Top Banner
Texas Vehicle & Heavy Equipment Manufacturing Overview April 2013
32

Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook

Sep 12, 2014

Download

Business

This TMASC factbook describes the existing automotive and heavy vehicle manufacturing sector in Texas and Northeastern Mexico. Additionally, it provides a comparative analysis of the Texas corporate environment with other select states.
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Page 1: Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook

THE MOST COMPETITIVE REGION FOR MANUFACTURING IN THE WESTERN HEMISPHERE

TEXAS AUTOMOTIVE MANUFACTURING2013 SITE SELECTION FACT BOOK

Prepared by Bexar County Economic Development www.bexar.org

Texas Vehicle & Heavy EquipmentManufacturing Overview

April 2013

Page 2: Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook

Prepared by: Hon. Kevin WolffCounty Commissioner, Pct. 3County of Bexar, Texas101 W. Nueva St., 10th FloorSan Antonio, Texas 78205 USA

T: (210) 335-2618www.bexar.org

Page 3: Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook

3Bexar County, Texas

Table of Contents »

This document is a factbook prepared by Bexar County. The data provides a competitive

analysis of Texas that demonstrates the Lone Star State is the most strategic site for vehicle

assembly and heavy equipment manufacturing.

State of Texas: Top Economic Performer in U.S........................................................................ Page 5

Incentives ........................................................................................................................................... Page 6

Tax Environment .............................................................................................................................. Page 9

Strategic Region: Texas-Mexico Automotive SuperCluster (TMASC) ................................. Page 11

TMASC is the Capital for Truck, SUV, and Heavy Equipment Manufacturing .................... Page 12

TMASC Supplier Density............. .................................................................................................... Page 13

TMASC is the North American Epicenter of Trade ................................................................... Page 16

Competitive Manufacturing Bolstered by Robust Infrastructure ......................................... Page 17

Shorter Time to Market For Large Consumer Regions ........................................................... Page 20

Increase Market Share Among the Hispanic Demographic ................................................... Page 21

Texas Automotive Market ............................................................................................................... Page 23

Strategic Workforce Advantages ................................................................................................. Page 24

Diverse Energy Portfolio for Sustainable Manufacturing ....................................................... Page 27

View additonal data online at www.txmxautomotivecom.

Page 4: Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook

4 Bexar County, Texas

No other U.S. state is home to more Fortune 1000

corporate headquarters. Texas ranked #1 on the

2012 Fortune 1000 list with 103 companies and #2

on the 2012 Fortune 500 list with 52 firms.

If Texas were a nation, it would rank as the 14th

largest economy in the world based on GDP,

ahead of Mexico, South Korea, the Netherlands,

Turkey, and many others.

Page 5: Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook

5Bexar County, Texas

State of Texas:Top Economic Performer in U.S. »

“As a state, we will remain committed to upholding the pillars to our success, including low taxes, restrained spending, reasonable regulations and a fair legal system...” - Hon. Rick Perry, Governor, State of Texas

Texas is one of the top U.S. state economies that leads the nation in

pro-business policies and international trade.

Various indicators show the strength and vitality of the Texas economy.

An array of industries contributed to Texas’ ability to come out of the

Recession quicker than other states. Those industries include: industrial

manufacturing, biotech and life sciences, information and electronics,

professional and financial services, and aerospace and aviation.

According to the Texas’ Comptroller’s Office, from 2001 to 2010, U.S.

real Gross Domestic Product (GDP) grew by 17% while Texas’ real Gross

State Product (GSP) grew by 24% over the same period. Texas replaced

all of its recession-hit jobs by December 2011, adding a wide variety of

jobs in industries such as manufacturing, oil and gas, and professional

and business services.

Texas leads the nation in exports and has for 11 consecutive years since

2002. The Texas unemployment rate has been at or below the national

rate for 72 consecutive months and was 6% for December 2012.

Gross Domestic Product (GDP) by State

State2011

(in millions of USD)Percent of U.S. Total

U.S. 14,981,020 100%

Texas (TX) 1,308,132 9%

Alabama (AL) 173,122 1%

Georgia (GA) 418,943 3%

Mississippi (MS) 97,810 1%

Tennessee (TN) 266,527 2%

Source: U.S. Bureau of Economic Analysis.

Texas Select Business Highlights

March 2013Texas wins Site Selection’s

2012 Governor’s Cup for having

the most new and expanded

corporate facilities over the past

year. Texas had 761 projects in

2012, a 65% increase over 2011.

February 2013Texas dominates Forbes’ “Best

Cities for Good Jobs” list. Dallas

topped the list, followed by #2

Houston, #3 Austin, #4 Fort

Worth, and #6 San Antonio.

Cities were ranked according to

recent and expected job growth,

current unemployment rate, and

current and expected per-capita

income.

January 2013Business Facilities names

Texas 2012 State of the Year

because of its dynamic,

recession proof economy.

May 2012

Chief Executive’s 8th annual CEO

Survey ranks Texas as the best

state to do business for the 8th

consecutive year.

Page 6: Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook

6 Bexar County, Texas

Industry Snapshot:Select Texas Incentive Package for Automotive Assembly Project

Ten years ago the State of Texas and

local community partners provided

the following incentive package for

an automotive assembly facility.

Project impact:

• More than $2.7 billion in direct

and indirect capital investment,

and

• Approximately 5,700 total

jobs from assembly plant and

suppliers.

$133M Incentive Package:

• $27 million for job training and

recruitment,

• $15 million for a rail district,

• $47 million in phased-in taxes

and waived fees,

• $15 million for site

utility infrastructure,

• $14 million for land,

• $10 million for site

preparation, and

• $3 million for a city-provided

job-training center.

