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Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook
Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook
Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook
Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook
Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook
Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook
Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook
Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook
Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook
Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook
Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook
Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook
Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook
Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook
Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook
Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook
Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook
Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook
Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook
Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook
Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook
Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook
Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook
Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook
Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook
Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook
Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook
Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook
Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook
Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook
Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook
Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook
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Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook

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This TMASC factbook describes the existing automotive and heavy vehicle manufacturing sector in Texas and Northeastern Mexico. Additionally, it provides a comparative analysis of the Texas corporate …

This TMASC factbook describes the existing automotive and heavy vehicle manufacturing sector in Texas and Northeastern Mexico. Additionally, it provides a comparative analysis of the Texas corporate environment with other select states.

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  • 1. THE MOST COMPETITIVE REGION FOR MANUFACTURING IN THE WESTERN HEMISPHERE TEXAS AUTOMOTIVE MANUFACTURING 2013 SITE SELECTION FACT BOOK Prepared by Bexar County Economic Development www.bexar.org Texas Vehicle & Heavy Equipment Manufacturing Overview April 2013
  • 2. Prepared by: Hon. Kevin Wolff County Commissioner, Pct. 3 County of Bexar, Texas 101 W. Nueva St., 10th Floor San Antonio, Texas 78205 USA T: (210) 335-2618 www.bexar.org
  • 3. 3Bexar County, Texas Table of Contents » This document is a factbook prepared by Bexar County. The data provides a competitive analysis of Texas that demonstrates the Lone Star State is the most strategic site for vehicle assembly and heavy equipment manufacturing. State of Texas: Top Economic Performer in U.S........................................................................ Page 5 Incentives............................................................................................................................................ Page 6 Tax Environment ............................................................................................................................... Page 9 Strategic Region: Texas-Mexico Automotive SuperCluster (TMASC).................................. Page 11 TMASC is the Capital for Truck, SUV, and Heavy Equipment Manufacturing..................... Page 12 TMASC Supplier Density.................................................................................................................. Page 13 TMASC is the North American Epicenter of Trade.................................................................... Page 16 Competitive Manufacturing Bolstered by Robust Infrastructure.......................................... Page 17 Shorter Time to Market For Large Consumer Regions............................................................ Page 20 Increase Market Share Among the Hispanic Demographic.................................................... Page 21 Texas Automotive Market................................................................................................................ Page 23 Strategic Workforce Advantages.................................................................................................. Page 24 Diverse Energy Portfolio for Sustainable Manufacturing........................................................ Page 27 View additonal data online at www.txmxautomotivecom.
  • 4. 4 Bexar County, Texas No other U.S. state is home to more Fortune 1000 corporate headquarters. Texas ranked #1 on the 2012 Fortune 1000 list with 103 companies and #2 on the 2012 Fortune 500 list with 52 firms. If Texas were a nation, it would rank as the 14th largest economy in the world based on GDP, ahead of Mexico, South Korea, the Netherlands, Turkey, and many others.
  • 5. 5Bexar County, Texas State of Texas: Top Economic Performer in U.S. » “Asastate,wewillremaincommittedtoupholdingthepillars to our success, including low taxes, restrained spending, reasonable regulations and a fair legal system...” - Hon. Rick Perry, Governor, State of Texas Texas is one of the top U.S. state economies that leads the nation in pro-business policies and international trade. Various indicators show the strength and vitality of the Texas economy. An array of industries contributed to Texas’ ability to come out of the Recession quicker than other states. Those industries include: industrial manufacturing, biotech and life sciences, information and electronics, professional and financial services, and aerospace and aviation. According to the Texas’ Comptroller’s Office, from 2001 to 2010, U.S. real Gross Domestic Product (GDP) grew by 17% while Texas’ real Gross State Product (GSP) grew by 24% over the same period. Texas replaced all of its recession-hit jobs by December 2011, adding a wide variety of jobs in industries such as manufacturing, oil and gas, and professional and business services. Texas leads the nation in exports and has for 11 consecutive years since 2002. The Texas unemployment rate has been at or below the national rate for 72 consecutive months and was 6% for December 2012. Gross Domestic Product (GDP) by State State 2011 (in millions of USD) Percent of U.S. Total U.S. 14,981,020 100% Texas (TX) 1,308,132 9% Alabama (AL) 173,122 1% Georgia (GA) 418,943 3% Mississippi (MS) 97,810 1% Tennessee (TN) 266,527 2% Source: U.S. Bureau of Economic Analysis. Texas Select Business Highlights March 2013 Texas wins Site Selection’s 2012 Governor’s Cup for having the most new and expanded corporate facilities over the past year. Texas had 761 projects in 2012, a 65% increase over 2011. February 2013 Texas dominates Forbes’ “Best Cities for Good Jobs” list. Dallas topped the list, followed by #2 Houston, #3 Austin, #4 Fort Worth, and #6 San Antonio. Cities were ranked according to recent and expected job growth, current unemployment rate, and current and expected per-capita income. January 2013 Business Facilities names Texas 2012 State of the Year because of its dynamic, recession proof economy. May 2012 Chief Executive’s 8th annual CEO Survey ranks Texas as the best state to do business for the 8th consecutive year.
