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An update on the Texas-Mexico Automotive SuperCluster (TMASC), created by the Strategic Initiatives Division of Bexar County Economic Development
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Strategic Regional Economic DevelopmentThe Texas-Mexico Automotive SuperCluster (TMASC) UpdateDavid Marquez, Executive DirectorBexar County Economic Development
November 13, 2009The Mexico Group
Developed by Bexar County in Collaboration with TMASC Strategic Partners
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Strategic Regional Economic DevelopmentTMASC 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
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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 Arlington.SOURCE: ELM Guide, TIP Strategies, Inc., research
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Global Manufacturers
NOTE: Shaded region represents the NAFTA Highway.
SOURCE: ELM Guide, TIP Strategies, Inc. research
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Global Vehicle Assembly Plants
• General Motors
• Chrysler
• Navistar - International
• BAE Systems
• PACCAR - Peterbilt
• Caterpillar
• Marcopolo
• Toyota
• Daimler - Freightliner
9 Global Vehicle ManufacturersAlmost 900,000 Units Annually
18,000 OEM Workers
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Tier 1 Automotive Suppliers
Over 200 Tier 1 supplier plantsOver 133,000 workers
Approx. 37 million square feet of facilities74 Tier 1 suppliers (37%) employ 500 or more workers
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Global Suppliers in the Region
Sourcing by GeographyPredominantly Texas
Predominantly Texas & Northeastern Mexico
Predominantly Northeastern Mexico
SOURCE: ELM Guide, TIP Strategies, Inc., research
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SRegional EmploymentAssembly Plants and Suppliers
LegendNumber of Employees
Suppliers
Assembly Plants
* Radius centered on 430 mile main transportation corridor from Laredo to Arlington.SOURCE: ELM Guide, TIP Strategies, Inc., research
• Approximately 151,000 employees
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Strategic Regional Economic DevelopmentTMASC 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
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The NAFTA EconomyVolume of Trucks per Day To/From Mexico
Source: U.S. Department of Transportation, 1998
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The NAFTA EconomyDaily Truck Crossings, Laredo 1995-2009
0
1250
2500
3750
5000
1995 1997 1999 2001 2003 2005 2007 2009 (July)
2,047
2,791
3,4283,705
4,073 4,1023,846 3,950
3,710 3,8243,988
4,162 4,284 4,273
3,637
Trucks per Day
Source: U.S. Customs and Border Protection, 2009
Truck crossings in Laredo = 48% of TX Total
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SInfrastructureSeaports
•Manzanillo: 1/3 of Mexico Container Traffic
•Lázaro Cárdenas: Alternative to CA for Pacific Freight
Port of Lázaro Cárdenas
Port ofManzanillo
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SInfrastructureRailroad
•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
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SInfrastructureMultimodal
PORT OF LAREDO
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Research & Development Assets
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Labor Flexibility
States with “Right to Work” Laws
Source: National Right to Work Legal Defense Foundation, 2009
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%
Affordable Wages for Automotive Manufacturing
Source: Bureau of Labor Statistics Occupational Employment and Wage Estimates, 2009Texas Avg. Hourly Wage as % of State’s Avg. Hourly Wage
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May 2009
September 2009
Strength Amid RecessionUnemployment
Source: Bureau of Labor Statistics; NYTimes.com; FlowingData.com
September 2009
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Source: Moody’s Economy.com; MSNBC.com, June 2009
Strength Amid RecessionRecovery
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SStrength Amid RecessionResilient Metro Areas
Source: Brookings Institution MetroMonitor, September 2009
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Strength Amid RecessionPerformance
1 Austin-Round Rock TX2 Killeen-Temple-Fort Hood TX3 Salt Lake City UT4 McAllen-Edinburg-Mission TX5 Houston-Sugar Land-Baytown TX6 Durham NC7 Olympia WA8 Huntsville AL9 Lafayette LA
10 Raleigh-Cary NC11 San Antonio TX12 Fort Worth-Arlington TX13 Dallas-Plano-Irving TX14 El Paso TX15 Wichita KS16 Corpus Christi TX17 Seattle-Bellevue-Everett WA18 Baton Rouge LA19 Tulsa OK20 Greeley CO
Source: Milken Institute, November 2009
• Milken Institute Best Performing Cities Index 2009• Job Creation
• Job Stability
• Wage Growth
• Technological Innovation
• 9 out top 20 cities in Texas
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Strength Amid RecessionCNBC’s Top States for Business 2009
State(Overall)
Economy(Rank)
Transportation Tech & Innovation
Workforce
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
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Strategic Regional Economic DevelopmentTMASC 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
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Corporate Investment in the RegionSelect 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
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Corporate Investment in the RegionSelect 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
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Continued InvestmentToyota 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)
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Continued InvestmentChrysler 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
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Continued InvestmentFord 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
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Strategic Regional Economic DevelopmentTMASC 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
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SYounger Population Vs. Other OEM States
Median Age July ‘08Median Age July ‘08NJ 38.7
OH 38.1
MI 38
KY 37.7
TN 37.7
SC 37.6
MO 37.5
AL 37.5
VA 37.1
NC 36.9
U.S.A. 36.8IN 36.7
OK 36.1
IL 36
MS 35.3
GA 34.9
TX 33.2
Mexico 27.6
Median Age 2030 (est.)Median Age 2030 (est.)SC 41.3
MS 41.1
AL 41.0
NJ 40.8
OH 40.2
MI 40.2
KY 40.0
MO 39.6
U.S.A. 38.7TN 38.3
OK 37.9
VA 37.8
IL 37.8
IN 37.7
NC 36.8
Mexico 36.2GA 35.6
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
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Population Growth in Mexico
Mexican State2005 Population
Aged 0-142005 Population
Aged 15-59
Nuevo León1,181,971 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
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Growth in Driving Age Population (16-85)
Source: IHS Global Insight, 2009
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First Time BuyersNew Consumers, New Expectations
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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
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Safety Features and R&D Potential
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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”
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SAuto Industry Growth in Asia
Source: Marklines, 2009
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North American Output
Source: CSM Worldwide, 2009
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North American Emerging Manufacturers
TeslaV-VehicleMagnaFiskerWheego
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Strategic Regional Economic DevelopmentTMASC 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
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Preserve & grow existing industry
Recruit foreigndirect investment
Spur innovation in new technology
Develop a next-generation workforce
ww
w.txm
xautomotive.com
twitter.com
/tmasc
LinkedIn TMA
SC
Group
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Regional Collaboration
• Support BAE FMTV production in Sealy, Texas
• Partners: Sealy EDC, Katy EDC, Greater Houston Partnership
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Strategic Relationships
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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
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Visit www.txmxautomotive.com for more information
David MarquezExecutive DirectorBexar County Economic Development Department
T: (210) [email protected]/in/marquezdavid
Special thanks to T.I.P. Strategies and the City of San Antonio