Incentives »

The State of Texas and local communities are committed to offering the most competitive incentive packages for foreign direct investment projects. Below is a general overview of incentives followed by a breakdown of specific tax-related incentives.

State Incentive: Texas Enterprise Fund (TEF)

The Texas Enterprise Fund (TEF) was established in 2003 and is the

largest “deal-closing” fund of its kind in the U.S. The TEF is used

as a final incentive tool for projects that offer significant projected

job creation and capital investment and where a single Texas site is

competing with another viable out-of-state option.

State Enterprise Zone Program

The Texas Enterprise Zone Program is a tool for communities

to partner with the State to promote job creation and capital

investment in economically distressed areas. Designated projects

are eligible for state and use tax refunds on taxes paid for equipment

and machinery, materials, taxable services, electricity and other

business expenses.

Workforce Development

Workforce programs are provided through the Texas Workforce

Commission to fund customized job training initiatives. The

Commission also disburses grants to community and technical

colleges for businesses who want to train new workers.

Grants

Qualified communities can access several types of grants to fund

public infrastructure (water, sewer, roads, etc.) and real estate

development (acquisitions, construction, and/or renovation)

needed to assist a business which commits to create and/or retain

permanent jobs, primarily for low and moderate-income persons.

Page 7: Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook

7Bexar County, Texas

Incentives cont’d »

Tax Incentives BreakdownState and local communities offer a variety of tax incentives and innovative solutions for corporations to expand in Texas. Programs include Enterprise Zone sales tax refunds, manufacturing sales tax exemptions, property tax value limitation, and freeport exemptions.

Texas Enterprise Zone ProgramThe Texas Enterprise Zone Program is an economic development tool for local communities to partner with the State of Texas to promote job creation and significant private investment that will assist economically distressed areas of the state. Approved projects are eligible to apply for state sales and use tax refunds on qualified expenditures. The level and amount of refund is related to the capital investment and jobs created at the qualified business site.

Manufacturing ExemptionsTangible PropertyState sales and use tax exemptions are available to taxpayers who manufacture, fabricate or process tangible property for sale. The exemption generally applies to tangible personal property involved in the manufacturing process.

Natural Gas & ElectricityTexas manufacturing companies may be exempt from paying state sales and use tax on electricity and natural gas used in manufacturing, processing, or fabricating tangible personal property.

Value Limitation and Tax Credits (Texas Economic Development Act)An appraised value limitation may be extended to a taxpayer who agrees to build or install property and create jobs in exchange for an eight-year limitation on the taxable value of the property. The value limitation applies to the local school district maintenance and operations tax (M&O) portion of the property tax and a tax credit.

Freeport ExemptionsA freeport exemption is a property tax exemption. Freeport property includes various types of property that are detained in Texas for a short period of time (175 days or less) to be transported out of Texas. The goods must be in Texas for certain purposes.

Pollution Control Equipment IncentiveA Texas constitutional amendment providing an exemption from property taxation for pollution control was approved in 1993. The intent was to ensure that compliance with environmental mandates, through capital investments, did not result in an increase in a facility’s property taxes.

Renewable Energy IncentivesVarious tax exemptions, franchise tax exemptions, and franchise tax deductions are available for renewable energy equipment and systems. Renewable energy encompasses solar, wind, ethanol, and biodiesel energy.

Defense Economic Readjustment Zone ProgramThe Defense Economic Readjustment Zone Program (DERZ) was established to stimulate business recruitment and job creation in adversely impacted defense-dependent communities. DERZ can provide assistance to Texas communities, businesses, and workers impacted by, or vulnerable to, the closure or realignment of military installations and the reduction of federal defense contracting expenditures.

Page 8: Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook

8 Bexar County, Texas

Incentives cont’d »

Select Texas Enterprise Fund (TEF) Projects

Company Location IndustryDirect Jobs

Capital Investment TEF Award

Est. Total Jobs

Year Announced

Rackspace Windcrest Web Hosting 4,000 $111,380,000 $22,000,000 10,360 2007

Apple AustinComputer

Hardware/Software 3,635 $304,000,000 $21,000,000 10,685 2012

Triumph Aerostructures (formerly Vought) Dallas Aerospace Mfg. 3,000 $598,000,000 $35,000,000 29,377 2004

Caterpillar SeguinEngine/

Machinery Mfg. 1,714 $176,800,000 $8,500,000 3,178 2008

T-Mobile FriscoWireless

Communications 855 $20,700,000 $2,150,000 2,062 2006

Santana Textiles Edinburg Textile Mfg. 800 $171,000,000 $1,650,000 1,232 2008

Visa Austin Financial Services 794 $27,240,000 $7,900,000 2,835 2012

GE Transportation Fort Worth Locomotive Mfg. 775 $96,000,000 $4,200,000 2,978 2011

Klein Tools Mansfield Hand Tool Mfg. 585 $18,000,000 $2,800,000 1,589 2010

Lockheed Martin Houston Aerospace Mfg. 550 $58,000,000 $5,480,000 2,043 2004

Continental Automotive Seguin

Automotive Parts Mfg. 300 $113,000,000 $1,200,000 522 2012

Becton, Dickinson & Co. San Antonio Medical Devices 296 $6,350,000 $1,560,000 570 2010

Caterpillar VictoriaConstruction

Machinery Mfg 238 $122,725,000 $1,175,000 1,943 2010

Layne Christensen Co.

The Woodlands

Heavy Construction HQ 210 $10,350,000 $1,300,000 847 2012

Pactiv CorsicanaPlastic

Product Mfg. 200 $58,000,000 $930,000 515 2012

JTEKT Ennis Automotive Parts 200 $30,000,000 $333,000 562 2004

Jyoti Americas ConroeElectrical

Transmission Equip 157 $27,610,250 $865,000 419 2010

Dow Chemical Freeport Chemical Mfg. 150 $1,700,000,000 $1,000,000 631 2012

CK Technologies BrownsvilleTruck

Component Mfg. 121 $18,200,000 $425,000 156 2010

Source: State of Texas, Office of the Governor, Rick Perry.

