Texas-Mexico Automotive Update

Strategic Regional Economic Development
The Texas-Mexico Automotive SuperCluster (TMASC) Update
David Marquez, Executive Director
Bexar County Economic Development

November 13, 2009
The Mexico Group

Developed by Bexar County in Collaboration with TMASC Strategic Partners

TMASC Update

Section I: Recognizing Opportunity

Section II: Building Upon Regional Assets and Resilience
BEXAR COUNTY ECONOMIC DEVELOPMENT, STRATEGIC INITIATIVES

Section III: Attracting New Investment and Growth

Section IV: Positioning the Region for Future Trends

Section V: TMASC efforts & next steps

A Courtship of Over Two Decades...
Toyota Motor Manufacturing, Texas (TMMTX)

“If we could attract the crown jewel of manufacturing, an automobile
manufacturing plant, we would dramatically change our local economy.”
Judge Nelson W. Wolff

Suppliers to the 2007 Toyota Tundra

Source: Automotive News, July 23, 2007

Changing Geography of Assembly

* Radius centered on 430 mile main transportation corridor from Laredo to A
SOURCE: ELM Guide, TIP Strategies, Inc., research

Global Manufacturers

NOTE: Shaded region represents the NAFTA Highway.
SOURCE: ELM Guide, TIP Strategies, Inc. research

Global Vehicle Assembly Plants

9 Global Vehicle Manufacturers
Almost 900,000 Units Annually

18,000 OEM Workers

• Marcopolo • General Motors
• Chrysler
• Daimler - Freightliner • Navistar - International
• BAE Systems
• PACCAR - Peterbilt
• Toyota • Caterpillar

Tier 1 Automotive Suppliers

Over 200 Tier 1 supplier plants
Over 133,000 workers
Approx. 37 million square feet of facilities

74 Tier 1 suppliers (37%) employ 500 or more workers


Global Suppliers in the Region

Sourcing by Geography
Predominantly Texas

Predominantly Predominantly Texas &
Northeastern Mexico Northeastern Mexico


Regional Employment
Assembly Plants and Suppliers

• Approximately
151,000 employees

Legend
Number of Employees
Suppliers
Assembly Plants

* Radius centered on 430 mile main transportation corridor from Laredo to Arlington.

TMASC Update

Section I: Recognizing Opportunity

Section II: Building Upon Regional Assets and Resilience

Section III: Attracting New Investment and Growth

Section IV: Positioning the Region for Future Trends

Section V: TMASC efforts & next steps

The NAFTA Economy
Volume of Trucks per Day To/From Mexico

Source: U.S. Department of Transportation, 1998

The NAFTA Economy
Daily Truck Crossings, Laredo 1995-2009

Trucks per Day
5000

4,073 4,102 4,162 4,284 4,273
3,988
3,846 3,950
3750 3,705 3,710 3,824 3,637

3,428

2,791
2500
2,047

1250

0
1995 1997 1999 2001 2003 2005 2007 2009 (July)

Truck crossings in Laredo = 48% of TX Total

Source: U.S. Customs and Border Protection, 2009

Infrastructure
Seaports

•Manzanillo: 1/3 of
Mexico Container
Trafﬁc

•Lázaro Cárdenas:
Alternative to CA for
Paciﬁc Freight

Port of
Manzanillo
Port of
Lázaro Cárdenas

Infrastructure
Railroad
•3 Class I Railroads Serve
Texas

•12,000+ Miles of Track in
Texas

•Class I Track in Northeastern
Mexico: Kansas City
Southern Mexico and
Ferromex


Multimodal
Infrastructure

LAREDO
PORT OF

Research & Development Assets

Labor Flexibility

States with “Right to Work” Laws
Source: National Right to Work Legal Defense Foundation, 2009

Affordable Wages for Automotive Manufacturing
TX AL GA IN KY MI MS MO NJ NC OH OK SC TN VA

Helpers--production workers $9.78 90% 95% 86% 84% 81% 89% 89% 90% 89% 84% 94% 90% 89% 93%

Laborers and freight, stock, and material movers $10.56 102% 93% 89% 96% 80% 103% 85% 86% 95% 87% 101% 96% 96% 90%

Team assemblers $11.26 72% 91% 74% 80% 82% 95% 88% 90% 89% 82% 94% 77% 76% 90%

Production workers $12.12 91% 95% 61% 96% 69% 109% 86% 79% 85% 77% 118% 99% 101% 89%

