McALLEN, RGV – There are many positive trends when it comes to recruiting companies to McAllen, says Janie Cavazos, vice president of McAllen Economic Development Corporation.
More and more call center operations are looking to move into the city and the Rio Grande Valley in general, Cavazos said, while many of those that are already here are expanding. In fact, Cavazos said, the number of workers employed by call centers in the Upper Valley has reached almost 10,000.
Another encouraging sign, Cavazos said, is the large number of companies based in Europe and Mexico that are looking to expand into the United States and the border region specifically. She cited the example of a high-tech company from Spain that just signed a lease agreement with McAllen EDC. It will be bringing four engineers to McAllen next month to look for housing and plans to hire up to 55 local engineers.
“We always talk about Reynosa growing fast but McAllen is too,” Cavazos told the Rio Grande Guardian, in an exclusive in-depth interview. “We are seeing a lot of interest from European countries, a lot of companies that originally out-sourced work to China but now believe it is better to be here. And, we have existing companies that are going through expansions,” Cavazos said.
“With the Spanish company, the wages are going to be very attractive. And they are going to need engineers. We definitely need more engineers. That is why we are excited about Texas A&M coming to the Valley, and UTRGV focusing on engineering.”
In the last month alone, Cavazos met with seven prospective clients. Some are in the automotive sector, some are in the plastic injection molding business and some are in the produce sector. If they all establish operations in McAllen or the surrounding cities, it would result in 75,000 additional square feet of manufacturing and warehouse space being utilized and 185 more workers being hired.
“The growth in Reynosa is having a huge impact on the U.S. side. Existing suppliers to the maquila companies are also looking at automating. That can mean growth on the McAllen side,” Cavazos said. “The exciting thing about it is that at one point we were looking at Europe to bring in more industry. Now, they are coming to us.”
Call Centers
The call center that is getting all the attention right now is the $17 million Spectrum facility on 23rd Street just south of Nolana in McAllen. When fully developed, it will employ 600 people at wages of $14 per hour. Spectrum, which used to be Time Warner Cable, is calling it a customer care center. It is due to open officially at the end of June with Gov. Greg Abbott is expected to cut the ribbon.
At a recent board meeting, McAllen EDC President Keith Patridge pointed out that Spectrum had a “soft launch” where, for just one, day, its new employees took calls from customers. “On that one day, they outperformed every other Spectrum call center, taking more calls and resolving more issues. In fact, their manager was recognized by Corporate. That speaks highly of our labor force and it speaks highly of the community and what we are capable of doing,” Patridge said proudly.
McAllen EDC marketing consultant Brandon Garcia said he and Cavazos recently had a chance to see inside the Spectrum building. “It is incredible, it looked like a Google office environment,” Garcia said.
Cavazos said all the local call centers seem to be doing well. She said McAllen and the Valley in general are in great demand because of its bilingual workforce.
“The call center side is definitely booming. Spectrum, which will officially open in June, currently has 180 employees and hopes to grow to 700 employees. They have a very strong pipeline of qualified candidates so they are very excited about being here,” Cavazos said.
“Like Keith said, they did that soft launch for one day and they exceeded all the others, nationwide. That says a lot for our population and how bilingual we are. Spectrum came down here because we are bilingual. They wanted 100 percent bilingual. We are excited to have them. Their facilities are state of the art. When you look at the type of investment they made in this center you will be impressed.”
Cavazos said people would be surprised how many employees call centers employ in the Upper Valley.
“We currently have about 14 call centers in this (Upper Valley) region that create about 10,000 jobs. A lot of those companies are growing. They are growing because of the growth of the Hispanic-speaking population across the nation.”
