Manufacturing in Mexico Talk with Tim Meador of Incertec
Tim Meador recently spoke to The Offshore Group about the future of metal plating in Mexico for the aerospace industry, as well as that of his company.
Steve Colantuoni: Hi Tim, I'd like to ask you a few questions about the new Mexico metal plating facility that you have recently put into place. It looks like there’s a lot of work behind us, big capital investment, obviously you must see a great potential for aerospace plating in Mexico. Could you tell us a little bit about the process of starting things up? How did you find it? What went well? Where were some challenges? What kind of things you might still have to work on?
Tim Meador: Well the thing is, the metal plating industry is not new to Mexico, but being a job shop, plating, is new to Mexico. Most of the plating companies in Mexico are captured, vertically integrated companies. We are now offering that service to everybody. In offering our metal plating expertise in Mexico, we’ll be dealing with customers all the way from Nogales, to Obregon and even to as far in the interior of Mexico as Guadalajara.
Steve Colantuoni: I know that one of the things, and I've watched this occur over the course of the last decade, is that a lot of aerospace work in particular couldn't be done in Mexico because people that do what you do in a place like this have not been here to be able to service the demand that exists. This would lead me to believe today that there is a critical mass here in in Mexico's aerospace industry for you to address their needs. Would that be correct?
Tim Meador: That is correct and as a matter of fact, a lot of aerospace companies in Mexico stopped because they didn't have access these to these important capabilities. Value-added services like metal plating, heat treat, and everything related. What we’re adding to that mix is enabling them to expand their aerospace manufacturing businesses in Mexico, and giving them the savings of not having to ship parts to the States for plating or any other type of conversion.
Steve Colantuoni: So this is, again, relatively new—a job shop for metal plating in Mexico. Aerospace is growing at a good clip in terms of the amount of companies that are here. In Guaymas and Empalme the specialization is growing in aero engines. In terms of finding people in the local labor pool to be able to staff a facility like this, what was your experience? What have been your challenges? What kind of training do you give and still need put in place for your Mexican manufacturing personnel?
Tim Meador: Well, there are no experienced platers pretty much anywhere in the United States or in Mexico. Reality is that it can only be taught. To become a really good plater it typically takes over 3 years. So what we’ve done is we’ve taken the talent pool down in Mexico that’s willing to learn, and we’ve brought them up to the Twin Cities. We’ve tained and educated them. Some of our employees have even spent three months in our facility up in Fridley, Minnesota, and now they know the beginning of how to plate, and we’ll just continue to nurture them as we go along.
Steve Colantuoni: Tim one of the things that people seem to take away, and I believe to a large degree it’s a misperception about how the economies interact, but you mentioned how you have your facilities in Minnesota, where folks got trained to be able to function down here and follow business that you’re finding in Mexico that will, in my estimation, only grow. Sometimes there’s a perception that doing this kind of thing, making an investment in Guaymas, Sonora, Mexico like this is negative for the United States. My question to you is, how does your Minnesota plant interact with your Mexican manufacturing plant, and how does the existence of both of these operations reinforce the health and prosperity of the other?
Tim Meador: In my industry, metal plating is on a decline somewhere on the 4% to 6% annually, and most of that is because the work that needs to be plated is no longer manufactured in the United States. I always use the analogy of the tail of the dog,. The dog has already moved across the border; we’re just offering the metal plating services that needed here in Mexico. At our Minnesota facility, our sales are actually up 15%. We’re on a growth path there, and this additional work from Mexico is just going to help us. With the technical resources up North we’re able to support this facility, and get it up to speed and build the talent down here to support the Mexican aerospace customers.
Steve Colantuoni: So given what you say, it’s feasible that more volume of work down here will actually create some jobs in the U.S., but those probably would be for individuals that have higher technical skills perhaps?
Tim Meador: Yeah, the resources and the R&D is always going to have to be done at our Twin Cities facility. We’ll probably be adding people in the Fridley to start all the on boarding of the metal product that we’re going to process down here in Mexico. Our model is that we develop the process up in the Twin Cities, and then we develop the process instead of learning here in Mexico.
Steve Colantuoni: One last question I’d like to ask you is, obviously you saw an opportunity that exists today, what do you see going forward?
Tim Meador: To be honest with you I see another metal plating plant in Mexico in Incertec's future. I look at the United States and see an almost a dying metal processing industry. With all of the aerospace industry moving into Mexico here, and to places as far south as Guadalajara as well, I think there’s going to be a need for another plant just like this south of here at some time in the not too distant future.
Steve Colantuoni: Okay so you mentioned places further south, obviously there’s aero-engine activity that’s going on here in Guaymas, Sonora. There’s activity in Chihuahua, as well as in Querétaro. I actually heard discussion this morning that you were approached by people as far away as that state to service them from here on the West Coast on the Sea of Cortez.
Tim Meador: Yeah, it’s kind of funny. It’s because they’re shipping their product all the way to Kansas City. They actually already have the plating or conversion coating done, and just using Incertec's services here is going to save them a ton of money. I think there’s going to be a point where our Guaymas area metal plating services will be oversold. It’s probably going to happen a lot sooner than both of us think.
Steve Colantuoni: Well, for the sake of this you, for the sake of your Minnesota plant, this plant, and a future plant somewhere, I hope that’s the case. I want to thank you for taking time to speak with us.
Tim Meador: Thanks.