manufactured small parts, has resulted in these segments being sent to a variety of locales around the world, sites which have fostered and created the conditions necessary to undertake and develop this manufacturing process.

The main goal of this article is to analyze the situation, the characteristics and challenges posed by the aerospace industry in the Mexican state of Sonora within the national context of said industry. Towards these goals the article has been divided in various sections: introduction, the listing and description of the theoretical and conceptual elements which allow analysis and understanding of the development of the aerospace industry; the primary traits which characterize this industry at the global capitalism level and its environment at the state and national levels; a description of the methodology used and finally, the results. The work ends with the conclusions, sources used, and an appendix of individuals and businesses interviewed.

2. THEORETICAL AND CONCEPTUAL FRAMEWORK REFERENCES

Aerospace is one of the leading enterprises of the industrial sector, providing products and transportation, communication, safety and defense services (^{Morán and Mayo, 2013, p. 3-4}). To this end, through the process of globalization, aerospace has settled in various locales, giving way to “the modification of local geography of the manufacturing industry, bringing together a unique space in the global market and a wide array of diverse places dedicated to production across the surface of the Earth” (^{Boisier, 2014, p. 23}).

This meeting of the global and the local has been further emphasized in the last three decades by the liberalization of economies and their formalization in economic integration treaties such as the one uniting all of North America (NAFTA). The seed that gave birth to the centripetal movement is the flexible integrated production processes that ^{Coriat (1992)} described as product, range, elements, shipping and volume, which are highlighted in the sense that production processes are complex and impose new ways of connecting work and capital.

The tendency is for globalized companies to move ever smaller parts of their production chain to emerging countries where they are carried out by workers who have a knowledge of and control over the productive processes. This is especially true in high-tech industries like aerospace where workers (in this case in various parts of Sonora) can receive training via traditional means and communication technologies, as well as the means mentioned by ^{Baldwin (2016}), tele-robotics and telepresence. In a world moving into the fourth industrial revolution (^{Schwab, 2016}), marked by the convergence of information and communication technologies and industry in terms of the industry 4.0’s platform (^{Hermann et al., 2016}), this allows the passing on of knowledge and ideas, retrieving collective knowledge as well as that which comes from experience and expertise in production² .

The concept of the fourth industrial revolution, which originally comes from Germany in 2011 and marks a milestone in the technological race, is founded on six design principles: interoperability, virtualization, decentralization, real-time capability, service orientation, and modularity; and four key components: Cyber-Physical Systems, Internet of Things (IoT), Internet of Services (IoS), and the Smart Factory (^{Hermann et al., 2015}).

The working of these principles and components is dependent upon the development of IoT and IoS, as well as of additive manufacturing (3D printing). The reference of the industry 4.0 platform (Cluster Institute. Industria 4.0) has the objective of clarifying for the record the trends to which technological advances, such as those of aerospace, are leading us. This is not to say that these practices are homogeneously distributed within said industry, quite the contrary. They actually form part of a dynamic of “creative destruction” which advances at different levels and rhythms³ .

As the international economy evolved towards globalization, theoretical constructions arose and in turn became references which are mandatory for this kind of study. This is how ^{Porter (2000)} makes an analytic jump when, in the analysis of how to be competitive, he defines the concept of value by saying: “value is the amount buyers are willing to pay for what a firm provides them”, a statement he later complements with the concept of value chains, which he defines as “an interdependent system or network of activities” (^{Porter, 1985}). He thereby divides activities into two levels of importance: ones which dominate primary activities which include internal logistics, operations, external logistics, marketing, sales and supply; the secondary ones are support activities and form part of the company’s infrastructure, managing human resources, technological development and supply (^{Porter and Millar, 1985}).

Furthermore, we add the concept of supply chains, repeatedly used in the aerospace industry, which are defined as “the activities carried out by each point or series of actors in order to achieve the result of reliable and timely delivery of quality products at a low cost”⁴ (^{Srinivasan et al., 2011, p. 262}).

