Safran’s recently announced $75 million investment in a new factory in Mexico is part of the French engine maker’s concerted response to meeting the exceptionally high levels of demand for the Leap engines it produces through its CFM International joint venture with GE Aviation. By the end of 2017, the new plant at Queretaro, 125 miles north of Mexico City, will start producing 3-D woven composite fan blades for the Leap turbofans. By 2021, the facility, which is being built in partnership with U.S. company Albany International, is expected to reach an annual output rate of more than 20,000 blades.
Working alongside its sister factories in Rochester, NY (GE Aviation) and Commercy, France (Safran), the Queretaro facility will produce around one third of all Leap fan blades. Safran CEO Philippe Petitcolin told AIN that the Mexican site was selected over an alternate location in China after CFM committed to support a collective production rate of 60 aircraft per month for the Boeing 737 Max and the Airbus A320neo narrowbodies. The total order book for the Leap engines, which also will power China’s Comac C919 airliner, stands at around 10,000 units.
Mexico offers hourly labor rates of around $5 that are comparable to those found in China. The supply of skilled labor is well backed up by the availability of specialist schools near Queretaro. Safran and Albany believe they will be able to produce the blades for a cost of between 20 to 30 percent less than at the U.S. and French factories (not including the cost of materials). All three factories will have the same production machinery.
Safran will have spent approximately €1.25 billion ($1.38 billion) on developing the Leap engine, and Petitcolin declared himself to be fairly calm about keeping within budget. “I’ve got a few orange alerts on this, but nothing that’s a red alert,” he told AIN. Production is now transitioning from the CFM56 engines that powered the previous generation 737s and A320s, with total output of the Leap expected to reach 100 motors this year, rising to 500 in 2017, 1,200 in 2018, 1,800 in 2019 and 2,000 in 2020.
Today, 20 years after its first involvement in Mexico, Safran employs a total of 6,000 people in Mexico across 10 factories (not counting the new facility). These include plants operated for the following five subsidiaries: Snecma, Turbomeca, Morpho, Messier-Bugatti-Dowty and Labinal Power Systems.
Over the past 10 years, Safran has invested more than $1 billion in Mexico. Most recently, it spent $40 million to open a new Queretaro facility for its maintenance, repair and overhaul facility Snecma American Engine Services, which is doubling in size. The Messier-Bugatti-Dowty landing gear plant in the same city is being expanded through 2018.
The company’s existing Snecma Mexico subsidiary already produces parts for the CFM56 engines. By 2020, Leap production will account for 80 percent of the group’s overall activities in Mexico.
The existing Queretaro facility is being expanded by around 30 percent and the workforce there is increasing from 400 to 600 by 2020. Meanwhile, its sister factory at Suzhou in China, which also makes parts for the Leap engine, is also being expanded.