  • 6. 6 Bexar County, Texas Industry Snapshot: Select Texas Incentive Package for Automotive Assembly Project Ten years ago the State of Texas and local community partners provided the following incentive package for an automotive assembly facility. Project impact: • More than $2.7 billion in direct and indirect capital investment, and • Approximately 5,700 total jobs from assembly plant and suppliers. $133M Incentive Package: • $27 million for job training and recruitment, • $15 million for a rail district, • $47 million in phased-in taxes and waived fees, • $15 million for site utility infrastructure, • $14 million for land, • $10 million for site preparation, and • $3 million for a city-provided job-training center. Incentives » The State of Texas and local communities are committed to offering the most competitive incentive packages for foreign direct investment projects. Below is a general overview of incentives followed by a breakdown of specific tax-related incentives. State Incentive: Texas Enterprise Fund (TEF) The Texas Enterprise Fund (TEF) was established in 2003 and is the largest “deal-closing” fund of its kind in the U.S. The TEF is used as a final incentive tool for projects that offer significant projected job creation and capital investment and where a single Texas site is competing with another viable out-of-state option. State Enterprise Zone Program The Texas Enterprise Zone Program is a tool for communities to partner with the State to promote job creation and capital investment in economically distressed areas. Designated projects are eligible for state and use tax refunds on taxes paid for equipment and machinery, materials, taxable services, electricity and other business expenses. Workforce Development Workforce programs are provided through the Texas Workforce Commission to fund customized job training initiatives. The Commission also disburses grants to community and technical colleges for businesses who want to train new workers. Grants Qualified communities can access several types of grants to fund public infrastructure (water, sewer, roads, etc.) and real estate development (acquisitions, construction, and/or renovation) needed to assist a business which commits to create and/or retain permanent jobs, primarily for low and moderate-income persons.
  • 7. 7Bexar County, Texas Incentives cont’d » Tax Incentives Breakdown State and local communities offer a variety of tax incentives and innovative solutions for corporations to expand in Texas. Programs include Enterprise Zone sales tax refunds, manufacturing sales tax exemptions, property tax value limitation, and freeport exemptions. Texas Enterprise Zone Program The Texas Enterprise Zone Program is an economic development tool for local communities to partner with the State of Texas to promote job creation and significant private investment that will assist economically distressed areas of the state. Approved projects are eligible to apply for state sales and use tax refunds on qualified expenditures. The level and amount of refund is related to the capital investment and jobs created at the qualified business site. Manufacturing Exemptions Tangible Property State sales and use tax exemptions are available to taxpayers who manufacture, fabricate or process tangible property for sale. The exemption generally applies to tangible personal property involved in the manufacturing process. Natural Gas & Electricity Texas manufacturing companies may be exempt from paying state sales and use tax on electricity and natural gas used in manufacturing, processing, or fabricating tangible personal property. Value Limitation and Tax Credits (Texas Economic Development Act) An appraised value limitation may be extended to a taxpayer who agrees to build or install property and create jobs in exchange for an eight-year limitation on the taxable value of the property. The value limitation applies to the local school district maintenance and operations tax (M&O) portion of the property tax and a tax credit. Freeport Exemptions A freeport exemption is a property tax exemption. Freeport property includes various types of property that are detained in Texas for a short period of time (175 days or less) to be transported out of Texas. The goods must be in Texas for certain purposes. Pollution Control Equipment Incentive A Texas constitutional amendment providing an exemption from property taxation for pollution control was approved in 1993. The intent was to ensure that compliance with environmental mandates, through capital investments, did not result in an increase in a facility’s property taxes. Renewable Energy Incentives Various tax exemptions, franchise tax exemptions, and franchise tax deductions are available for renewable energy equipment and systems. Renewable energy encompasses solar, wind, ethanol, and biodiesel energy. Defense Economic Readjustment Zone Program The Defense Economic Readjustment Zone Program (DERZ) was established to stimulate business recruitment and job creation in adversely impacted defense-dependent communities. DERZ can provide assistance to Texas communities, businesses, and workers impacted by, or vulnerable to, the closure or realignment of military installations and the reduction of federal defense contracting expenditures.
  • 8. 8 Bexar County, Texas Incentives cont’d » Select Texas Enterprise Fund (TEF) Projects Company Location Industry Direct Jobs Capital Investment TEF Award Est. Total Jobs Year Announced Rackspace Windcrest Web Hosting 4,000 $111,380,000 $22,000,000 10,360 2007 Apple Austin Computer Hardware/Software 3,635 $304,000,000 $21,000,000 10,685 2012 Triumph Aerostructures (formerly Vought) Dallas Aerospace Mfg. 3,000 $598,000,000 $35,000,000 29,377 2004 Caterpillar Seguin Engine/ Machinery Mfg. 1,714 $176,800,000 $8,500,000 3,178 2008 T-Mobile Frisco Wireless Communications 855 $20,700,000 $2,150,000 2,062 2006 Santana Textiles Edinburg Textile Mfg. 800 $171,000,000 $1,650,000 1,232 2008 Visa Austin Financial Services 794 $27,240,000 $7,900,000 2,835 2012 GE Transportation Fort Worth Locomotive Mfg. 775 $96,000,000 $4,200,000 2,978 2011 Klein Tools Mansfield Hand Tool Mfg. 585 $18,000,000 $2,800,000 1,589 2010 Lockheed Martin Houston Aerospace Mfg. 550 $58,000,000 $5,480,000 2,043 2004 Continental Automotive Seguin Automotive Parts Mfg. 300 $113,000,000 $1,200,000 522 2012 Becton, Dickinson & Co. San Antonio Medical Devices 296 $6,350,000 $1,560,000 570 2010 Caterpillar Victoria Construction Machinery Mfg 238 $122,725,000 $1,175,000 1,943 2010 Layne Christensen Co. The Woodlands Heavy Construction HQ 210 $10,350,000 $1,300,000 847 2012 Pactiv Corsicana Plastic Product Mfg. 200 $58,000,000 $930,000 515 2012 JTEKT Ennis Automotive Parts 200 $30,000,000 $333,000 562 2004 Jyoti Americas Conroe Electrical Transmission Equip 157 $27,610,250 $865,000 419 2010 Dow Chemical Freeport Chemical Mfg. 150 $1,700,000,000 $1,000,000 631 2012 CK Technologies Brownsville Truck Component Mfg. 121 $18,200,000 $425,000 156 2010 Source: State of Texas, Office of the Governor, Rick Perry.
