MCALLEN, Texas – Increased automation in the production processes used in maquiladoras, including robots and artificial intelligence, is making Mexican-based manufacturers consider moving their operations to South Texas.
This is the view of McAllen Economic Development Corporation President Keith Patridge.
At a recent board of directors meeting, Patridge pointed out that old business model saw capital intensive manufacturing being set up in the United States and labor intensive manufacturing being based in Mexico. But, he said, because robots are increasingly replacing humans on the production line, the U.S. is becoming more attractive.
Patridge explained as much in his monthly president’s report.
“This month we are actively working 21 companies. Those 21 involve about 2.7 million square feet of space, 7,930 jobs and about $2 billion worth of capital investment,” Patridge said.
“And, we have two new companies this month, the ones in blue on the screen. One of them is a Japanese automotive company. And the other is a Mexico company.”
Patridge continued: “We are seeing a lot more Mexico companies that are now looking at setting up operations in McAllen, which is a very positive thing, I think. We’ve always seen the retail portion and the pleasure traveler, but we haven’t had that many of the business companies (show interest in McAllen) and we’re beginning to see that.”
Patridge then explained the rationale.
“I think a lot of it has to do with the change in business model. We’re seeing a lot more companies that are having a lot more automation involved in their operation. And when you start looking at costs, actually the U.S. side is just as cost effective in many cases as Mexico.”
Patridge said he thinks this trend will continue.
“We hope it does because that just strengthens that relationship between Mexico and McAllen.”
Patridge also reported that he had given a keynote speech at the recent 2023 State of Real Estate Forum hosted by Edwards Abstract & Title Company.
“”t was the largest forum they have ever put on. This year was a little bit different because Ted Jones, who is always the guest speaker that comes in for Edwards, really had kind of a downer presentation. He did not see the economy doing well at all for the rest of this year. And so I tried to make it a little bit more upbeat,” Patridge said.
“But, the one thing that Ted did tell me, as a sidebar, was… he said the only place that he is really upbeat about is South Texas. I think probably tells that to every city he goes to but it made you feel good.”
