Gonzalez: Maquilas have come to the rescue of McAllen’s economy

MCALLEN, RGV – A businessman from Monterrey with a high-end furniture and home décor store in McAllen says if it were not for the maquila industry, the local economy would be reeling.

Jesus Gonzalez, who owns NIU Urban Living, said the thriving maquila industry is one of the few bright spots he can see as he views the current economic landscape.

“Our belief, as entrepreneurs, is that if we did not have the maquiladoras today, we would be in a lot of trouble,” Gonzalez said. “Remember the devaluations we suffered in 76, 82 and 95-96? Back then it was only the devaluation. Today, we are facing devaluation, violence and Trump’s rhetoric. I think we would be deceased if we did not have the maquilas to support us.”

According to the Federal Reserve Bank of Dallas, McAllen benefits more from maquila activity than any other border city. In a presentation made at a UT-Rio Grande Valley symposium held at the McAllen Country Club in late 2015, Federal Reserve Bank of Dallas economists Roberto Coronado said: “A ten percent increase in maquiladora output leads to a 6.6 percent increase in total employment in McAllen. The bulk of the impact is on the service side of the economy.”

The maquila industry is booming in Reynosa right now. A new report by INEGI (Instituto Nacional de Estadística, Geografía e Informática) that is being promoted by IMMEX (Industria Maquiladora y Manufacturera de Exportación) shows employment in Reynosa maquilas in March 2017 at a record high. According to a study of IMMEX companies, Reynosa registered 101,861 jobs, which represents an increase of 1,593 jobs compared to the same month last year. Previously, the largest number of IMMEX jobs in Reynosa – 101,589 jobs – was registered in October 2007.

In fact, not all maquilas are part of IMMEX so the actual number of maquila workers in Reynosa could be as high as 115,000, according to INDEX Reynosa, a maquila trade association.

“Business is booming. We can barely keep up. The majority of us are working overtime, we are hiring, bringing more stuff in and out, across this border. That is a great thing,” said Mike Myers, general manager of Metal Industries, Inc., in Reynosa, and a board member for INDEX Reynosa. Myers gave his report on the current state of the maquila industry at a recent meeting of the McAllen Economic Development Corporation.

BiCOOLtural Leadership Center

Gonzalez, the Mexican entrepreneur, gave an in-depth interview to the Rio Grande Guardian about the state of the McAllen and Rio Grande Valley economies and a new group he has co-founded (scroll down for video). It is called BiCOOLtural Leadership Center and has been set up by a group of Mexican business leaders based in McAllen that seek to develop a think tank to help shape economic policy on the U.S.-Mexico border.

The interview took place at the McAllen Arts District immediately after the Mexican entrepreneurs had held a monthly meeting. In the interview, Gonzalez talked about attracting a new type of tourist to the Valley.

“We feel we need to diversify, to bring in tourism from the north, Dallas, Houston. I do not think the people of Dallas or Houston are going to find much in McAllen but, Dallas and Houston does not have a beach like we do with South Padre. How can we bring them in? By attracting Michelin Star restaurants,” Gonzalez said.

Gonzalez said he got the idea from listening to NPR Radio.

“I heard of a similar situation in Baja California. Their economy was low-end tourism from the United States. Because of the violence, the Anglo tourists stopped going and buying margaritas. The few stores that remained open decided to change their business model and became breweries or winemakers. There are more than 100 winemakers in the Valle de Guadalupe (otherwise known as Francisco Zarco, a village located in the Ensenada Municipality, Baja California, Mexico). They have risen in only ten years. There is great cuisine over there,” Gonzalez said.

“Why can’t we replicate something like that. I know we do not have the weather appropriate for wine but why do we not have a Michelin Star restaurant in Texas. There are some in Mexico. Why don’t we bring some of those chefs to the Island and have something interesting for Texas residents? Those are the kinds of ideas our (BiCOOLtural) members are coming up with. Can our leaders listen to us? That is the question.”

In the interview, Gonzalez spoke a lot about the BiCOOLtural Leadership Center’s ideas and how they could be embraced by McAllen city leaders. Indeed, he said the group came about as a result of a tourism initiative recently undertaken jointly by McAllen City Commission, McAllen Chamber of Commerce, and McAllen Economic Development Corporation.

“This group was formed two months ago because one of the leaders in McAllen, former Mayor Richard Cortez noticed there was no connection from the marketing efforts the City was doing and us. He asked if we could get together with the city leadership. It was just six or eight of us who volunteered to give them ideas. They listened to us but they did not put our ideas into effect. We told them a campaign in Spanglish would fail,” Gonzalez said.

Gonzalez said when a border city like McAllen decides to invest $250,000 in Mexico, it needs to get the messaging right.

“I am not blaming the campaign because they could have come up with something brilliant and still not get the tourism because of the violence in Reynosa. But, we know how our people think and Amigos Always in Spanglish is counter-productive. Our people like to be spoken to in English or Spanish but not mixed.”

Gonzalez said he and his colleagues in the BiCOOLtural Leadership Center feel they can bring many years of business experience to the table.