Page 9: Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook

9Bexar County, Texas

Tax Environment »

Zero Corporate or Individual Income Tax

With no corporate income tax and no individual income tax, Texas has one of the lowest tax burdens in the country and ranks as a Top 10 Best State in the Tax Foundation’s 2012 State Business Tax Index.

Franchise TaxIn 2008, Texas replaced its franchise tax with a margins tax in order to establish a broader, fairer tax assessed at a lower rate. The goal of the reformed tax was to provide a level playing field for all businesses, to have a broad base that includes all business entities that receive liability protection from the state, to be competitive with other states to maintain Texas’ reputation for having one of the best business climates in America, and to reflect the realities of a rapidly evolving economy. The reformed margins tax lowered the primary franchise tax rate from 4.5% to a tax of 1% on gross receipts less compensation or cost of goods sold.

Property TaxTexas has no property tax at the state level. Local governments and special taxing districts levy taxes on real and tangible personal property. All property is appraised at full market value and is assessed on 100% of appraised value. The total tax rate is the sum of all taxing units including cities, counties, schools and special districts.

Local governments have the option to exempt goods in transit, or “freeport goods”, from ad valorem taxation. Freeport goods are inventories acquired or brought into the state by businesses and held for no more than 175 days before being shipped out of the state. Local governments can offer to businesses an abatement of local ad valorem taxes on real and personal property for up to ten years.

Sales & Use TaxThe state levies a sales and use tax of 6.25% on sales of tangible personal property and certain services. Additionally, cities, counties, and transit authorities may add to the rate for a combined state and local rate of 8.25%.

Sales and use tax exemptions are offered on machinery and equipment used in the manufacturing process and on natural gas and electricity when sold to commercial businesses that are “predominately” manufacturing. Sales and use tax exemptions may also be available to qualifying businesses in Enterprise Zones.

Page 10: Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook

10 Bexar County, Texas

Tax Environment »

Tax Climate by Select State Comparisons (2013)

State Individual Income Tax Corporate Income Tax Sales Tax

Texas (TX)

0% 0% 6.25%

Alabama (AL)

5% top rate

6.5% flat rate

4%

Georgia (GA)

6% top rate

6% flat rate

4%

Mississippi (MS)

5% 3 brackets

5% 3 brackets

7% Sales and excise taxes

Tennessee (TN)

6% flat rate

6.5% flat rate

7%

Source: Tax Foundation.

State Business Tax Climate Index Comparisons, 2011 – 2013

2013 2012 2011Change from 2012 to 2013

State Rank Score Rank Score Rank Score Rank Score

TX 9 6.09 9 6.09 9 6.12 0 0.00

AL 21 5.26 20 5.24 21 5.28 -1 +0.02

GA 34 4.86 34 4.92 35 4.83 0 -0.06

MS 17 5.37 17 5.39 18 5.39 0 -0.02

TN 15 5.67 13 5.69 13 5.72 -2 -0.02

Note: A rank of 1 is more favorable for business than a rank of 50. A score of 10 is more favorable for business than a score of 0. All scores are for fiscal years. D.C. score and rank do not affect other states.Source: Tax Foundation.

Page 11: Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook

11Bexar County, Texas

Strategic Region:Texas-Mexico Automotive SuperCluster »

Texas-Mexico Automotive SuperCluster (TMASC) Region:

» Bi-national U.S. - Mexico manufacturing region

» States: Texas, Coahuila, Nuevo León, San Luis Potosí, Tamaulipas

» 8 automotive assembly and parts plants

» 7 commercial and military vehicle plants

» 10 heavy equipment manufacturers

» 3 specialty vehicle plants

» Over 230 OEM supplier plants

» Formula One Circuit of The Americas

Page 12: Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook

12 Bexar County, Texas

The TMASC Region is home to eight automotive assembly plants and parts plants. These plants employ over 17,000

workers and have a production capacity of over 800,000 units. In addition, there are seven commercial and military

vehicle manufacturing plants. Heavy equipment manufacturers in the region include Caterpillar, John Deere, Kalmar

RT, and Manitou, which together have ten plants in the region. There are also three specialty vehicle manufacturers.

Skyline manufactures recreational vehicles, Supreme Corp manufactures van bodies and armored vehicles, and

Frazer Bilt manufactures emergency response vehicles. The majority of the plants are clustered along the NAFTA

Highway, which consists of I-35 in Texas and MX-85 and MX-57 in Mexico.

Company Category Product City, State, Country

Chrysler Automotive Parts Engines Ramos Arizpe, COAH, MEX

Chrysler Automotive Light Trucks Saltillo, COAH, MEX

Chrysler Automotive Stamping Saltillo, COAH, MEX

GM Automotive Light Trucks Arlington, TX, U.S.

GM Automotive Stamping Arlington, TX, U.S.

GM Automotive Cars, Light Trucks, Engines, Transmissions Ramos Arizpe, COAH, MEX

GM Automotive Cars, Transmissions San Luis Potosí, SLP, MEX

Toyota Automotive Light Trucks San Antonio, TX, U.S.

BAE Systems Commercial and Military Vehicle N/A Sealy, TX, U.S.

Capacity of Texas Commercial and Military Vehicle Industrial Trucks and Trailers Longview, TX, U.S.