Space considerations
In the past, McAllen EDC leaders, including Cavazos, have noted that McAllen does not have enough space for manufacturing companies that supply maquilas in Reynosa. Asked if this was still the case, Cavazos said:
“Oh, my gosh yes. I have met with two different developers to talk about this specifically. We have to understand that on the U.S. side, it is mainly the supplier base for metal stampers, plastic injections, machining, CNC (computer numerical control) processes. We don’t have the facilities for these companies. These companies look for buildings that need 20,000, 30,000, 80,000 square feet. They do not really like multi-tenant operations,” Cavazos said.
The MEDC vice president said she is hoping the two developers she has been speaking with will build the types of buildings that are in demand. “We have some space but we are very limited. In the Sharyland area, many of the facilities were built for warehouse operations. That has worked for us, but for the suppliers, they require a certain thickness in the walls, a certain height. The warehouses were not built for this. We hope these developers start building.”
Beyond McAllen’s city limits
If McAllen EDC cannot accommodate a company in McAllen it will help them locate in a neighboring community, Cavazos said.
“If McAllen is not a fit for the company and we do not have a building, we work with our neighbors. We would prefer the companies be in McAllen but we know that is not always going to happen. At the end of the day we are trying to create jobs for Hidalgo County. We know that if a company locates in McAllen they are not just going to hire people that live in McAllen. They hire from Hidalgo County so we work with our neighboring cities,” Cavazos said.
A case in point is CiL, which exports cotton to Mexico. Its owner is Joaquin Spamer. CiL needed a warehouse with a rail component and so decided to purchase property on Business 83 and Tower Road in Alamo. Cavazos recently attended the company’s ribbon cutting ceremony.
“We are excited that Joaquin is expanding his warehouse space. The Alamo building used to house a plastic injection company. I do have some projects that need rail. We work very closely with the economic development and tourism department in the Governor’s Office. We depend on that type of inventory, some of the leads that come from them do require rail, close proximity to the airport, close proximity to the expressway, etc.,” Cavazos said.
“So, the Alamo location was a good place for Joaquin’s company. I believe he has 25 acres there so he has plenty of room to grow. I mentioned to him that I have another company, involved in heavy steel, that could be based there, a company that requires rail. The good thing is the rail line goes into the building. We work very closely with Joaquin. We have another company that could fit into his Trinity building in Mission.”
The Trump Effect
Asked if interest from European companies in moving to McAllen is based upon President Trump’s wish to have more manufacturing done in the United States than overseas, Cavazos said, not really.
“I know that for the company from Spain that just committed, that was not a factor. The reason they chose McAllen was because of their customer base in Mexico, not only the border but the interior of Mexico. And their customer base in the U.S., places like Mississippi, Alabama, Indiana. They saw McAllen as the perfect strategic place to be able to service their customer base in Mexico and the United States. Their customers asked them to have a presence in the U.S.,” Cavazos said.
“The other companies I am seeing from Europe, it is not because of President Trump. It is mainly because they are growing, companies in the automotive, medical, electronic fields. They are trying to get closer to their customers. Logistically, it does not make sense any more for them to ship out of Europe. That is why they are looking at expanding into our market. There was a concern from them in terms of whether President Trump was going to impose a border adjustment tax at 20 percent. There was a lot of uncertainty about that. They said they would not be in Mexico, they would be in the U.S.”
Asked if she had any wrap-up remarks for a “McAllen is Booming” story, Cavazos said:
“Activity is really increasing. We have a lot of new projects. We do business retention and expansion and sometimes it is very difficult because we are so spread out we do not have time to visit our companies. As Reynosa is growing, so is McAllen. I don’t think McAllen ever slowed down. Even with the situation in Mexico, a lot of the maquiladoras in Reynosa that have divisions are looking at the U.S. side. Those for whom energy costs are important, those that are not so labor intensive. I currently have a couple of companies that are looking to do that. They are plastic injection, they are machining operations, that are in Reynosa and want to be on the U.S. side also Business is booming.”
Editor’s Note: The main image accompanying this story shows machinery in the McAllen Metal Stamping plant. The company recently celebrated its 25th Anniversary in McAllen.