  • 9. 9Bexar County, Texas Tax Environment » Zero Corporate or Individual Income Tax With no corporate income tax and no individual income tax, Texas has one of the lowest tax burdens in the country and ranks as a Top 10 Best State in the Tax Foundation’s 2012 State Business Tax Index. Franchise Tax In 2008, Texas replaced its franchise tax with a margins tax in order to establish a broader, fairer tax assessed at a lower rate. The goal of the reformed tax was to provide a level playing field for all businesses, to have a broad base that includes all business entities that receive liability protection from the state, to be competitive with other states to maintain Texas’ reputation for having one of the best business climates in America, and to reflect the realities of a rapidly evolving economy. The reformed margins tax lowered the primary franchise tax rate from 4.5% to a tax of 1% on gross receipts less compensation or cost of goods sold. Property Tax Texas has no property tax at the state level. Local governments and special taxing districts levy taxes on real and tangible personal property. All property is appraised at full market value and is assessed on 100% of appraised value. The total tax rate is the sum of all taxing units including cities, counties, schools and special districts. Local governments have the option to exempt goods in transit, or “freeport goods”, from ad valorem taxation. Freeport goods are inventories acquired or brought into the state by businesses and held for no more than 175 days before being shipped out of the state. Local governments can offer to businesses an abatement of local ad valorem taxes on real and personal property for up to ten years. Sales & Use Tax The state levies a sales and use tax of 6.25% on sales of tangible personal property and certain services. Additionally, cities, counties, and transit authorities may add to the rate for a combined state and local rate of 8.25%. Sales and use tax exemptions are offered on machinery and equipment used in the manufacturing process and on natural gas and electricity when sold to commercial businesses that are “predominately” manufacturing. Sales and use tax exemptions may also be available to qualifying businesses in Enterprise Zones.
  • 10. 10 Bexar County, Texas Tax Environment » Tax Climate by Select State Comparisons (2013) State Individual Income Tax Corporate Income Tax Sales Tax Texas (TX) 0% 0% 6.25% Alabama (AL) 5% top rate 6.5% flat rate 4% Georgia (GA) 6% top rate 6% flat rate 4% Mississippi (MS) 5% 3 brackets 5% 3 brackets 7% Sales and excise taxes Tennessee (TN) 6% flat rate 6.5% flat rate 7% Source: Tax Foundation. State Business Tax Climate Index Comparisons, 2011 – 2013 2013 2012 2011 Change from 2012 to 2013 State Rank Score Rank Score Rank Score Rank Score TX 9 6.09 9 6.09 9 6.12 0 0.00 AL 21 5.26 20 5.24 21 5.28 -1 +0.02 GA 34 4.86 34 4.92 35 4.83 0 -0.06 MS 17 5.37 17 5.39 18 5.39 0 -0.02 TN 15 5.67 13 5.69 13 5.72 -2 -0.02 Note: A rank of 1 is more favorable for business than a rank of 50. A score of 10 is more favorable for business than a score of 0. All scores are for fiscal years. D.C. score and rank do not affect other states. Source: Tax Foundation.
  • 11. 11Bexar County, Texas Strategic Region: Texas-Mexico Automotive SuperCluster » Texas-Mexico Automotive SuperCluster (TMASC) Region: » Bi-national U.S. - Mexico manufacturing region » States: Texas, Coahuila, Nuevo León, San Luis Potosí, Tamaulipas » 8 automotive assembly and parts plants » 7 commercial and military vehicle plants » 10 heavy equipment manufacturers » 3 specialty vehicle plants » Over 230 OEM supplier plants » Formula One Circuit of The Americas
  • 12. 12 Bexar County, Texas The TMASC Region is home to eight automotive assembly plants and parts plants. These plants employ over 17,000 workers and have a production capacity of over 800,000 units. In addition, there are seven commercial and military vehicle manufacturing plants. Heavy equipment manufacturers in the region include Caterpillar, John Deere, Kalmar RT, and Manitou, which together have ten plants in the region. There are also three specialty vehicle manufacturers. Skyline manufactures recreational vehicles, Supreme Corp manufactures van bodies and armored vehicles, and Frazer Bilt manufactures emergency response vehicles. The majority of the plants are clustered along the NAFTA Highway, which consists of I-35 in Texas and MX-85 and MX-57 in Mexico. Company Category Product City, State, Country Chrysler Automotive Parts Engines Ramos Arizpe, COAH, MEX Chrysler Automotive Light Trucks Saltillo, COAH, MEX Chrysler Automotive Stamping Saltillo, COAH, MEX GM Automotive Light Trucks Arlington, TX, U.S. GM Automotive Stamping Arlington, TX, U.S. GM Automotive Cars, Light Trucks, Engines, Transmissions Ramos Arizpe, COAH, MEX GM Automotive Cars, Transmissions San Luis Potosí, SLP, MEX Toyota Automotive Light Trucks San Antonio, TX, U.S. BAE Systems Commercial and Military Vehicle N/A Sealy, TX, U.S. Capacity of Texas Commercial and Military Vehicle Industrial