MCALLEN, RGV – If Reynosa and Matamoros are included, the South Texas-Northern Tamaulipas border region has more than 200,000 workers in the manufacturing sector.
But, if Tamaulipas is excluded and the focus is only the Rio Grande Valley the number shrinks to around 13,000. Not that big a figure but the number is increasing, reports Mike Willis, executive director of South Texas Manufacturers Association.
Willis provides reports on the labor market for Workforce Solutions. In his report for April 2018, Willis reported:
“In the McAllen and Brownsville MSAs, the Manufacturing sector has very quietly added a total of 1,000 new jobs in the past year- an annual growth rate of 9.3 percent,” Willis said.
“At three or four percent of the total employment, manufacturing remains one of the smallest sectors in the RGV, along with Construction and Energy. That being said, we are finally beginning to see this sector show signs of significant growth.”
Looking ahead, Willis said things should only get better.
“Bear in mind that the largest new manufacturing plant in several years, Stanley Black & Decker in Mission, is just beginning their startup, and has plans to hire another 400 or so people in the next year, based on their press release.”
Willis said that through his work with economic development corporations and manufacturing companies around the Valley, he is aware of “a large number of additional relocation and expansion projects that could occur in both the construction and manufacturing sectors.”
Willis said much will depend on how renegotiation of the North American Free Trade Agreement and trade policies go.
“The recently enacted tax reform, along with a more business-friendly climate in the USA, are making us much more attractive to manufacturing companies from around the world. Companies who formerly only considered expansions and relocations to other countries are now taking a second look at the USA,” Willis said.
“Our region has a significant location advantage to companies with operations or customers in Mexico and other parts of the USA. The strategic value of the Port of Brownsville to industry is another major economic development resource for the entire region.”
That said, workforce development remains an issue, according to Willis.
“Our continued challenge and opportunity remains the small size of our experienced manufacturing workforce, and the lack of skilled labor for key positions. We are finishing up the biannual STMA Wage & Benefit Survey for the industry, and I expect to see wages have risen significantly over the past two years, especially for the key skilled positions that are hard to fill.”
Willis said that in response to industry needs, both South Texas College and Texas Southmost College are working with STMA, Workforce Solutions, and industry leaders to develop associate degree programs in Industrial Maintenance Technology/Mechatronics.
“These programs will likely be offered as dual enrollment programs to area high schools, and they will complement the existing Advanced Manufacturing Technology Associate degree programs in place at TSTC and STC. TSTC already has a Mechatronics/Industrial Systems Maintenance Technology degree program that was created several years ago in response to industry requests,” Willis said.
“Once these are in place, we will have an excellent talent pipeline in place to help address the needs of the Manufacturing sector in the region. The biggest unmet demand in the manufacturing industry here (and everywhere) remains for Industrial Maintenance Mechanics/Technicians and CNC Machinists/Tool & Die Makers.”
While the latest numbers show the Valley growing its manufacturing sector, a passionate debate is going on as to whether the region is ready for advanced manufacturing. Earlier this year, on visits to Brownsville and Edinburg, Mario Lozoya, speaking in his personal capacity said the Valley was not ready because it did not have a skilled enough workforce. Lozoya, a McAllen native who now works in San Antonio, is director of government relations and external affairs for Toyota North America.
Carlos Margo, associate dean for industrial training and economic development at South Texas College, immediately disputed Lozoya’s claims. And on Monday, Daniel Morales, former instructor at STC who is now leading Legacy Precision, LLC, also took issue with Lozoya’s assertion.
“I think it is just a misinformed generalization,” Morales said of Lozoya’s claims. He questioned whether Morales had “seen the whole picture” in the Valley. “From a bird’s eye view it is hard to see all the things that are going on. But, there are a whole ton of community leaders who are working for manufacturing in this area. Mission EDC, McAllen EDC. Drive down to the south side (Military Highway) and see the development. Stanley Black & Decker just announced they are coming to the region. So, I believe we are ready for a large manufacturer like Toyota to come here. We have the technical schools that can support it. Compare our figures to the technical schools in San Antonio. We know have Weslaco High School kids graduating with associate degrees in manufacturing. We are in a better shape than San Antonio was when they landed Toyota.”
Edinburg-based Legacy Precision provides technical support to companies in the U.S. and Mexico. “A company might need help developing a process, say a molding process they cannot resolve. They might need production line tooling, we can manufacture and fabricate here,” Morales said.
Hiring three STC students as full-time workers, Morales started Legacy Precision company in 2015.
“I was teaching at STC at the time. I had ten years there. STC is an amazing institution, it has amazing leadership. With our program, we had to build credibility, to work more closely with industry. We had to build a reputation and that reputation was only going to get built by developing good students. Our area is so incredibly diverse, the manufacturing we have. Metal stamping, plastic injection molding, a lot of the precision things are built on this side (of the Rio Grande),” Morales said.
During his last five years at STC, Morales served as program chair of the manufacturing department. “I started to see there were some holes in the manufacturing game in the Valley. I asked myself, how could my students and I break into that and provide a different type of support. We started supporting a couple of little projects here and there. Before we knew it, we got busy enough to start a company. Now, we are working on projects in San Luis, and Guadalajara. We are breaking into the Reynosa-Matamoros market. We have been building a following in Fort Worth. Our specialty is high tech, high precision, work. We are not focused on assembly. We are here to solve production line issues. How a company can be more productive.”
Morales continued: “Do we have the skills and capability to compete in the global workplace in 2018, yes we do. I think our region offers a lot. But, we suffer from this brain drain. Our graduates from the university leave. The pay is not good enough. We need to do something about that. We have to start from the ground up. But, manufacturing is a lot bigger here than people understand. It has grown. Before the 2008 recession hit we had a lot more injection molding companies. But, the market changes. Our proximity to Mexico is crucial. Our workforce is very young. We have a very good supply of talented workers. We have smart kids.”
Asked again if the Valley could attract an advanced manufacturing company, like Toyota, Morales said: “Dual enrollment has been wonderful, amazing. I think we are ready. In 2008, an auto manufacturer (KIA) was looking at this area, but then the recession hit. Those conversations do not go away. It is just a matter of time before it happens. I am not saying the Valley is going to be the next Detroit or some kind of metropolis. I am not trying to sell a vision of grandeur but with who we have here, this Valley is ready for that jump. A bunch of automotive supplies are already here.”
Morales added: “We are one of the poorest regions in the country. When all our best talent is leaving, some of us have to stand up and say, we can do better than that. It takes leadership. I think all the pieces are in place. Is it perfect? I don’t think anything ever is. Being in a state of being ready sends a big message. Manufacturing in the Valley is growing. You cannot look at manufacturing and just say USA. We have this thing called the supply chain and that chain wraps around the world and we are once piece of that.”
Editor’s Note: Videographer Jacqueline Arias contributed to this story from Edinburg, Texas.