Daimler - Freightliner Commercial and Military Vehicle Class 8 Trucks Saltillo, COAH, MEX

Marcopolo Commercial and Military Vehicle Buses Monterrey, NL, MEX

Navistar - International Commercial and Military Vehicle Class 6-8 Trucks Escobedo, NL, MEX

Peterbilt Commercial and Military Vehicle Class 6-8 Trucks Denton, TX, U.S.

Caterpillar Heavy Equipment Parts Engine Heads Schertz, TX, U.S.

Caterpillar Heavy Equipment Parts Engines Seguin, TX, U.S.

Caterpillar Heavy Equipment Parts Excavator Buckets Waco, TX, U.S.

Caterpillar Heavy Equipment Hydraulic Excavators Victoria, TX, U.S.

Caterpillar Heavy Equipment Excavator cabins, Components Ciénega de Flores, NL, MEX

Caterpillar Heavy Equipment Mining Trucks Ciudad Acuña, COAH, MEX

John Deere Heavy Equipment Agricultural Machinery, Tractors Garza Garcia, NL, MEX

John Deere Heavy Equipment Agricultural Machinery, Tractors Saltillo, COAH, MEX

John Deere Heavy Equipment Lawn Mowers, Agricultural Equipment Ramos Arizpe, COAH, MEX

Kalmar Heavy EquipmentRough terrain material handling vehicles

Cibolo, TX, U.S.

Manitou North America Heavy Equipment Forklifts Waco, TX, U.S.

Frazer Bilt Specialty Vehicles Emergency Response Vehicles Houston, TX, U.S.

Skyline Specialty Vehicles Motor Homes, Trailers Mansfield, TX, U.S.

Supreme Corp Specialty Vehicles Van Bodies, Armored Vehicles Cleburne, TX, U.S.

Source: ELM Analytics, TIP Strategies research.State abbreviations: Texas (TX), Coahuila (COAH), Nuevo León (NL), San Luis Potosí (SLP), Tamaulipas (TAMPS)

TMASC is the Capital for Truck, SUV, and Heavy Equipment Manufacturing »

Page 13: Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook

13Bexar County, Texas

TMASC Supplier Density »

According to ELM Analytics, the TMASC Region has more

than 230 OEM suppliers that employ over 130,000 workers.

Strong clusters of suppliers have developed in the Dallas-Fort Worth area, in

the Monterrey-Saltillo Corridor, and straddling the border in the Lower Rio

Grande Valley. Most of the top global OEM parts suppliers are located in the

TMASC Region. Of the top 15 global suppliers, 12 have a significant presence

in the region.

TMASC’s OEM supplier base is robust. In terms of employment, it is comparable

to that of Michigan’s. Coahuila and Tamaulipas each rank in the Top Ten

Supplier States in North America. Nuevo León ranks 16th and Texas 24th. In

terms of the number of supplier plants, only Michigan, Ohio, and Ontario have

more supplier plants than the TMASC Region.

Suppliers within 400 miles of the TMASC’s NAFTA Highway

TMASC has a robust supplier network

located within the region and is in close

proximity to other large supplier clusters.

From TMASC, an assembly plant can

access supplier networks in Oklahoma,

Arkansas, Louisiana, Puebla, Mexico, and

Guanajuato within 400 miles.

According to ELM Analytics, the TMASC

Region has more than 230 OEM suppliers

that employ over 130,000 workers. Most

of the top global OEM parts suppliers are

located in the TMASC Region.

Top Global Suppliers in TMASC

Aisin (JP)

Bosch (DE)

Continental (DE)

Delphi (USA)

Denso (JP)

Faurecia (FR)

Johnson Controls (USA)

Lear Corporation (USA)

Magna (CAN)

TRW (USA)

Yazaki (JP)

ZF (DE)

Source: ELM Analytics.

Page 14: Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook

14 Bexar County, Texas

TMASC Supplier Density cont’d »

TMASC Supplier Count

State within TMASC Region # of Suppliers Employment

Coahuila, Mexico (COAH) 58 44,013

Nuevo León, Mexico (NL) 46 26,003

San Luis Potosí, Mexico (SLP) 19 5,899

Tamaulipas, Mexico (TAMPS) 52 44,632

Texas, U.S. (TX) 55 13,694

TMASC TOTAL 230 134,241

Source: ELM Analytics, TIP Strategies research (2011).

Supplier plants located within TMASC

are generally larger than traditional U.S.

automotive manufacturing states.

Average employment per plant in the TMASC

region is 584 workers per plant. For comparison,

the average employment per plant in Michigan is

163 and in all of North America is 307.

Industry Snapshot:

Texas Successfully Supports a Global Assembly Plant with On-site Suppliers

Toyota Motor Manufacturing, Texas, Inc. (TMMTX), established in 2006, was the first OEM in North America

to co-locate suppliers on the same campus with its assembly plant for the Tundra full-size truck and Tacoma

pick-up truck. TMMTX is located on 2,000 acres of flat land just south of downtown San Antonio. The

assembly plant includes state-of-the-art stamping, welding, paint, and plastics facilities.

Integrated into the main plant are 21 individual and parts suppliers who separately produce/assemble on 1.8

million square feet. On-site suppliers expand total on-site team members by an additional 2,100 workers.

TMMTX took a unique approach to on-site supplier selection by leveraging the opportunity to increase its

minority-owned supplier base. Of the 21 on-site suppliers, seven are minority owned and six are new joint

ventures between well established U.S./Japanese suppliers and San Antonio businesses.