As a corollary to this ensemble of theoretical instruments used to understand the aerospace industry, we refer to the works of another specialist:

A commodity chain refers to the wide range of activities involved in the design, production, and commercialization of a product[...]the commodity chains aimed at producers are those in which large manufacturers, commonly transnational, play a central role in coordinating production networks (including links forward and backward along the chain). This is characteristic of technology intensive and capital industries, such as the automotive, airplane, computer, semi-conductor and heavy machinery industries (^{Gereffy, 2001, p. 14}).

The contribution which substantiates to this author’s approach is related to the internationalization of production chains via networks established between mother companies and micro, medium, and large companies which “help” weave together the different areas of production in order to achieve the final product.

The concepts taken into consideration, the aerospace industry, localities/regions and globalization, flexible productive processes and supply and value chains in each area of the global production chain, are key to understanding the organizational dynamic of the companies which relocate their business processes in an effort to weave their productive processes across the globe together to create a cohesive whole. Said processes are being buttressed by the technological logic surrounding globalization and the advances in tele-robotics and telepresence, and sheltered by the industry 4.0 platform which currently finds itself in expansion.

3. CONTEXTUAL ELEMENTS

The Aerospace Industry in Mexico

The 1990s marked the beginning of the aerospace industry which has shown a noticeable growth in the 21st century (see Table 1), and whose future forecasts boast rising investments, companies and jobs until 2020.

Table 1 Quantitative Extent of the Aerospace Industry in Mexico (2004-2020). 

Source: Created by the authors based on data from ^{FEMIA 2013}.

In Map 1 we can see that by 2013 a structure for relocation had been created and has been sustained until the present day (2017). The number of aerospace companies was 267, concentrated in five states (75.28% of the total), with four border states standing out and the rest spread across 13 different states of the Mexican republic. According to the information from the Ministry of Economy, by 2015 the number of companies had grown to 300 spread across 18 states, accounting for more than 43,000 jobs. The five states with the greatest number of companies are: Baja California (71), Sonora (52), Chihuahua (35), Querétaro (41) and Nuevo León (32) (^{Quintana and Ortigoza, 2015}).

Source: Department of Heavy and High Technology Industries (MoE), Promexico, sourced from ^{FEMIA (2013)}

Map 1 Location and Distribution of the Aerospace Industry in Mexico (2013). 

If one of the objectives of the aerospace industry is to arrange itself into groupings or clusters where the companies can divide the labor, feeding each other with regards to consumables, parts, components, assembly and the use of labor, the reality is that in some states, they only share a geographical space and are far from being a cluster or grouping in the strictest sense as they tend to be individual companies which work in an isolated manner. In this sense the Mexican Federation of Aerospace Industries (^{FEMIA, 2013}) indicates that it is an industry with a high clustering potential. In Table 2 one can observe the different groups of the aerospace industry.

Table 2 Mexico: Main Groups within the Aerospace Industry (2013). 

Source: Created by the authors based on data from the sources cited. The number of companies corresponds to map 1.

The companies found in Map 1 divide their activities into three areas of production as can be seen in Table 3: 79% dedicate themselves to manufacturing, or rather making and assembling components and parts for aircrafts; 11% to service and repair and 10% to research and design.

Table 3 The Aerospace Industry´s Structure in Mexico (Companies´spheres of activity). 

Source: Ministry of Economy (2012).

This industry’s production ability has led it to become the sixth largest provider for the aerospace industry in the United States with an estimated value of $7.5 billion dollars in 2017, a figure 18% higher than that in 2014, and generating 34 thousand jobs. The goal is to achieve the complete aircraft manufacturing cycle, from engineering and design, to making parts, maintenance, assembly and finally recycling (^{Garcia, 2017}).