Trucks and Trailers Longview, TX, U.S. Daimler - Freightliner Commercial and Military Vehicle Class 8 Trucks Saltillo, COAH, MEX Marcopolo Commercial and Military Vehicle Buses Monterrey, NL, MEX Navistar - International Commercial and Military Vehicle Class 6-8 Trucks Escobedo, NL, MEX Peterbilt Commercial and Military Vehicle Class 6-8 Trucks Denton, TX, U.S. Caterpillar Heavy Equipment Parts Engine Heads Schertz, TX, U.S. Caterpillar Heavy Equipment Parts Engines Seguin, TX, U.S. Caterpillar Heavy Equipment Parts Excavator Buckets Waco, TX, U.S. Caterpillar Heavy Equipment Hydraulic Excavators Victoria, TX, U.S. Caterpillar Heavy Equipment Excavator cabins, Components Ciénega de Flores, NL, MEX Caterpillar Heavy Equipment Mining Trucks Ciudad Acuña, COAH, MEX John Deere Heavy Equipment Agricultural Machinery, Tractors Garza Garcia, NL, MEX John Deere Heavy Equipment Agricultural Machinery, Tractors Saltillo, COAH, MEX John Deere Heavy Equipment Lawn Mowers, Agricultural Equipment Ramos Arizpe, COAH, MEX Kalmar Heavy Equipment Rough terrain material handling vehicles Cibolo, TX, U.S. Manitou North America Heavy Equipment Forklifts Waco, TX, U.S. Frazer Bilt Specialty Vehicles Emergency Response Vehicles Houston, TX, U.S. Skyline Specialty Vehicles Motor Homes, Trailers Mansfield, TX, U.S. Supreme Corp Specialty Vehicles Van Bodies, Armored Vehicles Cleburne, TX, U.S. Source: ELM Analytics, TIP Strategies research. State abbreviations: Texas (TX), Coahuila (COAH), Nuevo León (NL), San Luis Potosí (SLP), Tamaulipas (TAMPS) TMASC is the Capital for Truck, SUV, and Heavy Equipment Manufacturing »
  • 13. 13Bexar County, Texas TMASC Supplier Density » According to ELM Analytics, the TMASC Region has more than 230 OEM suppliers that employ over 130,000 workers. Strong clusters of suppliers have developed in the Dallas-Fort Worth area, in the Monterrey-Saltillo Corridor, and straddling the border in the Lower Rio Grande Valley. Most of the top global OEM parts suppliers are located in the TMASC Region. Of the top 15 global suppliers, 12 have a significant presence in the region. TMASC’s OEM supplier base is robust. In terms of employment, it is comparable to that of Michigan’s. Coahuila and Tamaulipas each rank in the Top Ten Supplier States in North America. Nuevo León ranks 16th and Texas 24th . In terms of the number of supplier plants, only Michigan, Ohio, and Ontario have more supplier plants than the TMASC Region. Suppliers within 400 miles of the TMASC’s NAFTA Highway TMASC has a robust supplier network located within the region and is in close proximity to other large supplier clusters. From TMASC, an assembly plant can access supplier networks in Oklahoma, Arkansas, Louisiana, Puebla, Mexico, and Guanajuato within 400 miles. According to ELM Analytics, the TMASC Region has more than 230 OEM suppliers that employ over 130,000 workers. Most of the top global OEM parts suppliers are located in the TMASC Region. Top Global Suppliers in TMASC Aisin (JP) Bosch (DE) Continental (DE) Delphi (USA) Denso (JP) Faurecia (FR) Johnson Controls (USA) Lear Corporation (USA) Magna (CAN) TRW (USA) Yazaki (JP) ZF (DE) Source: ELM Analytics.
  • 14. 14 Bexar County, Texas TMASC Supplier Density cont’d » TMASC Supplier Count State within TMASC Region # of Suppliers Employment Coahuila, Mexico (COAH) 58 44,013 Nuevo León, Mexico (NL) 46 26,003 San Luis Potosí, Mexico (SLP) 19 5,899 Tamaulipas, Mexico (TAMPS) 52 44,632 Texas, U.S. (TX) 55 13,694 TMASC TOTAL 230 134,241 Source: ELM Analytics, TIP Strategies research (2011). Supplier plants located within TMASC are generally larger than traditional U.S. automotive manufacturing states. Average employment per plant in the TMASC region is 584 workers per plant. For comparison, the average employment per plant in Michigan is 163 and in all of North America is 307. Industry Snapshot: Texas Successfully Supports a Global Assembly Plant with On-site Suppliers Toyota Motor Manufacturing, Texas, Inc. (TMMTX), established in 2006, was the first OEM in North America to co-locate suppliers on the same campus with its assembly plant for the Tundra full-size truck and Tacoma pick-up truck. TMMTX is located on 2,000 acres of flat land just south of downtown San Antonio. The assembly plant includes state-of-the-art stamping, welding, paint, and plastics facilities. Integrated into the main plant are 21 individual and parts suppliers who separately produce/assemble on 1.8 million square feet. On-site suppliers expand total on-site team members by an additional 2,100 workers. TMMTX took a unique approach to on-site supplier selection by leveraging the opportunity to increase its minority-owned supplier base. Of the 21 on-site suppliers, seven are minority owned and six are new joint ventures between well established U.S./Japanese suppliers and San Antonio businesses. Key benefits generated by TMMTX on-site suppliers: • Reduced shipping and logistics costs • Lowered supply chain disruptions and risks for just-in-time production • Immediately strengthened communication for modifications and production adjustments • Increased percentage of locally sourced parts and components • Expanded U.S. minority supplier base • Created local brand recognition in the U.S. market • Strengthened leadership in workforce diversity and inclusion initiatives
