The Highest Growth Rate on Mexico’s Northern Border

Sonora is distinguished for the creation of high quality products that are recognized around the world as the best of their kind. This has been achieved with some of the most competitive operational costs in Mexico.

Guillermo Padres Elias, the State Governor, expresses that this is an excellent time to invest in Sonora and keep intensifying the employment rate of the State: “Sonora has been projected to be the State with the highest growth rate of the northern border of Mexico thanks to the economic leadership of our entity.”

ECONOMIC DEVELOPMENT COUNCIL FOR SONORA (EDCS)

The State Government, through the Economic Development Council for Sonora (EDCS), is working to further integrate the automotive sector. Sonora’s automotive industry is highly integrated from its assembly operations to tier three suppliers, and still has a great potential for supply chain growth and development. This is one of the main reasons why Sonora is working with local suppliers to join the supply chain. Sonora has the capacity to attract major OEM’s to the State and take advantage of the more than 80 automotive companies already established there.

Enrique Ruiz Sanchez is the General Director of the EDCS and he chatted with MexicoNOW. “Our outlook for industrial investment in 2012 is extremely positive. We have diversified our industrial force in a number of different regions. We are clearly defining each of our vocations to different areas. Take for instance, the Aerospace sector in Nogales, Guaymas and Empalme is rapidly growing due to the hard and constant work that the EDCS and other local organizations are doing together in promoting these regions; in Cajeme we have software companies that are setting-up in the Sonora Soft Software Park; in Hermosillo, the Capital of the State, we have a solid automotive vocation; and in the northern cities of Agua Prieta and San Luis Colorado, a very important recovery of the maquiladora sector has taken place. In Cananea, another excellent example, Grupo Mexico will invest around US $3 Billion; this increases its capacity in production to become, if not the first, one of the largest producers of copper in the world”, he stated.

Sonora is already acknowledged as:

  • Having the most successful case in the history of Mexican industry, i.e. Ford Motor Company. The firm is recognized as the best plant in the world in terms of quality and productivity.
  • 76% local integration of all vehicle contents (53% within the supplier park).
  • 313,000 vehicles produced per year.
  • 2 car brands are produced in the State.

AUTOMOTIVE INDUSTRY

Sonora has the largest automotive cluster in the Asia – Pacific region in America and features one of the most successful stories of the automotive industry in Mexico. One of the most fuel-efficient luxury cars on the continent is built in Hermosillo by Ford Motor Company. This facility is considered by Ford to be the best stamping and assembly plant in overall terms of quality and productivity.

According to Enrique Ruiz, Sonora has evolved in a satisfactory way since the latest world automotive crisis. “We are learning,” he said, “from experience and are becoming more diversified since the recent economic crisis. Tier 1 suppliers are assuming a larger role in centralizing their sourcing for cost-reduction and regional production for ‘just in time’ and local content. Seventy six percent (76%) of the supply chain integration in every car produced in Hermosillo comes from national content of which 53% comes within Ford’s supplier park.”

Mr. Ruiz also mentioned Sonora’s huge potential in the automotive Industry: “If we take into consideration the great year we have just passed through, with a record high production of more than 2.56 million units produced in Mexico, we see in Mexico and especially in Sonora a substantial increase this year.”

Alejandro Tinoco is the Manufacturing Planning Engineering and Launch Manager for Ford. He was interviewed by MexicoNOW where he summarized Ford’s presence in Sonora: “Ford’s Hermosillo Stamping and Assembly Plant (HSAP) currently builds Ford Fusion and Lincoln MKZ midsize gas and hybrid version sedans. These products are exported mainly to the North and South American markets (The U.S., Canada, Mexico, Brazil, Venezuela, and Ecuador), and in a smaller proportion to other markets around the world. HSAP employs 3,380 workers in a three shift production pattern.”

Ford Hermosillo has been successfully operating vehicles assembly for 26 years, stated Tinoco. “Our Hermosillo plant,” he continued, “is recognized as one of the best in the world in terms of Quality, Productivity, Safety, Lean Manufacturing, and Labor Force Satisfaction, among other aspects. During the different production stages, he pointed out, several cars have been launched. These include the Mercury Tracer (1986-1988); Escort Tracer in the sedan and wagon version (1988-1996); Coupe in sedan and wagon versions (1996-2000); the Ford Focus 2×3 and 3×5 (1999- 2003); SVT and the PZEV (2002-2004) and since 2003 it has been producing the Fusion, Mercury Milan and Lincoln MKZ,” he added.