Cutting, punching, and press machine setters, operators, and tenders $12.41 96% 95% 84% 94% 76% 98% 85% 90% 99% 86% 97% 91% 91% 90%

Industrial truck and tractor operators $12.57 93% 94% 82% 93% 71% 100% 91% 80% 94% 85% 96% 91% 92% 91%

Assemblers and fabricators $12.84 105% 83% 73% 77% 56% n/a 61% 87% 79% 69% 115% 106% 96% 85%

Structural metal fabricators and ﬁtters $14.28 90% 100% 82% 96% 84% 84% 87% 80% 87% 86% 98% 85% 88% 94%

Inspectors, testers, sorters, samplers, and weighers $15.48 112% 108% 96% 101% 87% 113% 90% 93% 108% 93% 88% 103% 103% 93%

Computer-controlled machine tool operators $15.54 113% 97% 98% 99% 91% 113% 106% 81% 98% 94% 102% 95% 100% 97%

Machinists $16.43 95% 103% 89% 98% 86% 96% 96% 79% 98% 95% 101% 102% 82% 91%

Welders, cutters, solderers, and brazers $17.04 110% 112% 103% 110% 93% 106% 107% 93% 104% 103% 111% 105% 109% 96%

Painters, transportation equipment $17.12 102% 93% 95% 80% 77% 102% 82% 89% 91% 91% 112% 96% 73% 76%

Electricians $19.24 102% 97% 76% 92% 70% 98% 75% 64% 107% 83% 104% 108% 96% 92%

Tool and die makers $20.46 94% 99% 86% 97% 77% 90% 87% 88% 104% 88% 103% 99% 97% 97%

First-line supervisors/managers of production workers $25.6 106% 108% 100% 108% 90% 116% 105% 90% 107% 102% 108% 100% 113% 99%

Sales Representatives, Wholesale $28.18 114% 98% 101% 103% 95% 111% 102% 83% 111% 95% 118% 106% 102% 87%

Industrial Engineers $38.69 109% 110% 116% 119% 101% 119% 113% 99% 114% 112% 116% 112% 117% 101%

Mechanical Engineers $41.38 111% 117% 125% 126% 109% 133% 118% 102% 123% 127% 121% 115% 119% 97%

Texas Avg. Hourly Wage as % of State’s Avg. Hourly Wage Source: Bureau of Labor Statistics Occupational Employment and Wage Estimates, 2009

Strength Amid Recession
Unemployment

September 2009

May 2009 September 2009

Source: Bureau of Labor Statistics; NYTimes.com; FlowingData.com

Recovery

Source: Moody’s Economy.com; MSNBC.com, June 2009

Resilient Metro Areas

Source: Brookings Institution MetroMonitor, September 2009

Strength Amid 1
2
Austin-Round Rock
Killeen-Temple-Fort Hood
TX
TX
Recession 3 Salt Lake City UT
4 McAllen-Edinburg-Mission TX
Performance 5 Houston-Sugar Land-Baytown TX
6 Durham NC
7 Olympia WA
• Milken Institute Best
8 Huntsville AL
Performing Cities Index 2009

9 Lafayette LA
• Job Creation
10 Raleigh-Cary NC
• Job Stability 11 San Antonio TX
• Wage Growth 12 Fort Worth-Arlington TX
• Technological Innovation 13 Dallas-Plano-Irving TX
14 El Paso TX
15 Wichita KS
• 9 out top 20 cities in Texas
16 Corpus Christi TX
17 Seattle-Bellevue-Everett WA
18 Baton Rouge LA
19 Tulsa OK
20 Greeley CO
Source: Milken Institute, November 2009

CNBC’s Top States for Business 2009

State Economy Tech &
Transportation Workforce
(Overall) (Rank) Innovation

1. Virginia 7 10 12 8

2. Texas 1 1 3 14

3. Colorado 5 36 11 12

4. Iowa 4 31 24 21

5. Utah 14 34 26 9

Corporate Investment in the Region
Select Texas FDI 2009

• Caterpillar Inc. in Seguin; $170 million

• Medtronic in San Antonio; $23 million

• Tianjin Pipe Company in Corpus Christi;