The activities in which each of these aerospace groupings is specialized is broken down into various stages of the supply chain. According to the National Strategic Aerospace Program (^{Secretaría de Economía, 2012, p. 9}) “the Mexican aerospace industry is focused on basic activities across all segments, in other words, it is a Tier 1 and Tier 2 aircraft component provider”.⁵

In a general assessment of the state of the aerospace industry in Mexico, certain elements such as the following stand out: in general terms it is a new industry which started operating in the 1990s. It is a highly complex industry due to the technological sphere which sustains it. It entails diverse production chains and demands professionals and technicians who are highly qualified in the subject and requires a level of collaboration between the public and private sector. The level of these requirements is a basic necessity despite being an industry with varying levels of local integration in the states where they find themselves (^{Casalet, 2013}, ²⁰¹⁴).

As we mentioned before, the aerospace industry, characterized by sustaining itself on high value added production processes which can in turn result in knowledge spillovers via its contact with local economies, is focused in Mexico on the different stages of manufacturing, maintenance, and repair. Nevertheless, the levels of co-location are different in each part of the country (Villareal et al., 2016, p. 170-172).⁶

The Aerospace Industry in Sonora

The current path of industry in the state of Sonora dates back to the 1960s. There are two major landmarks in its history: 1) the establishment of the Ford plant and complementary businesses in Hermosillo back in 1986 and 2) the offshoring of the aerospace industry in the 1990s. In both cases they found a climate defined by its proximity to the United States, the construction of industrial parks and buildings, the rise of outsourcing companies, favorable public policy and the training of human capital in institutions of higher learning.⁷

With regards to geographical distribution, if the activity of maquiladoras holds a special place in the economies of border towns and territories, the current dynamic is to relocate to coastal areas or in the mountain ranges of the state. The aerospace industry’s relocation towards the center or the south of the state in particular stands out (^{Bocanegra and Vázquez, 2010, p. 137-143}).

The growth is quantitative, as is the specialization of this industry in the construction of aerostructures, turbines and MRO (see Table 4). It is estimated that exports totaled 190 million dollars with the primary destination being the US (^{García, 2017}).

Table 4 Aeronautics Industry in Sonora. 

Source: Created by the authors based on information from Ministry of Economy from the State of Sonora (2016).

Nevertheless, in the context of a national industry which is concentrated in five states (Baja California, Sonora, Chihuahua, Querétaro and Nuevo León), previous studies show that despite the number of companies operating in Sonora, its technological profile is low and it is far from operating at the level of the industry 4.0 platform. It is also far from being part of co-location models found in clusters linked to the aerospace industry, or rather “there is no statistical evidence to think that the aerospace industry is geographically attracted to other industrial sectors in the region” (Villareal et al., 2016, p. 192).

4. METHODOLOGY

Broaching this subject of study requires establishing quantitative reference points. It essentially requires the use of a qualitative methodology which allows one to look into the breaking down of the different productive areas and the value and supply chains in global productive processes.

In this case we followed a qualitative methodology of a structural nature, a methodology supported by the analysis of the selected contexts relevant to the topic of research. From these, individual cases were chosen, taking into consideration aspects like heterogeneity/homogeneity and accessibility. The selection was made through personal networks and contacts, i.e. individuals whose familiarity with the field and specific personal and social networks allowed for access to collectives which would have otherwise have been unreachable. The samples were not detailed beforehand but rather were configured on the go as the research process unfolded (^{Olas, 2016}, p.26).⁸

The process of a methodological technique began with looking into the then current state of knowledge on the topic using a variety of sources such as books, articles, chapters in books, official documents and web sites. This search revealed that research into the aerospace industry in Sonora is still in the nascent stages⁹ . Afterwards came fieldwork interviewing public functionaries from the government of the state of Sonora who are involved in promoting, attracting and helping establish the aerospace industry. From the interviews stemmed a need to carry out a trip around the state in order to gain a perspective borne of first hand contact with the industrial parks and companies dedicated to aerospace production. As part of this stage we made contact with managers at some of the companies, getting them to commit to future interviews.