Key benefits generated by TMMTX on-site suppliers:

• Reduced shipping and logistics costs

• Lowered supply chain disruptions and risks for just-in-time production

• Immediately strengthened communication for modifications and production adjustments

• Increased percentage of locally sourced parts and components

• Expanded U.S. minority supplier base

• Created local brand recognition in the U.S. market

• Strengthened leadership in workforce diversity and inclusion initiatives

Page 15: Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook

15Bexar County, Texas

Number of OEM TIER 1 Supplier Plants by State: Cars & Light Trucks

OEMCoahuila (COAH)

Nuevo León (NL)

San Luis Potosí(SLP)

Tamaulipas (TAMPS)

Texas (TX)

Audi 0 1 0 1 0

BMW 3 2 1 5 1

Chrysler 29 23 12 23 23

Fiat 0 1 0 0 0

Ford 31 28 13 29 25

GM 39 23 16 39 23

Honda 2 5 0 6 11

Hyundai 1 0 0 0 0

Jaguar 0 1 0 2 1

Land Rover 0 0 0 0 1

Mazda 0 1 0 2 1

Mercedes-Benz 4 6 4 5 0

Mitsubishi 1 2 0 5 5

Nissan 12 14 12 13 2

Porsche 0 0 0 1 0

Renault 5 3 2 1 0

Subaru 3 0 0 4 2

Toyota 8 7 0 9 11

Volkswagen 15 10 9 7 1

Volvo 1 1 1 0 3

Source: ELM Analytics, TIP Strategies research (2011).

Largest Supplier Plants by Employment

Parent Assembly Plant City State Employment

Alcoa Arneses y Accessorios de Mexico Ciudad Acuña COAH 9,300

Delphi Delnosa (Plants I – V) Reynosa TAMPS 6,600

Cifunsa Cifunsa (Plants I – IV) Saltillo COAH 5,813

Delphi Deltronicos de Matamoros Matamoros TAMPS 5,200

Texas Instruments Texas Instruments Sherman TX 3,600

AEES Manufacturera de Componentes Electricos de Mexico Piedras Negras COAH 3,500

Nemak Nemak (Plants I – IV) Garza Garcia NL 3,300

Trico Trico Componentes Matamoros TAMPS 3,200

Takata Falcomex Ciudad Acuña COAH 2,500

TRW TRW Vehicle Safety Systems de Mexico Reynosa TAMPS 2,400

Source: ELM Analytics, TIP Strategies research (2011).

Page 16: Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook

16 Bexar County, Texas

TMASC is the North American Epicenter of Trade »

The TMASC region facilitates robust intra-industry trade between the U.S., particularly between Texas and Mexico.

Texas has the longest border with Mexico of any U.S. state that is dotted with suppliers, final assemblers, and

logistics providers on both sides. It is common for engine blocks to cross the border, return as engines, and cross

once more as assembled autos.

Intra-industry trade solidifies Texas’ ranking as the third state for transportation equipment exports - valued at over

$25.2 billion - with Mexico and Canada as the top two destinations, respectively. Underlying cross-border activity is

NAFTA’s rule of origin which provides duty-free entry for goods with 62.5% American, Mexican, or Canadian content.

Further facilitating trade is key infrastructure within TMASC. Automakers located in Texas access the largest U.S. rail

and road infrastructure, and the most U.S. ports of entry to ensure assembly plants have uninterrupted access to the

world for in-bound and out-bound logistics.

Texas assemblers like GM, Toyota, Caterpillar, and Peterbilt, export their products by leveraging U.S. (19) and Mexico

free trade agreements to enter foreign markets. As a result, Texas’ consistent ranking as the top exporting U.S.

state for the 11th consecutive year in 2012 with over $251 billion (USD) of goods further illustrates the region’s global

manufacturing environment.

TMASC Region Preferential Trade Partners

Texas assembly plants operate at the epicenter of international trade within the North American Free Trade Agreement (NAFTA) corridor.

Page 17: Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook

17Bexar County, Texas

Competitive ManufacturingBolstered by Robust Infrastructure »

Border CrossingsThe TMASC Region includes 12 border crossings.

Five of these crossings rank in the top 20 busiest

U.S. border crossings for truck traffic. Four of

these crossings – Brownsville, El Paso, Laredo,

and McAllen – each see over seven million

vehicles, trucks, and rail cars transit bi-nationally

each year.

Laredo, with four vehicle bridges and one rail

bridge, has the most cross-border traffic in the

region. Laredo is also the most active crossing

for commercial trucks, with 1.6 million crossing

in 2010. McAllen, El Paso, and Pharr are very

active crossings for commercial trucks as well.

Multi-Modal Facilities & Inland Ports A wide range of multimodal facilities are

available in the TMASC Region. Air-to-truck

connections are available at many airports

including the Alliance in Fort Worth, Amarillo,

Austin, Brownsville, Dallas - Fort Worth, El Paso,

Houston Intercontinental, Laredo, Lubbock,

and San Antonio.

In addition, ports throughout TMASC have truck-port-rail connections, including Port Arthur, Houston, Galveston,

Port Lavaca, and Brownsville. Railroads have installed intermodal facilities around TMASC in areas with advantages

for logistics and warehousing.

BNSF has five intermodal facilities in Texas: Amarillo, El Paso, Fort Worth, Houston, and the Port of Houston.

Kansas City Southern has seven intermodal facilities in the TMASC region: Dallas, Laredo, and Rosenberg in Texas, and Altamira, Ramos Arizpe, Saltillo, and San Luis Potosi in Mexico.

Union Pacific railroad has six intermodal facilities in Texas: Dallas, Donna, El Paso, Houston, Laredo, and San Antonio.

2010 North & Southbound Crossings by Truck Source: Texas A&M International University.Note: Truck information includes only 2 to 6 Axle Loaded and Unloaded Commercial Vehicles.

Page 18: Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook

18 Bexar County, Texas

Competitive ManufacturingBolstered by Robust Infrastructure cont’d »

TMASC Class I RailroadSource: U.S. Department of Transportation, INEGI.

