TMASC Executive Summary Jan. 2010

The Texas-Mexico Automotive SuperCluster (TMASC)Bexar County Economic Development, Strategic Initiatives Division

January 2010

Copyright ©2010 Bexar County

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TMASC Update

Section I: Recognizing Opportunity

Section II: Building Upon Regional Assets and Resilience

Section III: Attracting New Investment and Growth

Section IV: Positioning the Region for Future Trends

Section V: TMASC efforts & next steps

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A Courtship of Over Two Decades...Toyota Motor Manufacturing, Texas (TMMTX)

“If we could attract the crown jewel of manufacturing, an automobile manufacturing plant, we would dramatically change our local economy.”

Judge Nelson W. Wolff

The Cluster EffectSuppliers to the 2007 Toyota Tundra

Source: Automotive News, July 23, 2007

Changing Geography of Assembly

* Radius centered on 430 mile main transportation corridor from Laredo to Arlington.

SOURCE: ELM Guide, TIP Strategies, Inc., research

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Global Manufacturers

NOTE: Shaded region represents the NAFTA Highway.

SOURCE: ELM Guide, TIP Strategies, Inc. research

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Global Vehicle Assembly Plants

• General Motors

• Chrysler

• Navistar - International

• BAE Systems

• PACCAR - Peterbilt

• Caterpillar

• Marcopolo

• Toyota

• Daimler - Freightliner

9 Global Vehicle ManufacturersAlmost 900,000 Units Annually

18,000 OEM Workers

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Tier 1 Automotive Suppliers

Over 200 Tier 1 supplier plantsOver 133,000 workers

Approx. 37 million square feet of facilities74 Tier 1 suppliers (37%) employ 500 or more workers

Sourcing by GeographyPredominantly Texas

Predominantly Texas & Northeastern Mexico

Predominantly Northeastern Mexico

SOURCE: ELM Guide, TIP Strategies, Inc., research

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SVehicles Manufactured in the TMASC Region

Industrial, Military, and Recreational Vehicles

Cars, SUVs, and Trucks

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SRegional EmploymentAssembly Plants and Suppliers

Legend

Number of Employees

Suppliers

Assembly Plants

* Radius centered on 430 mile main transportation corridor from Laredo to Arlington.

SOURCE: ELM Guide, TIP Strategies, Inc., research

• Approximately 151,000 employees

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TMASC Update

Section I: Recognizing Opportunity

Section II: Building Upon Regional Assets and Resilience

Section III: Attracting New Investment and Growth

Section IV: Positioning the Region for Future Trends

Section V: TMASC efforts & next steps

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The Historically Integrated NAFTA EconomyVolume of Trucks per Day To/From Mexico, 1998

Source: U.S. Department of Transportation, 1998

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The Historically Integrated NAFTA EconomyNorthbound Daily Truck Crossings, Laredo 1995-2009

0

1250

2500

3750

5000

1995 1997 1999 2001 2003 2005 2007 2009 (October)

2,047

2,791

3,4283,705

4,073 4,1023,846 3,950

3,710 3,8243,988

4,162 4,294 4,302

3,789

Trucks per Day

Source: U.S. Customs and Border Protection, 2009

Truck crossings in Laredo = 48% of TX Total

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SInfrastructureSeaports

•Manzanillo: 1/3 of Mexico Container Traffic

•Lázaro Cárdenas: Alternative to CA for Pacific Freight

Port of Lázaro Cárdenas

Port ofManzanillo

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SInfrastructureRailroad

•3 Class I Railroads Serve Texas

•12,000+ Miles of Track in Texas

•Class I Track in Northeastern Mexico: Kansas City Southern Mexico and Ferromex

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SInfrastructureMultimodal Ports, Foreign Trade Zones

ZONA DE CONECTIVIDAD

GOMEZ PALACIO

Foreign Trade Zones

•31 Foreign Trade Zones in Texas

•8 multimodal (rail, truck, and air cargo) ports in the TMASC region

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Research & Development Assets

