BROWNSVILLE, RGV – There are huge opportunities for local supplies to the auto industry in Matamoros and Brownsville area because of the incredible growth in motor vehicle production in Mexico.
This is the opinion of Roberto Mattus, director of INDEX Matamoros, a trade association for the maquila industry. Mattus gave a presentation recently at an international trade symposium in Brownsville.
“In Matamoros, we have an enormous opportunity over the next few years because of the growth of the automotive assembly plants that we have in Mexico,” Mattus told the Rio Grande Guardian.
“The sales are growing fast. We expect the number of new vehicles produced in Mexico to grow from 3.5 million cars this year to 5 million in 2020. In Matamoros, 60 percent of our maquila output is geared to producing parts for the interior of the car. So, we see a tremendous opportunity for the region to sell more parts. We want to see more local entrepreneurs in the supply chain, creating more parts for the industry.”
Auto parts produced in Matamoros do not just go to the interior of Mexico, Mattus said. They are also sent to auto plants in the United States and Canada. Even Europe in some cases, he said.
Asked if the anti-Mexican car production rhetoric that has emanated from Washington, D.C., this year has hurt business, Mattus said: “Not at all. Trade is very good right now. This year has been very good for the industry. The growth is around 5,000 new jobs in the area. Existing companies are taking on more products, more lines. Our existing plants are growing very well.”
Mattus reported that Matamoras has 117 maquila plants that are currently hiring 75,000 direct workers.
Meanwhile, Sergio Castro, president of INDEX Reynosa, has also given a recent report. Castro, a former national leader for INDEX, focused more on the challenges facing maquilas when he spoke to the McAllen Economic Development Corporation’s board of directors meeting.
Castro started his report by praising McAllen EDC.
“MEDC cannot do its job without the maquilas in Reynosa and vice versa. It is a complete marriage, it has been for many, many, years. And it will continue, that is why it is so great,” Castro said.
Castro pointed out that he and other INDEX leaders met with Tamaulipas Governor Francisco Garcia Cabeza de Vaca recently. The event was held at a hotel in Reynosa and included about 17 mayors from across Tamaulipas along with most of the Governor’s Cabinet.
“We told the Governor, markets are not dumb. Markets always go where the best conditions are to develop. That is what is happening and we are taking advantage,” Castro said.
Two of the current challenges, Castro said, are labor shortage and labor stability.
“We were in our comfort zone and this applies not just to the labor shortage but also labor stability. We have a union that wants to take over. We have to work on this. We are still working on it. We have to send a clear message,” Castro said.
Castro said he has met with Cabeza de Vaca since he took over as Governor last year. “I known him since I was at the national level and he was becoming mayor (of Reynosa). He knows who we are and we know who he is. Politics is politics, but he has to understand that we are here for good and they (elected officials) are here for only four or six years. Businesses are for a long time. This was the primary message we sent.”
The current labor shortage in Reynosa could be as high as 30,000, Castro reported. However, he was not pessimistic.
“It is better to say we have a lot of work, rather say, what are we going to do with them all. It is good to have business. Now, how are we going to resolve the problem. We have to solve it ourselves. That is what INDEX is doing now.”
Castro said INDEX has been meeting with the federal government in Mexico City to see if a system can be put in place to attract immigrants that have been deported from the United States.
“How can we can attract and keep some of those deported people that are coming back from the States? There is a lot of good people there. It is not going to be easy because it involves housing, it involves infrastructure,” Castro said.
Among the Tamaulipas officials INDEX has spoken with, Castro said, are Cabeza de Vaca and Reynosa Mayor Maki Ortiz Dominguez. “The Governor, Maki, say they do not have money but we have to solve the problem. That is why we all pay taxes. We are going to work with MEDC on this because it is all about teamwork,” Castro said.
Another challenge facing maquila plant managers, Castro, said is the reliability of electricity. He pointed out that three weeks ago, Nuevo Laredo was plunged into darkness for days.
“I told the Governor, we cannot afford to be out of production for one or two days. Just a couple of minutes is costly for all those fancy assembly lines. We spoke with the people that were complaining about the lack of electricity and we said, why do you not have your own generators? Come on, if you have an income of a billion dollars a year, how come you don’t spend a hundred or fifty million to keep your business running,” Castro said.
President Trump has moved the maquila industry out of its comfort zone, Castro reported. But, he said that was not necessarily a bad thing.
“We were in a comfort zone. I don’t want to thank Trump for what he did in creating all this mess, but it is helping us react as a community, to take precautions and be proactive in solving the problems and I think we are doing that,” Castro said.
The final point Castro made was the need for maquilas in Reynosa to present a good image. He was alluding to the violence that has beset the city.
“We have to work on our image. A lot of people are utilizing and taking advantage of all the bad words. I am talking marketing here. You know that. Because, they (competitors) want to bring business to their area,” Castro reported.
“Before, no one wanted to go to Matamoros, now they want to change directions and say, Reynosa is bad. McAllen, you can buy stuff somewhere else, such as Nuevo Laredo, where things are better. I think we really have to push our image, that we are great.
“I did that when I was president in 2003-2005 when Juarez lost about 150,000 people, Tijuana about the same. People would ask, how is Reynosa. I would say, it is great, we are doing business. Even if we were not really growing, we were stable. People listened.
“It all depends on your attitude and our attitude has to be positive all the way around. I don’t think you gain anything by drawing on the bad things.”
Editor’s Note: The main image accompanying this story shows a VW Golf being assembled at Volkswagen’s auto plant in Puebla, Mexico. Auto suppliers in Matamoros manufacture parts for the Puebla plant, says INDEX Matamoros Director Roberto Mattus. Photo courtesy of Volkswagen México.