Rail Infrastructure

The TMASC Region is serviced by five Class I railroads – Kansas City Southern de Mexico, Ferrocarril Mexicano, BNSF, Kansas City Southern, and Union Pacific. Together, the Class I railroads operate 23,199 kilometers of track.

Another 4,345 kilometers of rail operated by local, switching, and terminal railroads complement the regional rail system. This rail system connects directly to the Mexican ports of Manzanillo and Lazaro Cardenas, which handle most of the country’s automobile trade.

Kansas City Southern is building a line between Monterrey and Nuevo Laredo by installing 43 track kilometers with new 136-pound rail and 75,000 concrete ties; replacing 56,000 ties between Colorado and Lazaro Cardenas to support 136-pound rail; installing more than 312,000 ties and a total of 111 kilometers of both 115 and 136 pound rail on routes.

TMASC Class I Railroad

in KilometersTotal

Class I

Kansas City Southern de

MexicoFerrocarril Mexicano

Kansas City Southern Railway

BNSF Railway

Union Pacific Railroad

Total Railroad (Including

Class I)

Texas 19,483 0 0 1,318 7,968 10,197 23,112

Coahuila 1,230 169 1,061 0 0 0 2,218

Nuevo León 805 544 261 0 0 0 192

San Luis Potosí 998 982 16 0 0 0 1,234

Tamaulipas 684 296 476 0 0 0 937

Source: Association of American Railroads, Secretaría de Comunicaciones y Transportes.

Page 19: Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook

19Bexar County, Texas

Sea Port Infrastructure

The TMASC Region has 19 ports along the Gulf of Mexico. Houston is the largest and Beaumont is the second largest in terms of cargo tonnage. In terms of container traffic, Houston and Altamira are the two largest in the region.

The Port of Houston is the 13th largest port in the world, recording almost 215 million metric tons of cargo in 2011. Its top import containerized trading partners in March 2013 were: Brazil, Belgium, Netherlands, China, Colombia. Houston’s top export containerized trading partners were: China, Germany, Brazil, Italy, and India.

The eighth largest port in the U.S. by total tonnage is the Port of Corpus Christi that offers 125 acres of open storage and fabrication sites, 27,453 square meters of covered dockside storage, and a 14-meter-deep channel. Its top import containerized trading partners in March 2013: Saudi Arabia, Venezuela, Denmark, China, and Brazil. Corpus Christi’s top export containerized trading partners were: Nigeria, Mexico, Morocco, Angola, and Vietnam.

Though the ports of the TMASC Gulf Coast Region already see a considerable amount of traffic, the Panama Canal expansion will likely increase traffic through these Gulf Coast ports. The new parallel canal, that opens in 2015, will accommodate much larger ships that can carry up to 160% more 40-foot containers. Several other market factors will likely push more traffic toward the Gulf ports:

• Increasing regulation, congestion, and costs to operate in California,• Better access to population centers in the US South and Midwest, and • Growth in trade with Brazil and other Latin American countries.

Competitive ManufacturingBolstered by Robust Infrastructure cont’d »

U.S. Waterborne Foreign Trade 2012 by RankSelect U.S. Customs Districts by Volume of Cargo (Metric Tons, 000s)

Exports Imports Total Trade

Rank Tons Rank Tons Rank Tons

Houston-Galveston, TX 2 100,318 1 147,019 2 247,337

Savannah, GA 11 17,724 10 15,194 13 32,919

Port Arthur, TX 12 16,978 5 47,190 6 64,168

Source: U.S. Census Bureau, U.S. Merchandise Trade, Selected Highlights (Report FT 920).

TMASC PortsSource: American Association of Port Authorities, Secretaría de Comunicaciones y Transportes.

Page 20: Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook

20 Bexar County, Texas

Shorter Time to MarketFor Large Consumer Regions »

The region’s proximity to major population centers in North America from Texas consistently ranks as one of the top

reasons for site selection location within TMASC. The 300-, 600-, and 900-mile radii represent markets that can be

reached within a half-day, one day, and one-and-a-half day drive.

Approximately 36 million people in 11 million households live within a half-day drive of central Texas, 62 million

people in 20 million households live within a one-day drive, and 176 million people in 52 households live within a

one-and-a-half drive. This ring analysis also shows that the region’s reach extends to power markets in Mexico like

Monterrey, San Luis Potosi, and Mexico City and in the U.S. like Houston, Atlanta, St. Louis, Denver, Phoenix, and

other mid-Western markets.

RingPopulation(in Millions)

% U.S. & Mexico Population

Households (in Millions)

% U.S. & Mexico Households

300-mi/483-km 36 9% 11 8%

600-mi/966-km 62 15% 20 14%

900-mi/1,448-km 176 42% 52 37%

Page 21: Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook

21Bexar County, Texas

Increase Market ShareAmong the Hispanic Demographic »

Hispanics are key for any automaker’s future success in the U.S. market.

The Hispanic market has unique cultural and economic ties to the TMASC region - once a territory of New Spain.

TMASC is a majority-minority region with large populations of Hispanics who are expected to wield $1.5 trillion in

purchasing power by 2015, according to Nielsen America. The Hispanic market’s astounding growth is fueled by

50,000 Hispanics turning 18 years of age each month for the next two decades.

A presence in the region provides first-hand knowledge into cultural characteristics and consumer behavior, along

with key insights for marketing and advertising efforts that further propel major brand recognition among Hispanics

in North America.