INFRASTRUCTURE

The State of Sonora is pursuing an aggressive program to grow its industrial base and propel it into high-value manufacturing sectors. This effort is supported by many initiatives, for instance:

  • Strategic investments in infrastructure
  • On-going Investment in Vocational Schools & Training programs
  • Targeted Incentives for strategic investment Furthermore, the State of Sonora is in the process of establishing an Industrial High Technology Development Institute that will include a public Vocational School. It will develop the following programs:
  • Conventional and CNC Machining
  • Sheet Metal
  • Aircraft Structure Assembly
  • Tooling / Fixture
  • And others

Enrique Ruiz Sanchez clearly defined: “We are aggressively investing in infrastructure, education, and creating government programs that will help create an even stronger linkage between academic institutions and the industrial sector, becoming more productive and competitive. We are challenging universities to develop and adapt programs of study in line with the industry.

They are being provided with new technologies, thanks to our highly qualified work force and the high availability of bilingual staff and qualified personnel who are being trained on international quality control systems.”

The EDCS Director also mentioned: “We are convinced that we can place Sonora, not only as an excellent maquiladora option, but more specifically, as the best in engineering, design and logistics.”

EDUCATION

Alejandro Tinoco from Ford’s Hermosillo Stamping and Assembly Plant (HSAP) specified: “The quality of our labor force has been, without any doubt, the most important factor in our success. We have a very highly qualified and productive workforce.

They show great discipline and a very methodic work. They are always willing to learn, take on more responsibilities and think out of the box, with the support of the Ford Motor Company Training Plan.”

A key part of the strong linkage between industry and academia is the dynamic involvement of current production plant engineers in the development of practical training courses with their handson expertise, and the educational system teaching techniques and methodology courses are designed and implemented according to particular competency needs.

Sonora offers a wide array of technological services and human capital resources through its robust education system. Our flagship manufacturing cluster is located in Hermosillo, Sonora, and ever since the Hermosillo Stamping and Assembly Plant project was launched back in 1984, it had the support of the Technological Institute of Hermosillo (ITH) and the National School of Professional Technical Education (CONALEP).

Together they have worked in conceiving the initial training programs required by what is now considered the most productive plant within Ford. Today ITH continues supplying quality human capital, but also offers assistance in specialized fields such as metrology, design and engineering, automation, and welding techniques to name a few. CONALEP now offers specialized post education training programs aimed to increase specific competencies in processes such as injection molding, extrusion, CNC machining, stamping, OSHA, among others.

Technological University of Hermosillo (UTH) was created back in 1998 and is located just “a stone’s throw” from the Ford facility. Today, it operates under the French model of education based on competencies. Students, for instance, enter a two year program in fields related to automation, manufacturing programs and production line maintenance with the option of completing a Bachelor’s Degree in Engineering.

Supplier development assistance is another way in which the educational system, currently the University of Sonora (Unison), links-up with the automotive sector. This is done through a grant awarded by the State. In addition, the Science and Technology National Council (CONACYT) is assisting small and mediumsized local companies to streamline their production systems and acquire sector certifications such as the ISO TS, as well as providing assistance in implementing Lean Manufacturing and Six Sigma.

CONCLUSION

Enrique Ruiz Sanchez, General Director of the EDCS, emphasized: “In 2012, we will continue to strategically promote the main sectors of our State in order to achieve the landing of new investments and the creation of new jobs, which translates into economic growth for Sonora. Just to mention a few, in Sonora” he continued, “…we have several industries that boost our economy, such as the Automotive, Aerospace, Agribusiness, Mining, Information Technology, among others. Having said this, in 2012 EDCS will continue to follow the path of concerted actions and focused strategies built and planned in the past two years. Sonorans are demanding high quality jobs to support their families and this year will be vital for us in order to fulfill their needs.”

“Sonora,” he explains, “is geographically located in a very strategic region which is well connected by air, sea and land to our U.S. main customers and the rest of the world. Our educational institutions are outstanding and you can easily find world class Engineering Graduates and Qualified Labor.”

Alejandro Tinoco summarized that there are a lot of opportunities in the automotive business: “We see that potential on each of the different stages of the productive chain, or on services offered for these operations. The State of Sonora has a very dynamic and positive business environment. Any company should consider this area for future expansion, as it offers manufacturing, engineering services, as well as design, communications and technology”, he said.