BROWNSVILLE, RGV – The much anticipated arrival of a $400 million foundry, metal casting and forging operation in Brownsville will change the face of the Rio Grande Valley, predicts the executive vice president of Brownsville Economic Development Corporation.
Gilberto Salinas was a guest on News Talk 710 KURV’s Morning News show on Monday and he was asked to discuss the big economic development projects coming in 2016. Salinas mentioned three, the SpaceX rocket launching facility at Boca Chica Beach, the liquefied natural gas project being pursued at the Port of Brownsville, and the foundry, machine and forging operation.
Presenter Tim Sullivan asked when the foundry, machine and forging operation might be officially announced.
“I’ve got to be careful how I say this but I would say we are several weeks away – maybe sooner than that – from making an announcement for the first component of the project. When you are getting ready to close any kind of deal it ultimately boils down to the final paperwork and that is where we are at in this particular case. It is pretty encouraging at this point. We have come a long way. We can’t say it is a done deal but it is pretty encouraging at this point. We are hopeful that in the next few weeks, maybe the next month, we can make an announcement on that particular project that, again, is going to change the face of this region,” Salinas said.
The company involved is from Europe but has yet to be named. Salinas said that looking at the project over a ten-year period it is a billion-dollar deal. “It is a foundry, machine operation, with foreign direct investment, one has the potential of creating upward of 4,000 jobs over a ten-year period. True manufacturing jobs in the United States, particularly here in Brownsville, Texas, from machinists to people working at a foundry. It would also include a forging component, aluminum die cast and plastic injection molding for large components,” Salinas said.
Salinas pointed out that when foundries are set up, communities usually are built around them.
“In this case, the community is here, and that is the Rio Grande Valley. When they come in we really can’t imagine how this place is really going to start growing over the next few years, because of these three (foundry, SpaceX and LNG) huge investments. We are already starting to see the spinoff effect in the form of local entrepreneurs. Moving into 2016, people here in the Rio Grande Valley are starting to really take on the entrepreneurial spirit, that Texan spirit, if I can coin it that way, and trying to take advantage of these opportunities.”
On the subject of the SpaceX project, Salinas said: “It is not a billion-dollar project but it has the potential to get into the billions of dollars with what Elon Musk, the founder and president of the company, is looking to do. And, ultimately, at his groundbreaking ceremony about a year ago he told the world from Boca Chica Beach that this could very well be the place where inter-planetary human travel could occur. So, if you look at it from that perspective what this project could do five, ten years down the road, or let’s say 20 years down the road, yes, I guess it could reach a different level.”
Asked to compare the closing of the deal on the foundry, machining and forging project with that of SpaceX, Salinas said: “It is like apples and oranges. You really can’t compare these projects. Both projects are backed by billionaire entrepreneurs. They are very interesting individuals to work with and I don’t mean in a negative way. Here we are in the Rio Grande Valley negotiating, working deals with these billionaires who are now rock stars worldwide. The difference between these two is that this foundry machine forging operation is… the first time we met with them they said, like, ‘yes, we just celebrated our 150th anniversary.’ That is how long these companies have been around in Europe. Texas was still a country back then, or pretty close to it. In their words, ‘once we build a foundry we build it for 100 years, we don’t just pack up and go.’
“With SpaceX it is the total opposite. It has been an entrepreneur, tech, rocket scientist per se who made his billions. He made his billions through what America was founded on, which is that entrepreneurial spirit. He is going 100 miles an hour with his ideas, his way of thinking. The first time we met with him it was like, yeah, we want to launch rockets off the Gulf of Mexico coast and Brownsville is an area we are looking at. This was about four years ago. Towards the end of the conversation he starts talking about wanting to colonize Mars. We had to go back to our leadership in Brownsville and say, we have a company that wants to launch rockets because they want to colonize Mars. Today, it is more of a common theme. You are seeing it in the movies, there are more articles about it.”
There was less conversation on KURV about the LNG project, perhaps because it is less popular with the general public. Environmental groups like the Sierra Club and local communities near the Port of Brownsville have come out against LNG export terminals at the Port of Brownsville, claiming they could damage the environment. On LNG, Salinas said: “We have got three major projects that are in the billions of dollars. With Annova, the largest, it is six or seven billion dollars in capital investment and upwards of 400 to 500 jobs. The others are in the one to two billion-dollar range. We are still about a year out to get environmental clearance. We are working it. We are pretty encouraged that we will get at least one of these plants here at the Port of Brownsville.”
Discussion about LNG terminals or rocket launching facilities or heavy manufacturing foundries for the Valley shows just how much progress has been made in the region, Salinas said. “Several years ago we were pretty excited with ten, 20, 30 million-dollar capital investments. As of the last three years, these projects are in the billions of dollars. That is just unheard of for a community of our size.”
Salinas added: “Economic development in the Rio Grande Valley right now is at a very interesting stage because we are having to grow from a traditional manufacturing, international logistics region to these huge projects that are forcing us in a way to think outside the box, to create boxes outside of that box we created.”
Salinas had started the interview by saying a lot of new capital is coming into the region, especially from Latin America. In 2015, Salinas said, there was a gain of 460 manufacturing jobs and 1,100 “spinoff” jobs. “This (manufacturing base) is how you generate wealth in a region,” Salinas said. “Overall, we gained 2,000 jobs in Brownsville alone. Our unemployment rate is six percent, the lowest we have seen since 2008. We are definitely trending in the right direction. Consumer confidence is up.”