U.S. Hispanic Population

2000 2010Change in Hispanic

Population 2000-2010

Total Population

Total Hispanic Population

Hispanic - Percent of Total

PopulationTotal

PopulationTotal Hispanic

Population

Hispanic - Percent of Total

Population Number Percent

U.S. 281,421,906 35,305,818 13% 308,745,538 50,477,594 16% 15,171,776 43%

TX 20,851,820 6,669,666 32% 25,145,561 9,460,921 38% 2,791,255 42%

AL 4,447,100 75,830 2% 4,779,736 185,602 4% 109,772 145%

GA 8,186,453 435,227 5% 9,687,653 853,689 9% 418,462 96%

MS 2,844,658 39,569 1% 2,967,297 81,481 3% 41,912 106%

TN 5,689,283 123,838 2% 6,346,105 290,059 5% 166,221 134%

Source: U.S. Census Bureau.

Page 22: Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook

22 Bexar County, Texas

By 2016, Hispanics will contribute roughly $14 billion

to the Car and Automobile Manufacturing industry,

representing annualized growth of 7% from 2011.

The Hispanic population increased by 15 million between

2000 and 2010, accounting for over half of the 27 million

increase in the total population of the U.S.

Source: IBISWorld Inc.

Source: U.S. Census Bureau.

Page 23: Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook

23Bexar County, Texas

Texas SUV Registrations vs Select States (2011)

State Total Sport Utilities Registrations Percentage of U.S. Registrations

USA 17,202,408 100.00%

TX 982,043 5.71%

AL 243,332 1.41%

GA 505,413 2.94%

MS 83,299 0.48%

TN 308,143 1.79%

Source: U.S. Department of Transportation Federal Highway Administration Office of Highway Policy Information.*Sport Utilities as defined by the U.S. Department of Transportation

Texas Automotive Market »

It’s no coincidence that GM and Toyota both build SUVs and trucks in Texas - one of the top markets for large vehicles.

In 2011, national comparisons ranked Texas number two for pick-up truck and number three for SUV registrations.

TMASC Large Vehicle Production by Assembly Plant, December and YTD

Brand/Location VehicleDec. 2012

Dec. 2011

Dec. % Change

12 mos. 2012

12 mos. 2011

12 mos. % change

Chrysler Saltillo, Coah., MEX

Ram Hvy-Duty 11,893 7,952 50% 165,802 119,905 38%

Ram Lt-Duty 1,796 2,627 -32% 28,334 21,713 31%

General Motors Arlington, TX, U.S.

Cadillac Escalade 1,058 1,038 2% 16,473 17,085 -4%

Cadillac Escalade ESV 480 489 -2% 9,275 7,769 19%

Chevrolet Suburban 3,348 2,985 12% 59,823 58,185 3%

Chevrolet Tahoe 7,381 4,748 56% 108,307 100,134 8%

GMC Yukon 3,976 2,663 49% 48,435 50,091 -3%

GMC Yukon XL 2,032 1,672 22% 33,445 34,965 -4%

General Motors Ramos Arizpe, Coah., MEX

Cadillac SRX (T) 4,685 5,664 -17% 90,177 85,465 6%

Chevrolet Captiva Sport (T) 2,994 4,051 -26% 57,118 42,798 34%

General Motors San Luis Potosi, SLP. MEX Chevrolet Trax (T) 4,518 0 – 11,378 0 –

Toyota San Antonio, TX, U.S.

Tacoma 6,978 7,237 -4% 109,616 65,122 68%

Tundra 6,423 8,849 -27% 109,582 83,895 31%

Source: AutoNews.

Page 24: Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook

24 Bexar County, Texas

Strategic Workforce Advantages »

With over 12.6 million workers, Texas has the nation’s second largest civilian labor force, providing businesses an extensive pool of candidates from a variety of diverse backgrounds for highly-educated and skilled hires.

In Texas, over 800,000 workers, or about 6% of the civilian labor

force, are employed by the manufacturing sector in a right-to-work

environment. The average weekly wage of Texas workers in the

vehicle and vehicle parts manufacturing sector is 8% to 14% less than

the national average.

Regionally, the population in TMASC is young relative to the rest

of North America and other vehicle producing nations. In 2010, the

median age in Texas was 33.6 years and in Mexico was 26.6. These

median ages were well below those of the U.S., Japan, Canada, and

China. In the U.S. overall, the median age was 37.2 years of age.

Over the next 20 years, Texas’ population is expected to age only

slightly. During that same period, the population of Japan, China,

Brazil, Mexico and India are all expected to age quite rapidly, each

with a gain in median age of over 6 years.

In comparison to other vehicle producing states, Texas and Mexico

had younger populations in 2010 than every other state. By 2030,

the TMASC Region will have a younger population than every other

vehicle producing state except Georgia. South Carolina, Mississippi,

Alabama, New Jersey, Michigan, Ohio, and Kentucky are all expected

to have median ages of 40 or over.

The implications of this are significant. An aging population will

affect the availability of labor (as well as costs associated with

employer-provided healthcare). By comparison, the TMASC Region

provides advantages in both of these areas.

Comparative Median Age

Nation or U.S. State 2010 2030 Change

Japan 44.7 51.4 +6.7

Germany 44.3 48.8 +4.5

MS 36.0 41.1 +5.1

AL 37.9 41.0 +3.1

US 37.2 38.7 +1.5

TN 38.0 38.3 +0.3

Brazil 29.1 37.4 +8.3

Mexico 26.6 36.2 +9.6

GA 35.3 35.6 +0.3

TX 33.6 34.6 +1.0

Source: Population Division of the Department of Economic and Social Affairs of the UN Secretariat, World Population Prospects. The 2010 Revision (Mexico and Canada reflect 2010 and 2030 estimates); U.S. Census American FactFinder; Statistics Canada; CIA World Fact Book.

Page 25: Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook

25Bexar County, Texas

Automotive Manufacturing Employment in Texas2012 Third Quarter

Sector (Industry code) Employees Firms Average Annual Wage

Motor Vehicle Manufacturing (3361) 8,707 26 $68,068

Motor Vehicle Body & Trailer Manufacturing (3362) 7,831 165 $40,820

Motor Vehicle Parts Manufacturing (3363) 17,280 285 $46,176

TOTAL 33,818 476 $50,572

Source: Texas Workforce Commission.