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A Pro-Business Environment

States with “Right to Work” Laws

Source: National Right to Work Legal Defense Foundation, 2009

TX AL GA IN KY MI MS MO NJ NC OH OK SC TN VA

Helpers--production workers $9.78 90% 95% 86% 84% 81% 89% 89% 90% 89% 84% 94% 90% 89% 93%

Laborers and freight, stock, and material movers $10.56 102% 93% 89% 96% 80% 103% 85% 86% 95% 87% 101% 96% 96% 90%

Team assemblers $11.26 72% 91% 74% 80% 82% 95% 88% 90% 89% 82% 94% 77% 76% 90%

Production workers $12.12 91% 95% 61% 96% 69% 109% 86% 79% 85% 77% 118% 99% 101% 89%

Cutting, punching, and press machine setters, operators, and tenders $12.41 96% 95% 84% 94% 76% 98% 85% 90% 99% 86% 97% 91% 91% 90%

Industrial truck and tractor operators $12.57 93% 94% 82% 93% 71% 100% 91% 80% 94% 85% 96% 91% 92% 91%

Assemblers and fabricators $12.84 105% 83% 73% 77% 56% n/a 61% 87% 79% 69% 115% 106% 96% 85%

Structural metal fabricators and fitters $14.28 90% 100% 82% 96% 84% 84% 87% 80% 87% 86% 98% 85% 88% 94%

Inspectors, testers, sorters, samplers, and weighers $15.48 112% 108% 96% 101% 87% 113% 90% 93% 108% 93% 88% 103% 103% 93%

Computer-controlled machine tool operators $15.54 113% 97% 98% 99% 91% 113% 106% 81% 98% 94% 102% 95% 100% 97%

Machinists $16.43 95% 103% 89% 98% 86% 96% 96% 79% 98% 95% 101% 102% 82% 91%

Welders, cutters, solderers, and brazers $17.04 110% 112% 103% 110% 93% 106% 107% 93% 104% 103% 111% 105% 109% 96%

Painters, transportation equipment $17.12 102% 93% 95% 80% 77% 102% 82% 89% 91% 91% 112% 96% 73% 76%

Electricians $19.24 102% 97% 76% 92% 70% 98% 75% 64% 107% 83% 104% 108% 96% 92%

Tool and die makers $20.46 94% 99% 86% 97% 77% 90% 87% 88% 104% 88% 103% 99% 97% 97%

First-line supervisors/managers of production workers $25.6 106% 108% 100% 108% 90% 116% 105% 90% 107% 102% 108% 100% 113% 99%

Sales Representatives, Wholesale $28.18 114% 98% 101% 103% 95% 111% 102% 83% 111% 95% 118% 106% 102% 87%

Industrial Engineers $38.69 109% 110% 116% 119% 101% 119% 113% 99% 114% 112% 116% 112% 117% 101%

Mechanical Engineers $41.38 111% 117% 125% 126% 109% 133% 118% 102% 123% 127% 121% 115% 119% 97%

Affordable Wages for Automotive Manufacturing

Source: Bureau of Labor Statistics Occupational Employment and Wage Estimates, 2009Texas Avg. Hourly Wage as % of State’s Avg. Hourly Wage

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SGrowth Outpacing Other OEM StatesNet Change in Population by State, 2000-2009

-100,000

0

100,000

200,000

300,000

400,000

500,000

600,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Source: U.S. Census Bureau Population Estimates, 2009Note: Each state included in this graphic hosts two or more OEM plants, with the exception of Mississippi (one plant)

Texas led US in net population increase for 2009

Texas AL GA IN MI MS MONJ NC OH OK SC TN VA

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May 2009

September 2009

Strength Amid RecessionUnemployment

Source: Bureau of Labor Statistics; NYTimes.com; FlowingData.com

September 2009

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SStrength Amid RecessionResilient Metro Areas

Source: Brookings Institution MetroMonitor, December 2009

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Strength Amid RecessionPerformance

