The Brownsville Borderplex, a key link in the realigned North American “Auto Alley”

Brownsville (June 2, 2015) — Texas is home to a well-established automotive manufacturing sector that has seen continued growth in the last five years thanks to the realignment of the North American “auto alley” and the resurgence of Mexico as a top manufacturer of automobiles.

The traditional U.S. automotive corridor that once concentrated heavily on Detroit and nearby locations has rapidly shifted toward the Midwest and Southern parts of the country, facilitating the Lone Star State and the Brownsville-Matamoros Borderplex in playing a key role in the supply-chain-logistics of the automotive industrial corridor in North America.

The Borderplex is home to Tier 1, OEMs and leading global suppliers as well as warehousing and distributing facilities for the industry. A total of 50 companies form the automotive cluster in Matamoros, and that number nearly doubles when we add the existing companies operating out of Brownsville.

The Borderplex’ proximity to Mexico has made the region an ideal candidate for companies seeking to supply the automotive market in Mexico, or to establish automotive manufacturing operations as stand-alone entities.

And since the passage of the North American Free Trade Agreement (NAFTA) in 1992, Texas has served as a strong trade partner and primary link between Mexico’s automotive plants and the rest of the U.S. automotive industry with billions of dollars in automotive goods being shipped annually to the U.S. by way of the Texan border.

According to Scotiabank’s Global Auto Report from March 2014, a vehicle made in the U.S. contains on average more than $4,000 worth of Mexican-made parts.

A target industry

Traditionally, the Borderplex has been a magnet for companies that manufacture automotive components.

Companies have established their operations here to take advantage of the region’s competitiveness in logistics and abundant young workforce available with basic and advanced skill sets required for the industry.

For decades, automotive manufacturing has been one of Brownsville’s top target industries and an important component of the region’s maquiladora sector found in Matamoros.

“The auto parts sector encompasses 35% of all the maquiladora industry in Matamoros. Practically all the parts that create a dashboard in a vehicle are manufactured in Matamoros,” said Roberto Mattus Rivera, Executive Director for the Matamoros Maquiladoras Association (AMMAC), giving the reason why this community earns the title of “Dashboard City”.

And after the most recent economic downturn, when the automotive industry in the country needed to be reshaped, the Brownsville-Matamoros region saw an increased presence in the manufacturing of components of emerging automotive techonologies.

Toyoda Gosei is one of the newest additions to the area’s automotive cluster. In 2014, the Japanese company invested $8.5 million to establish their Matamoros plant in order to strengthen its automotive rubber hose production in the U.S. Toyoda Gosei manufactures hoses for Toyota’s full-size pickup truck assembled at its San Antonio plant.

The Borderplex competitiveness and business opportunities have helped companies in this sector thrive throughout the years.

Such is the case of Trico Pruducts Corporation and Delphi Automotive PLC, who for decades have been servicing their clients from the Brownsville-Matamoros area.

Trico has called the Borderplex home since 1986. The company is a global OEM and aftermarket supplier of windshield wiper systems, assemblies, and components for the auto industry. It is also one of the top motor vehicle parts manufacturing companies in Texas with 420 employees.

Trico has 8 facilities throughout North America, South American, Europe, Asia, and Australia, with two of them located in the Borderplex. The Brownsville facility is their North American manufacturing headquarters that serves both the OE and aftermarket sectors. It is also the company’s warehouse and distribution center for American, Canadian, and Mexican OE customers. The Matamoros facility is the largest windshield wiper systems and wiper blade manufacturing facility in North America. The Matamoros plant, assembles, packages, and paints for North American OE and aftermarket customers.

Delphi has also been manufacturing and assembling automobile components from Matamoros since the 1980’s. The company is a Tier 1 supplier of technologies for the automotive and commercial vehicle markets and operates several plants in the region.

Delphi, which was formerly GM’s parts division, is one of several parts manufacturers that have shifted a significant portion of their North American production to Mexico from the U.S.

Enhancing logistics

A new trend has suppliers moving closer to their clients in an effort to boost and economize their services, making the Borderplex a prime destination for these companies since it is considered a link between the industry in Mexico and the U.S.

One such case in the Borderplex is that of Paragon D&E, whose customer base in Brownsville includes heavy truck supplier CK Technologies LLC, a division of Cascade Engineering Inc., as well as other automotive suppliers nearby.

Paragon, a company based out of Grand Rapids, Mich., recently acquired Brownsville Rio Grande Tools Company and plans to service all its industry lines, which include the automotive and heavy truck industries, from its Brownsville facility. The company designs, engineers and manufactures highly complex tooling systems for its customers.

With information from www.areadevelopment.com and the Office of the Governor Economic Development and Tourism Division

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