The average number of aerospace companies in Sonora between 2000-2016 was 36, a number which grew to 45 in 2013 and 60 in 2015. Due to the shifts in the industry (companies moving in and out of the region), which obviously affect the numbers, the figure which homogenizes and represents stability for the sample is that found in the National Strategic Aerospace Plan: 36 companies. From this group the 12 companies most often mentioned and which make up 33.3 of the sustained average for that time period, were chosen for interviews.

Two semi-structured questionnaires with in-depth questions were prepared simultaneously. The first had 15 questions and was given to state functionaries from Sonora, covering three main topics: government policies designed to attract aerospace investments, the strengths and weaknesses which the government perceives in driving the industry forward and the challenges that it represents for the state. The second questionnaire, comprised of 30 questions split into four topics, was given to managers at the companies selected (or the representatives they chose for this purpose). The topics broached were: the company’s primary profile (origin, type of production, consumables, and the destination of their products), productive processes (flexibility, innovation, their tier and insertion in their production chains and safety), workforce profile (jobs, education, hiring process, salaries, training) and challenges and vision of the aerospace industry’s future (see Appendix 1 for the companies studied).¹⁰

5. RESULTS

6. CONCLUSIONS

The current industry in Sonora is led by the electronic, automotive and aerospace industries which have varying levels of development. Even though their processes are on par with the general global economy, they are far from finding themselves at the front of creative destruction. Such is the case with the aerospace industry, whose production to operate and support the space and military industries, air transport and communications, finds itself at the level of manufacturing, maintenance and repair.

In Mexico, the aerospace industry is spread across 18 states of the Republic, but five groupings stand out with four of those corresponding to states bordering the US. One of those is Sonora, where the industry’s establishments have changed in time and space, as their strategical location at the border, particularly in Nogales, faced challenges related to problems with the city’s basic infrastructure and a lack of training in the workforce provided by the institutions of higher learning. This motivated the companies to move towards the center and south of the state (Hermosillo, Ciudad Obregón, the conurbation that is Guaymas-Empalme) where the right conditions exist for the industry to grow: available land, industrial parks, an environment of institutionalized support on the part of the government, logistics for transportation limited not only to land but with access to the port of Guaymas and the airports of Hermosillo and Ciudad Obregon, as well as proximity to the technical and higher learning institutions and primary research centers of the state.

This has allowed the creation of a mass of tacit and codified knowledge which has potentiated the possibility for expansion and greater complexity to move the companies to higher levels in the supply and value chains. Nevertheless, there exists a gap separating the technological deployment of the age of tele-robotics and telepresence and the knowledge and conditions to be able to insert themselves at the height of new knowledge to develop the industry 4.0 platform.

According to the main players in the industry, the managers interviewed, the companies currently operating have a high level of flexibility in their production processes in order to be able to attend the diverse requirements of the market and are facing the challenge of surpassing the limits of their knowledge in order to deploy the production process at its full potential. Nevertheless, the general opinion is that the human resources involved in the industry are lacking experience as well as a proper education in the skills that the industry demands.

An additional element is the integration of women in the production chains. In the company Federal Electronics in Hermosillo, 95% of the personnel are women while the majority of managers are men. This is an important factor for strengthening the industry for many are of the opinion that the competitive edge afforded by women in some segments of the production chain is superior to that of men.

A key point for the industry to be a factor in regional development is the level of integration and the generation of spillovers with local and regional supply and value chains, in order to leverage the competitive advantages to be had in Sonora. Until now, transnational companies have taken advantage of the comparative and competitive advantages that the state offers, while regional or national economic agents have lacked the strength to foster cooperation and the creation of networks needed to form to an industrial conglomerate.

Said weakness in the industry is also linked to the isolation in which it works: on the one hand, the technician or worker only knows his part of the production chain, ignorant of the structure in which they play a part. On the other hand, the worker is ignorant of the how’s and why’s of how more developed clusters in the country are developed.