1 Austin-Round Rock TX2 Killeen-Temple-Fort Hood TX3 Salt Lake City UT4 McAllen-Edinburg-Mission TX5 Houston-Sugar Land-Baytown TX6 Durham NC7 Olympia WA8 Huntsville AL9 Lafayette LA

10 Raleigh-Cary NC11 San Antonio TX12 Fort Worth-Arlington TX13 Dallas-Plano-Irving TX14 El Paso TX15 Wichita KS16 Corpus Christi TX17 Seattle-Bellevue-Everett WA18 Baton Rouge LA19 Tulsa OK20 Greeley CO

Source: Milken Institute, November 2009

• Milken Institute Best Performing Cities Index 2009• Job Creation

• Job Stability

• Wage Growth

• Technological Innovation

• 9 out top 20 cities in Texas

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TMASC Update

Section I: Recognizing Opportunity

Section II: Building Upon Regional Assets and Resilience

Section III: Attracting New Investment and Growth

Section IV: Positioning the Region for Future Trends

Section V: TMASC efforts & next steps

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SCorporate Investment in the RegionSelect Texas Projects 2009

Corporation LocationCapital

InvestmentJobs

Created

Toyota Assembly Plant Expansion San Antonio $100 Million 850

Caterpillar Inc. Manufacturing Facility Seguin $170 Million 1,400

Medtronic Diabetes Care Center San Antonio $23 Million 1,400

Tianjin Pipe Company Manufacturing Facility Corpus Christi $1 Billion 300-600

Union Pacific Intermodal Facility San Antonio $120 Million 75

Albany Composites Manufacturing Facility Boerne $42 Million 337

L-3 Communications Aircraft Repair Facility Waco $10 Million 100

Caterpillar Inc. Manufacturing Facility Waco $30 Million 60

Grifols, Inc. Manufacturing Facility San Marcos $76 Million 190

Kalmar RT Center Manufacturing Facility Cibolo $18 Million 200

Source: Texas Comptroller, 2009

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Corporation Location Capital Investment

Jobs Created

Hitachi Chemical Manufacturing Facility Nuevo León US $155 Million

Sanyo Solar Panel Manufacturing Facility Nuevo León US $15 Million 600

Golden Dragon Pipe Manufacturing Facility Coahuila US $100 Million 550

Speco Aeolian Tower Manufacturing Facility Coahuila US $30 Million

Hilti Tool Manufacturing Facility Tamaulipas US $40 Million 250

Whirlpool Manufacturing Facility Nuevo León US $55 Million 1,100

Johnson Controls Manufacturing Facility Nuevo León US $105 Million 250

Luvata Pipe Manufacturing Facility Nuevo León US $40 Million

LG Electronics Manufacturing Facility Tamaulipas US $100 Million 200

Source: MPBulletins.com, 2009

Corporate Investment in the RegionSelect Northeastern Mexico Projects 2009

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Continued Automotive InvestmentToyota Moves Future Tacoma Production to San Antonio

• Preserves and stabilizes existing regional suppliers

• New direct investment - $100 million

• New direct jobs created - 850

• Job multiplier - 1:5 (including suppliers)

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Continued Automotive InvestmentChrysler to Produce Fiat 500 Subcompact in Mexico

• Chrysler likely to expand Toluca plant for production of 100,000 units

• Target market: new-car shopper, 20-35 age bracket

• W. Hemisphere market access: plans to sell 75% in NAFTA, 25% in S. America

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Continued Automotive InvestmentFord to Produce Fiesta Hatchback in Cuautitlán

• Ford re-tooling Cuautitlán assembly plant formerly producing F-Series pickups

• Production to begin in early 2010

• $3 billion investment by Ford and suppliers

• 4,500 Ford jobs

• Guanajuato transmission plant, expansion of engine plant in Chihuahua planned

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TMASC Update

Section I: Recognizing Opportunity

Section II: Building Upon Regional Assets and Resilience

Section III: Attracting New Investment and Growth

Section IV: Positioning the Region for Future Trends

Section V: TMASC efforts & next steps

HispanicBlackAsianWhiteOther

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Access to Growing Market SegmentsA Large and Brand-Agnostic Hispanic Market