Strategic Workforce Advantages cont’d »

Top Automotive Manufacturing Employers in Texas - 2012

Rank Company Texas Operations Product Employees

1 General MotorsAssembly, Metal Stamping,

IT Innovation CenterFull-sized SUVs 3,500

2 Toyota Assembly Full-size truck and pick-up 2,900

3 Peterbilt Motors Assembly Heavy duty trucks 2,215

4 Continental Automotive Systems Parts Manufacturing Automotive electronics 1,290

5 Caterpillar Engine Assembly Engines, components 1,120

Source: Texas Workforce Commission.

Page 26: Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook

26 Bexar County, Texas

Strategic Workforce Advantages cont’d »

Workforce Program Examples

Houston Community College - Manufacturing Engineering Technology Program

Houston, TX

The Manufacturing Engineering Technology program is designed to develop competent support technicians for employment in the field

of manufacturing engineering and related occupations. The curricula are designed to provide broad-based education with opportunity

for specific employment and personal interest goals.

The shop has more than forty pieces of manual equipment (such as turning and milling machines), computerized numerical controls

(CNC), six robotic arms, a computer integrated manufacturing (CIM) cell, hydraulic and pneumatic trainers, and personal computers with

up-to-date training materials.

South Texas College - Rio South Texas Manufacturing College Alliance

McAllen, TX

South Texas College serves as the lead agency in the Rio South Texas Manufacturing College Alliance and the North American Advanced

Manufacturing Research Education Initiative. It is charged with leading the implementation of a regional skills credentialing customized

training system in the region focused on advanced Manufacturing skills. A few of the programs included in this effort are: tool and die,

industrial maintenance, precision manufacturing, plastics, leadership and supervisory training.

Toyota Advanced Manufacturing Technician (AMT) Program

San Antonio, TX

The Toyota AMT program partners with Alamo Colleges to offer a two-year associates degree whose goal is to produce the world class

technicians to fill the gap in manufacturing. Specific program details include:

• Two-year associates degree

• Real-world experience integrated into AMT program

• Technical workers bypass several years of on-the-job training

• Graduating students ready to fill advanced positions in manufacturing

• Students work at Toyota Motor Manufacturing, Texas, three days a week acquiring experience

• Toyota provides students an average of $30,000 compensation over the two-year program

• One more “additional pathway” for young adults who graduate from high school

Page 27: Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook

27Bexar County, Texas

Diverse Energy Portfolio for Sustainable Manufacturing »

“Industry accounts for 50 percent of all energy used in Texas, compared

to a 32 percent share for the U.S. as a whole. Much of Texas’ energy

consumption, then, fuels industries producing products used across

the U.S. and around the world.” - Susan Combs, Texas Comptroller

Diversifying the energy mix of Texas’ electricity market is a state-

wide priority, helping to lower electricity prices. According to the U.S.

Department of Energy, Texas’ electric power industry generated 48.35

million megawatt hours (MWh), 12 percent of the nation’s capacity from

August 2010 to August 2011. Texas relies on a variety of fuel sources

to meet the growing demand for electricity, including 55 percent from

natural gas, 33 percent from coal, 7 percent from nuclear, 1 percent from

hydroelectric , and 4 percent from other renewables.

Independent Power Grid

Texas is the only state with its own power grid, making it completely

independent from other national networks, where one state’s

decisions may affect electricity markets in all other states. The Texas

grid is not subject to federal regulation over electrical transmission,

which expedites the regulatory process for new energy development.

Companies benefit from Texas’ electricity production that generates

approximately 11 percent of the nation’s capacity.

Renewable Sources for Sustainable Manufacturing

If Texas were a nation, it would rank #6 for installed wind capacity

behind only China, the rest of the U.S., Germany, Spain, and India.

Texas leads the U.S. in installed wind energy capacity (10,394 MW as of

January 2012).

The Lone Star State is home to six of the ten largest wind power projects

in the nation and two of the three largest wind farms in the western

hemisphere, Roscoe Wind Farm and Horse Hollow Wind Farm. By 2014,

Texas will have new transmission capacity to integrate over 18,500 MW

of wind energy onto its grid.

TEXAS NET ENERGY GENERATION IN MILLION MWH

Texas’ industrial and

commercial electric energy

costs an average of 12

percent less (per kWh) than

the rest of the U.S.

U.S. Energy Information Administration

Natural Gas

Coal

Nuclear

Other Renewables

Hydroelectric

*August 2010 - August 2011

15.72

26.57

3.590.462.06

Page 28: Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook

28 Bexar County, Texas

Texas is the only state with its own power grid,

making it free from federal regulation over

electrical transmission and expediting the

regulatory process for new energy development.

Texas municipally-owned utilities are leading

the industry in developing renewable sources by

launching initiatives like CPS Energy’s 400MW

solar project in 2012.

Page 29: Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook

29 Bexar County, Texas

Notes »

Page 30: Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook

30Bexar County, Texas

Notes »

Page 31: Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook

Hon. Kevin Wolff, County Commissioner

County of Bexar, Texas • 101 W. Nueva St., 10th Floor • San Antonio, Texas 78205Office: (210) 335-2613 • www.bexar.orgThis page left intentionally blank.

Page 32: Texas - Mexico Automotive SuperCluster (TMASC) 2013Q2 Factbook

Hon. Kevin Wolff, County Commissioner

County of Bexar, Texas • 101 W. Nueva St., 10th Floor • San Antonio, Texas 78205Office: (210) 335-2613 • www.bexar.org