TMASC Executive Summary

The Texas-Mexico Automotive SuperCluster (TMASC)
Bexar County Economic Development, Strategic Initiatives Division

January 2010

Copyright ©2010 Bexar County

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 and 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

The Cluster Effect
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
• PACCAR - Peterbilt
• Toyota • Caterpillar

• BAE Systems

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

Vehicles Manufactured in the TMASC Region
Cars, SUVs, and Trucks

Industrial, Military, and Recreational Vehicles

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.
SOURCE: ELM Guide, TIP Strategies, Inc., research

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 and Next Steps

The Historically Integrated NAFTA Economy
Volume of Trucks per Day To/From Mexico, 1998

Source: U.S. Department of Transportation, 1998

The Historically Integrated NAFTA Economy
Northbound Daily Truck Crossings, Laredo 1995-2009

Trucks per Day
5000

4,294 4,302
4,073 4,102 4,162
3,988
3,846 3,950
3750 3,705 3,710 3,824 3,789

3,428

2,791
2500
2,047

1250

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

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

Infrastructure
Multimodal Ports, Foreign Trade Zones

•31 Foreign Trade
Zones in Texas

•8 multimodal (rail,
truck, and air cargo)
ports in the TMASC
region

ZONA DE
CONECTIVIDAD
GOMEZ PALACIO

Foreign Trade Zones

Research & Development Assets

A Pro-Business Environment

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

Growth Outpacing Other OEM States
Net Change in Population by State, 2000-2009
600,000

500,000

400,000

300,000

200,000

100,000

0

-100,000
0 1 2 3 4 5 6 7 8 9
200 200 200 200 200 200 200 200 200 200

Texas AL GA IN MI MS MO
NJ NC OH OK SC TN VA

Texas led US in net population increase for 2009
Source: U.S. Census Bureau Population Estimates, 2009
Note: Each state included in this graphic hosts two or more OEM plants, with the exception of Mississippi (one plant)

Strength Amid Recession
Unemployment

September 2009

May 2009 September 2009

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

Strength Amid Recession
Resilient Metro Areas

Source: Brookings Institution MetroMonitor, December 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

Corporate Investment in the Region
Select Texas Projects 2009
Capital Jobs
Corporation Location
Investment Created

Toyota Assembly Plant Expansion San Antonio $100 Million 850

Caterpillar Inc. Manufacturing Facility Seguin $170 Million 1,400

Medtronic Diabetes Care Center San Antonio $23 Million 1,400

Tianjin Pipe Company Manufacturing Facility Corpus Christi $1 Billion 300-600

Union Paciﬁc Intermodal Facility San Antonio $120 Million 75

Albany Composites Manufacturing Facility Boerne $42 Million 337

L-3 Communications Aircraft Repair Facility Waco $10 Million 100

Caterpillar Inc. Manufacturing Facility Waco $30 Million 60

Grifols, Inc. Manufacturing Facility San Marcos $76 Million 190

Kalmar RT Center Manufacturing Facility Cibolo $18 Million 200

Source: Texas Comptroller, 2009

Corporate Investment in the Region
Select Northeastern Mexico Projects 2009

Capital Jobs
Corporation Location
Investment Created

Hitachi Chemical Manufacturing Facility Nuevo León US $155 Million

Sanyo Solar Panel Manufacturing Facility Nuevo León US $15 Million 600

Golden Dragon Pipe Manufacturing Facility Coahuila US $100 Million 550

Speco Aeolian Tower Manufacturing Facility Coahuila US $30 Million

Hilti Tool Manufacturing Facility Tamaulipas US $40 Million 250

Whirlpool Manufacturing Facility Nuevo León US $55 Million 1,100

Johnson Controls Manufacturing Facility Nuevo León US $105 Million 250

Luvata Pipe Manufacturing Facility Nuevo León US $40 Million

LG Electronics Manufacturing Facility Tamaulipas US $100 Million 200

Source: MPBulletins.com, 2009

Continued Automotive 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

Access to Growing Market Segments
A Large and Brand-Agnostic Hispanic Market

Texas Population
Change in Hispanic Market Share
2007-2008
1%
3%

37%
47% 2.25%

1.5%
4%
12% 0.75%

0%

Hispanic
Black -0.75%
Asian
White -1.5%
Other Source: R.L. Polk & Co., 2009

Source: U.S. Census Bureau, 2008 Estimates

Automaker Success in Mexico
30
Brand Market Share in Mexico, 1998-2009

25

20
Market Share (%)

15

10

5

0
98 99 0 0 0 1 02 03 04 05 06 07 08 D)
19 19 20 20 20 20 20 20 20 20 20 t. YT
c
9 (O
0
Source: Asociación Mexicana de Distribuidores de Automotores, 2009 20

Gen Y Enters US Driving Age Population (16-85)

Source: IHS Global Insight, 2009

Access to Tomorrow’s Customer and Workforce
Young Population Relative to Other North American OEM Sites
Median Age July 2008 Median Age 2030
Canada 39.9 Canada 43.7
NJ 38.7 SC 41.3
OH 38.1 MS 41.1
MI 38.0 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 36.0 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, (Mexico and Canada ﬁgures reﬂect 2010 and 2030 estimates)

Capacity to Lead the Industry Through Innovation
Manufacturing Tomorrow’s Vehicles, for Tomorrow’s Consumer

Diverse Vehicle Offerings:
Trucks, SUVs, Sedans, Hatchbacks, Subcompacts

Regional Expertise in R&D:
Consumer Electronics, Vehicle Safety, Telematics, Engine
Efﬁciency, Manufacturing Processes, Alternative Fuel

Technologies

Proximity to Customers and Innovators:
Growing Population, Gen Y Engineering and Design Talent

Attractive Climate for Foreign Investment
Asian Interest

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

Ideal Launch Pad for the “New Domestics”
Projected North American Output

Source: CSM Worldwide, 2009
Note: “Asian 4” refers to Toyota, Honda, Nissan, and Hyundai-Kia; “German 3” refers to Daimler AG, Volkswagon Group, and BMW.

Preserve & grow Recruit Foreign
existing industry Direct Investment

Spur innovation in Develop a next-
new technology generation workforce


Strategic Relationships

Visit www.txmxautomotive.com for more information

David Marquez
Executive Director
Bexar County Economic Development

(210) 335-0667

david.marquez@bexar.org
www.linkedin.com/in/marquezdavid

Jen T. Martinez
Strategic Initiatives Manager
Bexar County Economic Development

(210) 335-0872
jtmartinez@bexar.org
www.linkedin.com/in/jenmartinez

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

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