Source: U.S. Census Bureau, 2008 Estimates

\

1%

47%

4%

12%

37%

Texas Population

Change in Hispanic Market Share 2007-2008

Source: R.L. Polk & Co., 2009

-1.5%

-0.75%

0%

0.75%

1.5%

2.25%

3%

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0

5

10

15

20

25

30

19981999

20002001

20022003

20042005

20062007

2008

2009 (Oct. Y

TD)

Mar

ket

Sha

re (%

)

Source: Asociación Mexicana de Distribuidores de Automotores, 2009

Access to Growing Market SegmentsAutomaker Success in Mexico

Brand Market Share in U.S. and Mexico, 1998-2009

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SAccess to Growing Market SegmentsGen Y Enters US Driving Age Population (16-85)

Source: IHS Global Insight, 2009

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SAccess to Tomorrow’s Customer and Workforce Young Population Relative to Other North American OEM Sites

Median Age July 2008Median Age July 2008

Canada 39.9

NJ 38.7

OH 38.1

MI 38.0

KY 37.7

TN 37.7

SC 37.6

MO 37.5

AL 37.5

VA 37.1

NC 36.9

U.S.A. 36.8

IN 36.7

OK 36.1

IL 36.0

MS 35.3

GA 34.9

TX 33.2

Mexico 27.6

Median Age 2030Median Age 2030

Canada 43.7

SC 41.3

MS 41.1

AL 41.0

NJ 40.8

OH 40.2

MI 40.2

KY 40.0

MO 39.6

U.S.A. 38.7

TN 38.3

OK 37.9

VA 37.8

IL 37.8

IN 37.7

NC 36.8

Mexico 36.2

GA 35.6

TX 34.6

Source: Population Division of the Department of Economic and Social Affairs of the UN Secretariat, World Population Prospects: The 2008 Revision, (Mexico and Canada figures reflect 2010 and 2030 estimates)

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SCapacity to Lead the Industry Through InnovationManufacturing Tomorrow’s Vehicles, for Tomorrow’s Consumer

Diverse Vehicle Offerings: Trucks, SUVs, Sedans, Hatchbacks, Subcompacts

Regional Expertise in R&D:Consumer Electronics, Vehicle Safety, Telematics, Engine Efficiency, Manufacturing Processes, Alternative Fuel Technologies

Proximity to Customers and Innovators:Growing Population, Gen Y Engineering and Design Talent

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SAttractive Climate for Foreign InvestmentAsian Interest

• Exponential growth of automotive sector in China and India

• Chinese and Indian OEMs in the US market a reality

• Potential FDI for TMASC

• Automotive News Oct 2009 “Chinese seen as buyers of U.S. suppliers”

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Ideal Launch Pad for the “New Domestics”Projected North American Output

Source: CSM Worldwide, 2009Note: “Asian 4” refers to Toyota, Honda, Nissan, and Hyundai-Kia; “German 3” refers to Daimler AG, Volkswagon Group, and BMW.

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TMASC Update

Section I: Recognizing Opportunity

Section II: Building Upon Regional Assets and Resilience

Section III: Attracting New Investment and Growth

Section IV: Positioning the Region for Future Trends

Section V: TMASC efforts & next steps

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Preserve & grow existing industry

Recruit ForeignDirect Investment

Spur innovation in new technology

Develop a next-generation workforce

ww

w.txm

xautomotive.com

twitter.com

/tmasc

LinkedIn TMA

SC

Group

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Strategic Relationships

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Visit www.txmxautomotive.com for more information

Jen T. MartinezStrategic Initiatives Manager

Bexar County Economic Development

(210) [email protected]

www.linkedin.com/in/jenmartinez

David MarquezExecutive Director

Bexar County Economic Development

(210) [email protected]

www.linkedin.com/in/marquezdavid

Special thanks to T.I.P. Strategies and the City of San Antonio