  • 15. 15Bexar County, Texas Number of OEM TIER 1 Supplier Plants by State: Cars & Light Trucks OEM Coahuila (COAH) Nuevo León (NL) San Luis Potosí (SLP) Tamaulipas (TAMPS) Texas (TX) Audi 0 1 0 1 0 BMW 3 2 1 5 1 Chrysler 29 23 12 23 23 Fiat 0 1 0 0 0 Ford 31 28 13 29 25 GM 39 23 16 39 23 Honda 2 5 0 6 11 Hyundai 1 0 0 0 0 Jaguar 0 1 0 2 1 Land Rover 0 0 0 0 1 Mazda 0 1 0 2 1 Mercedes-Benz 4 6 4 5 0 Mitsubishi 1 2 0 5 5 Nissan 12 14 12 13 2 Porsche 0 0 0 1 0 Renault 5 3 2 1 0 Subaru 3 0 0 4 2 Toyota 8 7 0 9 11 Volkswagen 15 10 9 7 1 Volvo 1 1 1 0 3 Source: ELM Analytics, TIP Strategies research (2011). Largest Supplier Plants by Employment Parent Assembly Plant City State Employment Alcoa Arneses y Accessorios de Mexico Ciudad Acuña COAH 9,300 Delphi Delnosa (Plants I – V) Reynosa TAMPS 6,600 Cifunsa Cifunsa (Plants I – IV) Saltillo COAH 5,813 Delphi Deltronicos de Matamoros Matamoros TAMPS 5,200 Texas Instruments Texas Instruments Sherman TX 3,600 AEES Manufacturera de Componentes Electricos de Mexico Piedras Negras COAH 3,500 Nemak Nemak (Plants I – IV) Garza Garcia NL 3,300 Trico Trico Componentes Matamoros TAMPS 3,200 Takata Falcomex Ciudad Acuña COAH 2,500 TRW TRW Vehicle Safety Systems de Mexico Reynosa TAMPS 2,400 Source: ELM Analytics, TIP Strategies research (2011).
  • 16. 16 Bexar County, Texas TMASC is the North American Epicenter of Trade » The TMASC region facilitates robust intra-industry trade between the U.S., particularly between Texas and Mexico. Texas has the longest border with Mexico of any U.S. state that is dotted with suppliers, final assemblers, and logistics providers on both sides. It is common for engine blocks to cross the border, return as engines, and cross once more as assembled autos. Intra-industry trade solidifies Texas’ ranking as the third state for transportation equipment exports - valued at over $25.2 billion - with Mexico and Canada as the top two destinations, respectively. Underlying cross-border activity is NAFTA’s rule of origin which provides duty-free entry for goods with 62.5% American, Mexican, or Canadian content. Further facilitating trade is key infrastructure within TMASC. Automakers located in Texas access the largest U.S. rail and road infrastructure, and the most U.S. ports of entry to ensure assembly plants have uninterrupted access to the world for in-bound and out-bound logistics. Texas assemblers like GM, Toyota, Caterpillar, and Peterbilt, export their products by leveraging U.S. (19) and Mexico free trade agreements to enter foreign markets. As a result, Texas’ consistent ranking as the top exporting U.S. state for the 11th consecutive year in 2012 with over $251 billion (USD) of goods further illustrates the region’s global manufacturing environment. TMASC Region Preferential Trade Partners Texas assembly plants operate at the epicenter of international trade within the North American Free Trade Agreement (NAFTA) corridor.
  • 17. 17Bexar County, Texas Competitive Manufacturing Bolstered by Robust Infrastructure » Border Crossings The TMASC Region includes 12 border crossings. Five of these crossings rank in the top 20 busiest U.S. border crossings for truck traffic. Four of these crossings – Brownsville, El Paso, Laredo, and McAllen – each see over seven million vehicles, trucks, and rail cars transit bi-nationally each year. Laredo, with four vehicle bridges and one rail bridge, has the most cross-border traffic in the region. Laredo is also the most active crossing for commercial trucks, with 1.6 million crossing in 2010. McAllen, El Paso, and Pharr are very active crossings for commercial trucks as well. Multi-Modal Facilities & Inland Ports A wide range of multimodal facilities are available in the TMASC Region. Air-to-truck connections are available at many airports including the Alliance in Fort Worth, Amarillo, Austin, Brownsville, Dallas - Fort Worth, El Paso, Houston Intercontinental, Laredo, Lubbock, and San Antonio. In addition, ports throughout TMASC have truck-port-rail connections, including Port Arthur, Houston, Galveston, Port Lavaca, and Brownsville. Railroads have installed intermodal facilities around TMASC in areas with advantages for logistics and warehousing. BNSF has five intermodal facilities in Texas: Amarillo, El Paso, Fort Worth, Houston, and the Port of Houston. Kansas City Southern has seven intermodal facilities in the TMASC region: Dallas, Laredo, and Rosenberg in Texas, and Altamira, Ramos Arizpe, Saltillo, and San Luis Potosi in Mexico. Union Pacific railroad has six intermodal facilities in Texas: Dallas, Donna, El Paso, Houston, Laredo, and San Antonio. 2010 North & Southbound Crossings by Truck Source: Texas A&M International University. Note: Truck information includes only 2 to 6 Axle Loaded and Unloaded Commercial Vehicles.
