More than 80 people gathered in Queretaro on May 16 to celebrate the opening of a new MRO facility for CFM56-5As, -5Bs and -7Bs, a joint venture between Snecma Services of SAFRAN Group and Turborreactores SA de CV, aka ITR, of ITP Group. SAFRAN CEO Jean-Paul Herteman and ITR Chairman Jose-Manuel Manzanedo Diaz were among the executives who spoke about partnerships, engines and México.
"The inauguration of this new facility clearly reflects the importance of México in SAFRAN's international development strategy," Herteman announced beneath a white tent set up outside the shop for a morning press conference. "For our group, the dynamic Mexican economy, plus access to qualified labor in the US dollar zone, allows us to offer our services at very competitive prices while still guaranteeing OEM quality. I am sure that our current investments will spur further development and partnerships with Mexican industry."
A HOTBED FOR AEROSPACE
Queretaro is rapidly growing into an international aerospace hub thanks greatly to Bombardier, ITP, SAFRAN and Aernnova, all of which have committed to setting up shop here. Snecma Services' and ITR's new company, Snecma America Engine Services (SAMES), aims to expand servicing capacity for the CFM56 in the Americas. The JV was established in October 2006 to offer airlines and other operators OEM expertise and additional industrial capabilities. SAMES's CFM56 shop is the first in the region affiliated with the OEM. Investment is put at more than $20 million for machinery, equipment and information systems. Snecma Services will own 51% of SAMES while ITR assumes a 49% stake.
According to Herteman, the main appeals of the venture are the availability of ITR's people and resources and the fact that its facility already has two test cells. "We find their workforce very capable," he said. "There's a big pool of engineering talent in Mexico." ITR is a subsidiary of ITP Group, which comprises Sener Aeronautica (53%) and Rolls-Royce (46%). ITP is active in the areas of engineering, research and development, manufacture and foundry, assembly and testing of aeronautic engines and gas turbines. ITR's main focus has been on repairing and testing JT8D-STDs and -200s as well as TPE-33s.
"We are very satisfied with this partnership with Snecma Services, which reinforces the relations of the ITP Group with the SAFRAN Group," ITR Chairman J.M. Manzanedo Diaz remarked. "Snecma America Engine Services progresses in accordance with our objectives and ITR will do everything within its power to guarantee the success of SAMES."
The size of ITR's facility is about 18,250 sq. m. and Snecma Services will lease about 3,000 sq. m. of that space for its CFM56 operation. About 2,000 sq. m. will be used for shop activities and roughly 1,000 sq. m. will comprise offices. The SAMES staff will include a mix of employees from both companies. Certain ITR specialists will be hired as contractors under the direction of Snecma Services.
"We have more than 30 mechanics already and 20 more are now in training," SAMES CEO Francois-Xavier Foubert said. "We will train them for about four to six months before we use them. In all of our training and business activities we will speak English. This is very good for everyone because we can use the same language anywhere in the world." By the end of this year, he estimates SAMES will have more than 70 fully trained employees. Eventually it expects to staff around 300.
SETTING THE STAGE
In 2006, SAMES secured a 20-year contract with Mexicana (Mexico's largest international airline) to provide MRO services for its CFM56-5B turbofans. The company will begin work on its first CFM56 from the carrier during the second quarter. It initially will support CFM56-5s for A320s before installing additional capacity to work on the CFM56-7B that powers 737NGs. It hopes to get commitments from other airlines and leasing companies as well. It sees a strong potential for future business coming from airlines that lease aircraft. Of course the leasing market now looks favorable across the industry; by 2012, about 28% of all commercial aircraft in service will be leased, analysts say.
SAMES, strategically located in the middle of the Americas and near Queretaro International, also is well positioned to benefit from northwest Mexico's extensive communications and other infrastructure. "The opening of SAMES is an important milestone for us," Snecma Services CEO Denis Vercherin says. "We need to provide CFM customers with a network of shops that price CFM solutions to ensure that airlines get the best of the engine through the recommended parts and repairs with good TATs and good economics."
According to Vercherin, Snecma Services' main focus is to help its customers reduce engine maintenance costs by increasing life on-wing and reducing the time aircraft are on the ground. With 11 industrial sites worldwide, the company has the capacity to service up to 500 commercial and military engines per year. Last year it posted more than €692 million ($1.09 billion) in sales from more than 150 customers in 100 countries.
SAMES recently received US FAA, EASA and CAA authority in Mexico to perform engine MRO services. It will share with ITR a 1,000-sq.-m. test cell equipped with advanced data acquisition systems for CFM56s. In November 2007 the cell was approved for CFM56-5As and -5Bs and SAMES expects approval for the -7B to come near the end of next year.
DOLLARS & SENSE
Queretaro's governor, Francisco Garrido-Patron, also attended the ceremony. Patron, who assumed office in 2003, spoke about growing the region's economy, advancing infrastructure and other initiatives. "This investment in SAMES is good for the aerospace industry and it is good for the state of Queretaro," he said. "It supports my plan to encourage strong investment in the physical infrastructure here. My plan also includes efforts to improve our hospitals and parks and the quality of our drinking water. Working with universities and colleges in the region can only lead to wise solutions. So I see this as a productive investment for all of us."
Last year Queretaro accounted for about 15% of the $400 million generated from aerospace exports, according to government demographics. Aernnova, a Madrid-based aerostructures company that makes tails, wings and other aircraft sections for Boeing, Airbus and Embraer, plans to invest $134 million to build a 265,532-sq.-m. factory here.
In February Bombardier opened a 49,225-sq.-m. facility in Queretaro--an investment put at $200 million--to manufacture fuselages, stabilizers and harnesses for the Q400 and Challenger 850 business aircraft. The facility currently employs about 900 workers, but by 2010 that number is expected to double. Bombardier estimates that it can save 25%-30% on production costs here while also expanding sales in Latin America.
"The Bombardier investment is significant both from a dollar standpoint and for the number of people involved," Everest Group President Patrick Rider told the Montreal Gazette recently. "I've been in Mexico for 20 years and I've never seen as much interest in aerospace."
In January 2007 SAFRAN's Messier Services opened a 30,480-sq.-m. complex in Queretaro to support landing gear and hydraulic units manufactured by its parent companies Messier-Dowty and Messier-Bugatti as well as other manufacturers. Christened MS Américas, it handles overhauls and component repair services on Dash 8, CRJ, A330, A340, A300, A310, A320 and 737NG aircraft. It has received DGAC Mexico, FAA and EASA authorization and, in April, FAA and EASA certification for landing gear overhaul.
The possibility of SAMES and MS Américas collaborating on future projects is plausible but limited, according to Vercherin, who seemed comfortable enough with the obliquity. "Anything we can do together, obviously we will do together," he said after the press conference. "But we cannot do everything together, we have to stop somewhere, because obviously landing gears and engines are two different things."