“We have 155 members so far, just in two months. And that is only from McAllen, people from Mexico with an accent. We were all busy making money but now we see areas for improvement and our businesses are not as strong (because less Mexican shoppers are coming here). We are investing our time and effort to improve the area,” Gonzalez said.

Gonzalez said he did not want to come over as totally negative towards McAllen’s leadership.

“Don’t get me wrong, there are a lot of things they do right. For instance, for Semana Santa, the city promoted a campaign of no more than 30 minutes on the bridge. I thought that was a great initiative. I had two people in my store complimenting that campaign. So, there are a lot of good things we can applaud the City for. We are not here only to criticize. We simply want to help them. Sometimes they think they know best but how can they know when they do not even speak Spanish? How can you expect to connect?”

Opinion Poll

Gonzalez said he and his colleagues commissioned a professional opinion poll in Tamaulipas and found out that the No. 1 reason people are not visiting the Rio Grande Valley is the violence.

“Who is benefiting from all this? Laredo is picking up the fruits of the situation,” Gonzalez said. “Fortunately, the Governor of the State of Tamaulipas went to school here (in McAllen) and he understands bi-cultural issues. He has a home in McAllen. In our group, we have a first cousin of his. We have the secretary of economic development in the State of Tamaulipas in our group and we have their two representatives in Texas. So, we feel we can be heard.”

Gonzalez gave more details on the opinion poll.

“Multimedios Estrellas de Oro are members. They took control of running the poll in Ciudad Victoria and San Pedro Garza Garcia. The poll was taken five weeks ago. The poll found that the No. 1 reason people are not coming here is violence. The No. 2 reason is the Exchange Rate. And the No. 3 reason is Trump’s rhetoric.”

Asked about the goals of BiCOOLtural Leadership Council, Gonzalez said:

“We comprise entrepreneurs that have two nationalities and have been successful. One member of the group only has 500 employees. We think outside the box and we have some very creative ideas. We are going to try to persuade the local leaders to listen to us, to be open-minded. We want to share our ideas, if they are willing to listen to us. They will be very powerful ideas.”

Gonzalez said when the group first got together it was simply to make their businesses stronger, because they were suffering due to the downturn in Mexican visitors. Now, however, thoughts have turned to creating a think tank.

“We do not want to get into politics. But, we want to invite people in politics who think like us. You know the 80/20 Rule? I know we are going to find 80 percent resistance. We know there are some good leaders in that 20 percent who are going to be very helpful for the cause,” Gonzalez said.

The Pareto principle (also known as the 80/20 rule, the law of the vital few, or the principle of factor sparsity) states that, for many events, roughly 80 percent of the effects come from 20 percent of the causes.)

“We want professors from universities to help make this into a think tank. We do not want to be another chamber of commerce. We are here to give,” Gonzalez said.

Gonzalez said BiCOOLtural does not only want to attract supporters in the Valley, but also in Tamaulipas and Nuevo Leon.

“There is a lot of interest in creating one region. I know we are not the only ones wanting to assist in making this happen. It seems all the other initiatives have been frustrated, in one way or another. Perhaps because some of those other initiatives were branded Rio Grande Valley. The river is not only Rio Grande. It is Rio Bravo on the other side. This is a whole region. There are 3.8 million people on both sides but only 1.3 million on this side. If we were able to see beyond that and bring them on board, I think the eyes of the country would be different.”

The eyes of people from across the country might be turned if they realized the wealth that is generated and spent in the region, Gonzalez argued.

“You have been to our retail store. You have seen our product. People would be surprised. It is merchandise you do not see in big cities, only New York, Miami, Beverley Hills. People do not realize this. They think all the people come across in huaraches, in sandals,” Gonzalez said.

Creative Ideas

Gonzalez listed one of the ideas a colleague in BiCOOLtural Leadership Center came up with.

“At first, the idea did not make sense. He said, why don’t we bring a celebrity like Anthony Bordain from CNN to do a (food) show in the Valley. I know he did one in Laredo a while back. I thought about it and realized that the merchandise we sell to Mexican nationals, it is to a level that I mentioned earlier – New York, Miami, Beverley Hills. You do not find this merchandise in Dallas or Houston. It would be an eye opener for the rest of the country. Bringing Anthony Bordain would be an eye-opener,” Gonzalez said.

“Somebody else mentioned that we have more Walmarts than you can find in Houston. All those statistics, we need them in hard numbers. That is why we need the help, from the professors.”

Asked what he thought of the idea of Tamaulipas and the Valley jointly submitting ideas for reinvigorating NAFTA during the current 90-day window for submissions to the federal register, as a way of making the statement that La Frontera is one region, Gonzalez said:

“We are young. Maybe that is a dream. But, it is true we are not only looking to help the Rio Grande Valley. If we grew as an organization all the way to San Diego, good. We are looking to help. I just hope the local leaders are open-minded and approach us. We would love to talk to them.”

Gonzalez concluded the interview with an idea he has for all the meteorologists on TV in the Valley.

“If you say to the leaders of the border towns on the Mexican side, ‘wow, the weather is hot today, it is 100 degrees,’ they will understand. They know Fahrenheit and Celsius. But on the Valley side, would people know the equivalent in Celsius? I don’t think so. I pose the question, are they interested really in our culture or just selling people a product.”