  • 18. 18 Bexar County, Texas Competitive Manufacturing Bolstered by Robust Infrastructure cont’d » TMASC Class I Railroad Source: U.S. Department of Transportation, INEGI. Rail Infrastructure The TMASC Region is serviced by five Class I railroads – Kansas City Southern de Mexico, Ferrocarril Mexicano, BNSF, Kansas City Southern, and Union Pacific. Together, the Class I railroads operate 23,199 kilometers of track. Another 4,345 kilometers of rail operated by local, switching, and terminal railroads complement the regional rail system. This rail system connects directly to the Mexican ports of Manzanillo and Lazaro Cardenas, which handle most of the country’s automobile trade. Kansas City Southern is building a line between Monterrey and Nuevo Laredo by installing 43 track kilometers with new 136-pound rail and 75,000 concrete ties; replacing 56,000 ties between Colorado and Lazaro Cardenas to support 136-pound rail; installing more than 312,000 ties and a total of 111 kilometers of both 115 and 136 pound rail on routes. TMASC Class I Railroad in Kilometers Total Class I Kansas City Southern de Mexico Ferrocarril Mexicano Kansas City Southern Railway BNSF Railway Union Pacific Railroad Total Railroad (Including Class I) Texas 19,483 0 0 1,318 7,968 10,197 23,112 Coahuila 1,230 169 1,061 0 0 0 2,218 Nuevo León 805 544 261 0 0 0 192 San Luis Potosí 998 982 16 0 0 0 1,234 Tamaulipas 684 296 476 0 0 0 937 Source: Association of American Railroads, Secretaría de Comunicaciones y Transportes.
  • 19. 19Bexar County, Texas Sea Port Infrastructure The TMASC Region has 19 ports along the Gulf of Mexico. Houston is the largest and Beaumont is the second largest in terms of cargo tonnage. In terms of container traffic, Houston and Altamira are the two largest in the region. The Port of Houston is the 13th largest port in the world, recording almost 215 million metric tons of cargo in 2011. Its top import containerized trading partners in March 2013 were: Brazil, Belgium, Netherlands, China, Colombia. Houston’s top export containerized trading partners were: China, Germany, Brazil, Italy, and India. The eighth largest port in the U.S. by total tonnage is the Port of Corpus Christi that offers 125 acres of open storage and fabrication sites, 27,453 square meters of covered dockside storage, and a 14-meter-deep channel. Its top import containerized trading partners in March 2013: Saudi Arabia, Venezuela, Denmark, China, and Brazil. Corpus Christi’s top export containerized trading partners were: Nigeria, Mexico, Morocco, Angola, and Vietnam. Though the ports of the TMASC Gulf Coast Region already see a considerable amount of traffic, the Panama Canal expansion will likely increase traffic through these Gulf Coast ports. The new parallel canal, that opens in 2015, will accommodate much larger ships that can carry up to 160% more 40-foot containers. Several other market factors will likely push more traffic toward the Gulf ports: • Increasing regulation, congestion, and costs to operate in California, • Better access to population centers in the US South and Midwest, and • Growth in trade with Brazil and other Latin American countries. Competitive Manufacturing Bolstered by Robust Infrastructure cont’d » U.S. Waterborne Foreign Trade 2012 by Rank Select U.S. Customs Districts by Volume of Cargo (Metric Tons, 000s) Exports Imports Total Trade Rank Tons Rank Tons Rank Tons Houston-Galveston, TX 2 100,318 1 147,019 2 247,337 Savannah, GA 11 17,724 10 15,194 13 32,919 Port Arthur, TX 12 16,978 5 47,190 6 64,168 Source: U.S. Census Bureau, U.S. Merchandise Trade, Selected Highlights (Report FT 920). TMASC Ports Source: American Association of Port Authorities, Secretaría de Comunicaciones y Transportes.
  • 20. 20 Bexar County, Texas Shorter Time to Market For Large Consumer Regions » The region’s proximity to major population centers in North America from Texas consistently ranks as one of the top reasons for site selection location within TMASC. The 300-, 600-, and 900-mile radii represent markets that can be reached within a half-day, one day, and one-and-a-half day drive. Approximately 36 million people in 11 million households live within a half-day drive of central Texas, 62 million people in 20 million households live within a one-day drive, and 176 million people in 52 households live within a one-and-a-half drive. This ring analysis also shows that the region’s reach extends to power markets in Mexico like Monterrey, San Luis Potosi, and Mexico City and in the U.S. like Houston, Atlanta, St. Louis, Denver, Phoenix, and other mid-Western markets. Ring Population (in Millions) % U.S. & Mexico Population Households (in Millions) % U.S. & Mexico Households 300-mi/483-km 36 9% 11 8% 600-mi/966-km 62 15% 20 14% 900-mi/1,448-km 176 42% 52 37%
  • 21. 21Bexar County, Texas Increase Market Share Among the Hispanic Demographic » Hispanics are key for any automaker’s future success in the U.S. market. The Hispanic market has unique cultural and economic ties to the TMASC region - once a territory of New Spain. TMASC is a majority-minority region with large populations of Hispanics who are expected to wield $1.5 trillion in purchasing power by 2015, according to Nielsen America. The Hispanic market’s astounding growth is fueled by 50,000 Hispanics turning 18 years of age each month for the next two decades. A presence in the region provides first-hand knowledge into cultural characteristics and consumer behavior, along with key insights for marketing and advertising efforts that further propel major brand recognition among Hispanics in North America. U.S. Hispanic Population 2000 2010 Change in Hispanic Population 2000-2010 Total Population Total Hispanic Population Hispanic - Percent of Total Population Total Population Total Hispanic Population Hispanic - Percent of Total Population Number Percent U.S. 281,421,906 35,305,818 13% 308,745,538 50,477,594 16% 15,171,776 43% TX 20,851,820 6,669,666 32% 25,145,561 9,460,921 38% 2,791,255 42% AL 4,447,100 75,830 2% 4,779,736 185,602 4% 109,772 145% GA 8,186,453 435,227 5% 9,687,653 853,689 9% 418,462 96% MS 2,844,658 39,569 1% 2,967,297 81,481 3% 41,912 106% TN 5,689,283 123,838 2% 6,346,105 290,059 5% 166,221 134% Source: U.S. Census Bureau.