$1 billion; 300-600 new jobs

• Union Paciﬁc San Antonio Intermodal Facility;
$120 million

• Albany Composites in Boerne; $42 million

• General Dynamics Advanced Information
Systems; $1.9 million

• L-3 Communications in Waco; $10 million

• Baker Petrolite in Kilgore; $20 million

Corporate Investment in the Region
Select Northeastern Mexico FDI 2009

• Hitachi Chemical auto parts manufacturing in Nuevo Leon; US $155
million

• Sanyo solar panel manufacturing in Nuevo Leon; US $15 million, 600
new jobs

• Golden Dragon copper pipe manufacturing in Coahuila; US $100
million, 550 jobs

• Speco Aeolian towers manufacturing in Coahuila; US $30 million

• Hilti mining & construction tools manufacturing in Tamaulipas; US $40
million, 250 new jobs

• Whirlpool refrigerator manufacturing in Nuevo Leon; US $55 million,
1,100 new jobs

• Johnson Controls Industries auto battery manufacturing in Nuevo Leon;
US $105 million, 250 jobs
Source: MPBulletins.com, September-October 2009

Continued Investment
Toyota Moves Future Tacoma Production to San Antonio

• Preserves and stabilizes existing regional suppliers
• New direct investment - $100 million
• New direct jobs created - 850
• Job multiplier - 1:5 (including suppliers)

Chrysler to Produce Fiat 500 Subcompact in Mexico

• Chrysler likely to expand Toluca plant for production of 100,000 units
• Target market: new-car shopper, 20-35 age bracket
• W. Hemisphere market access: plans to sell 75% in NAFTA,
25% in S. America

Ford to Produce Fiesta Hatchback in Cuautitlán

• Ford re-tooling Cuautitlán assembly plant formerly producing F-Series pickups
• Production to begin in early 2010
• $3 billion investment by Ford and suppliers
• 4,500 Ford jobs
• Guanajuato transmission plant, expansion of engine plant in Chihuahua planned

Younger Population Vs. Other OEM States
Median Age July ‘08 Median Age 2030 (est.)
NJ 38.7 SC 41.3
OH 38.1 MS 41.1
MI 38 AL 41.0
KY 37.7 NJ 40.8
TN 37.7 OH 40.2
SC 37.6 MI 40.2

MO 37.5 KY 40.0
AL 37.5 MO 39.6
VA 37.1 U.S.A. 38.7
NC 36.9 TN 38.3
U.S.A. 36.8 OK 37.9
IN 36.7 VA 37.8
OK 36.1 IL 37.8
IL 36 IN 37.7
MS 35.3 NC 36.8
GA 34.9 Mexico 36.2
TX 33.2 GA 35.6
Mexico 27.6 TX 34.6

Source: Population Division of the Department of Economic and Social Affairs of the UN Secretariat, World Population
Prospects: The 2008 Revision, http://esa.un.org/unpp

Population Growth in Mexico

2005 Population 2005 Population
Mexican State
Aged 0-14 Aged 15-59
Nuevo León
1,181,971 2,600,253

Tamaulipas 880,440 1,813,632

Coahuila 764,458 1,495,796

San Luis Potosí 805,289 1,360,302

Source: INEGI Conteo de Poblacion y Vivienda 2005

Growth in Driving Age Population (16-85)

Source: IHS Global Insight, 2009


First Time Buyers
New Consumers, New Expectations

The Rise of the Hybrid & Electric Car

• Prius and Civic Hybrid among best-selling hybrids
• Escape & Highlander lead hybrid SUV sales
• GM began producing hybrid Tahoe, Yukon,
Escalade in Arlington, Texas
• Rise of Microcar Sales


Safety Features and R&D Potential

Asian Interest

• China and India OEMs in the US market a reality
• Potential FDI for TMASC
• Automotive News Oct 2009 “Chinese seen as buyers of U.S. suppliers”


Source: Marklines, 2009
Auto Industry Growth in Asia


Source: CSM Worldwide, 2009
North American Output

North American Emerging Manufacturers
Tesla
V-Vehicle
Magna
Fisker
Wheego

Preserve & grow Recruit foreign
existing industry direct investment

Spur innovation in Develop a next-
new technology generation workforce

Regional Collaboration

• Support BAE FMTV production in Sealy, Texas
• Partners: Sealy EDC, Katy EDC, Greater Houston Partnership


Strategic Relationships

Preparation for Robust Growth and Development

• State survey to
identify target zones
for automotive

manufacturing

• Launch results in
Spring 2010

• Strong tool to meet
regional development
goals

Visit www.txmxautomotive.com for more information

David Marquez
Executive Director

Bexar County Economic Development Department

T: (210) 335-0667
dmarquez@bexar.org
www.linkedin.com/in/marquezdavid

Special thanks to T.I.P. Strategies and the City of San Antonio

Texas-Mexico Automotive Update

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