ICON Case Study
The California-Based company expands manufacturing into Tijuana with a 300,000 SF Facility.
A conversation with ICON Aircraft, featuring: Thomas Wieners, Vice President of Manufacturing November 2016
Why Tijuana, Baja California, Mexico?
Meeting Demand Leads to Manufacturing in Mexico
As part of a revised production plan announced in May, ICON Aircraft decided to produce its own composite components, a manufacturing process that was previously outsourced to several suppliers. Their new Tijuana plant will focus on just that while working together with their Vacaville, California headquarters. Companies like ICON are seeing expansion into Mexico as collaborative venture allowing for greater oversight in addition to the cost savings of nearshore production.
ICON looked at Tijuana, Mexicali, and Juarez. We selected Tijuana due to the strong pool of talent, industrial infrastructure, and proximity to our California headquarters.
Investment & Job Creation
Innovating, Investing and Creating Jobs
Baja California is home to over 82 aerospace and defense manufacturers with a 28,000 strong workforce. Now considered global hub, Tijuana’s aerospace cluster boasts a nearly 50-year history supporting aerospace and aeronautical equipment manufacturing which include global powerhouses such as Gulfstream, Eaton, Honeywell and Lockheed Martin. ICON is planning to employ 1,000 people over the next three years as they ramp up production to meet demand for their innovative A5 aircraft. Universities and technical training schools in Baja California offer advanced engineering degrees, as well as work directly with manufacturers to develop training and curriculum based on industry needs.
ICON is making a significant investment in its Mexico operations. The economic impact is over $150M over the next 10 years. In addition, ICON will leverage this location to develop Mexican business partners and qualified suppliers for other aircraft components.
Logistics & Transportation Services
You Can’t Get Closer than Next Door
The daunting shipping times of products made overseas, often close to a month’s time, is what attracts manufacturers to Mexico and Tijuana. Location strategy and Just-in-time logistics get your products back to the US in days, not weeks. Along with labor cost savings, it is no surprise that Mexico has registered a growth rate in the sector of approximately 20% since 2004 and is also the 6th largest supplier of aerospace & defense products to the world’s largest aerospace market; the United States.
Tijuana’s proximity to San Diego also reduces the time and cost to ship components to ICON’s aircraft assembly facility in California.
Why ICON Chose Co-Production
Working with CPI is the Most Cost-Effective Way to Expand
Working with an administrative and shelter service firm in Mexico is the new best practice for expanding manufacturing operations outside of the United States. Manufacturers gain a strategic and cost effective advantage working with companies like CPI who handle the entire process of exploration, analysis and complete set-up. Hiring in-house site or expansion teams just isn’t cost effective anymore, especially including the added cost and time spent navigating and complying with a foreign country’s business regulatory requirements. CPI offers manufacturers a unique and innate advantage over an in-house team: the local knowledge, expertise and established network of partners..
After a thorough search of shelter companies in Mexico, ICON selected CPI because of their local expertise and cultural fit with ICON. CPI demonstrated they understood the keys to ICON’s success in Mexico and that they could execute quickly given ICON accelerated timeline.