  • 22. 22 Bexar County, Texas By 2016, Hispanics will contribute roughly $14 billion to the Car and Automobile Manufacturing industry, representing annualized growth of 7% from 2011. The Hispanic population increased by 15 million between 2000 and 2010, accounting for over half of the 27 million increase in the total population of the U.S. Source: IBISWorld Inc. Source: U.S. Census Bureau.
  • 23. 23Bexar County, Texas Texas SUV Registrations vs Select States (2011) State Total Sport Utilities Registrations Percentage of U.S. Registrations USA 17,202,408 100.00% TX 982,043 5.71% AL 243,332 1.41% GA 505,413 2.94% MS 83,299 0.48% TN 308,143 1.79% Source: U.S. Department of Transportation Federal Highway Administration Office of Highway Policy Information. *Sport Utilities as defined by the U.S. Department of Transportation Texas Automotive Market » It’s no coincidence that GM and Toyota both build SUVs and trucks in Texas - one of the top markets for large vehicles. In 2011, national comparisons ranked Texas number two for pick-up truck and number three for SUV registrations. TMASC Large Vehicle Production by Assembly Plant, December and YTD Brand/Location Vehicle Dec. 2012 Dec. 2011 Dec. % Change 12 mos. 2012 12 mos. 2011 12 mos. % change Chrysler Saltillo, Coah., MEX Ram Hvy-Duty 11,893 7,952 50% 165,802 119,905 38% Ram Lt-Duty 1,796 2,627 -32% 28,334 21,713 31% General Motors Arlington, TX, U.S. Cadillac Escalade 1,058 1,038 2% 16,473 17,085 -4% Cadillac Escalade ESV 480 489 -2% 9,275 7,769 19% Chevrolet Suburban 3,348 2,985 12% 59,823 58,185 3% Chevrolet Tahoe 7,381 4,748 56% 108,307 100,134 8% GMC Yukon 3,976 2,663 49% 48,435 50,091 -3% GMC Yukon XL 2,032 1,672 22% 33,445 34,965 -4% General Motors Ramos Arizpe, Coah., MEX Cadillac SRX (T) 4,685 5,664 -17% 90,177 85,465 6% Chevrolet Captiva Sport (T) 2,994 4,051 -26% 57,118 42,798 34% General Motors San Luis Potosi, SLP. MEX Chevrolet Trax (T) 4,518 0 – 11,378 0 – Toyota San Antonio, TX, U.S. Tacoma 6,978 7,237 -4% 109,616 65,122 68% Tundra 6,423 8,849 -27% 109,582 83,895 31% Source: AutoNews.
  • 24. 24 Bexar County, Texas Strategic Workforce Advantages » With over 12.6 million workers, Texas has the nation’s second largest civilian labor force, providing businesses an extensive pool of candidates from a variety of diverse backgrounds for highly-educated and skilled hires. In Texas, over 800,000 workers, or about 6% of the civilian labor force, are employed by the manufacturing sector in a right-to-work environment. The average weekly wage of Texas workers in the vehicle and vehicle parts manufacturing sector is 8% to 14% less than the national average. Regionally, the population in TMASC is young relative to the rest of North America and other vehicle producing nations. In 2010, the median age in Texas was 33.6 years and in Mexico was 26.6. These median ages were well below those of the U.S., Japan, Canada, and China. In the U.S. overall, the median age was 37.2 years of age. Over the next 20 years, Texas’ population is expected to age only slightly. During that same period, the population of Japan, China, Brazil, Mexico and India are all expected to age quite rapidly, each with a gain in median age of over 6 years. In comparison to other vehicle producing states, Texas and Mexico had younger populations in 2010 than every other state. By 2030, the TMASC Region will have a younger population than every other vehicle producing state except Georgia. South Carolina, Mississippi, Alabama, New Jersey, Michigan, Ohio, and Kentucky are all expected to have median ages of 40 or over. The implications of this are significant. An aging population will affect the availability of labor (as well as costs associated with employer-provided healthcare). By comparison, the TMASC Region provides advantages in both of these areas. Comparative Median Age Nation or U.S. State 2010 2030 Change Japan 44.7 51.4 +6.7 Germany 44.3 48.8 +4.5 MS 36.0 41.1 +5.1 AL 37.9 41.0 +3.1 US 37.2 38.7 +1.5 TN 38.0 38.3 +0.3 Brazil 29.1 37.4 +8.3 Mexico 26.6 36.2 +9.6 GA 35.3 35.6 +0.3 TX 33.6 34.6 +1.0 Source: Population Division of the Department of Economic and Social Affairs of the UN Secretariat, World Population Prospects. The 2010 Revision (Mexico and Canada reflect 2010 and 2030 estimates); U.S. Census American FactFinder; Statistics Canada; CIA World Fact Book.
  • 25. 25Bexar County, Texas Automotive Manufacturing Employment in Texas 2012 Third Quarter Sector (Industry code) Employees Firms Average Annual Wage Motor Vehicle Manufacturing (3361) 8,707 26 $68,068 Motor Vehicle Body & Trailer Manufacturing (3362) 7,831 165 $40,820 Motor Vehicle Parts Manufacturing (3363) 17,280 285 $46,176 TOTAL 33,818 476 $50,572 Source: Texas Workforce Commission. Strategic Workforce Advantages cont’d » Top Automotive Manufacturing Employers in Texas - 2012 Rank Company Texas Operations Product Employees 1 General Motors Assembly, Metal Stamping, IT Innovation Center Full-sized SUVs 3,500 2 Toyota Assembly Full-size truck and pick-up 2,900 3 Peterbilt Motors Assembly Heavy duty trucks 2,215 4 Continental Automotive Systems Parts Manufacturing Automotive electronics 1,290 5 Caterpillar Engine Assembly Engines, components 1,120 Source: Texas Workforce Commission.
  • 26. 26 Bexar County, Texas Strategic Workforce Advantages cont’d » Workforce Program Examples Houston Community College - Manufacturing Engineering Technology Program Houston, TX The Manufacturing Engineering Technology program is designed to develop competent support technicians for employment in the field of manufacturing engineering and related occupations. The curricula are designed to provide broad-based education with opportunity for specific employment and personal interest goals. The shop has more than forty pieces of manual equipment (such as turning and milling machines), computerized numerical controls (CNC), six robotic arms, a computer integrated manufacturing (CIM) cell, hydraulic and pneumatic trainers, and personal computers with up-to-date training materials. South Texas College - Rio South Texas Manufacturing College Alliance McAllen, TX South Texas College serves as the lead agency in the Rio South Texas Manufacturing College Alliance and the North American Advanced Manufacturing Research Education Initiative. It is charged with leading the implementation of a regional skills credentialing customized training system in the region focused on advanced Manufacturing skills. A few of the programs included in this effort are: tool and die, industrial maintenance, precision manufacturing, plastics, leadership and supervisory training. Toyota Advanced Manufacturing Technician (AMT) Program San Antonio, TX The Toyota AMT program partners with Alamo Colleges to offer a two-year associates degree whose goal is to produce the world class technicians to fill the gap in manufacturing. Specific program details include: • Two-year associates degree • Real-world experience integrated into AMT program • Technical workers bypass several years of on-the-job training • Graduating students ready to fill advanced positions in manufacturing • Students work at Toyota Motor Manufacturing, Texas, three days a week acquiring experience • Toyota provides students an average of $30,000 compensation over the two-year program • One more “additional pathway” for young adults who graduate from high school
  • 27. 27Bexar County, Texas Diverse Energy Portfolio for Sustainable Manufacturing » “Industry accounts for 50 percent of all energy used in Texas, compared to a 32 percent share for the U.S. as a whole. Much of Texas’ energy consumption, then, fuels industries producing products used across the U.S. and around the world.” - Susan Combs, Texas Comptroller Diversifying the energy mix of Texas’ electricity market is a state- wide priority, helping to lower electricity prices. According to the U.S. Department of Energy, Texas’ electric power industry generated 48.35 million megawatt hours (MWh), 12 percent of the nation’s capacity from August 2010 to August 2011. Texas relies on a variety of fuel sources to meet the growing demand for electricity, including 55 percent from natural gas, 33 percent from coal, 7 percent from nuclear, 1 percent from hydroelectric , and 4 percent from other renewables. Independent Power Grid Texas is the only state with its own power grid, making it completely independent from other national networks, where one state’s decisions may affect electricity markets in all other states. The Texas grid is not subject to federal regulation over electrical transmission, which expedites the regulatory process for new energy development. Companies benefit from Texas’ electricity production that generates approximately 11 percent of the nation’s capacity. Renewable Sources for Sustainable Manufacturing If Texas were a nation, it would rank #6 for installed wind capacity behind only China, the rest of the U.S., Germany, Spain, and India. Texas leads the U.S. in installed wind energy capacity (10,394 MW as of January 2012). The Lone Star State is home to six of the ten largest wind power projects in the nation and two of the three largest wind farms in the western hemisphere, Roscoe Wind Farm and Horse Hollow Wind Farm. By 2014, Texas will have new transmission capacity to integrate over 18,500 MW of wind energy onto its grid. TEXAS NET ENERGY GENERATION IN MILLION Mwh Texas’ industrial and commercial electric energy costs an average of 12 percent less (per kWh) than the rest of the U.S. U.S. Energy Information Administration Natural Gas Coal Nuclear Other Renewables Hydroelectric *August 2010 - August 2011 15.72 26.57 3.590.46 2.06
  • 28. 28 Bexar County, Texas Texas is the only state with its own power grid, making it free from federal regulation over electrical transmission and expediting the regulatory process for new energy development. Texas municipally-owned utilities are leading the industry in developing renewable sources by launching initiatives like CPS Energy’s 400MW solar project in 2012.
  • 29. 29 Bexar County, Texas Notes »
  • 30. 30Bexar County, Texas Notes »
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  • 32. Hon. Kevin Wolff, County Commissioner County of Bexar, Texas • 101 W. Nueva St., 10th Floor • San Antonio, Texas 78205 Office: (210) 335-2613 • www.bexar.org

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