Thursday, May 21, 2009

An Auto Assembly Plant in Juarez? How Do We Get There?

In New Mexico instead of thinking about our role in the global economy we are currently bogged down what seems to be a revival of cronyism and systemic corruption in state government, diminishing public confidence in our institutions. At the tail end of a swine flu outbreak, in the middle of a major recession, with two-hour wait times on the bridges, and with the city occupied by 8000 troops to combat the spike in violence, it is a sign of an indomitable spirit to see that business leaders in Juarez are still thinking strategically, ambitiously, and with an eye on collaboration with El Paso for future economic growth. Norte is my source for this story.

At a presentation yesterday of a proposed "Accord for Society and Prosperity" between the non-profit Desarrollo Economico de Juarez and the City of El Paso, the president of the Juarez Association of Maquiladoras, Soledad Maynez Bribiesca outlined steps Cd. Juarez will have to take before the city can attract a plant to build finished automobiles.

"An auto assembly plant would create 35,000 jobs, and it doesn't make sense for us not to have an assembly plant since we are already making 80% of an automobile in component parts manufactured here in Juarez," she indicated. But she outlined four steps Juarez must take before the city might attract an automobile manufacturer.

First, the city must improve its police forces and overall security conditions. Second, a manufacturer will have to know they can export finished automobiles without impediment to other countries. Third, government regulations will have to be drawn up to speed up the installation and operation of a plant. And fourth, the railroad network in the borderlands will have to be improved.

Out of the four conditions Ms. Maynez mentioned, the one most likely to reach rapid fruition is the one that seemed to be the most difficult to achieve five years ago, the improvement of the railroad infrastructure. See my interview of Jerry Pacheco for a summary of what is happening on that front

She indicated her organization has not yet begun a project to attract an assembly plant, and believes this would be much easier to accomplish as a joint effort with the city El Paso.

Robert Andrade, an assistant to Mayor John Cook of El Paso, spoke at the meeting, saying that the time has passed when El Paso and Juarez see themselves as distinct cities from two different countries. "Juarez is important to us, not only for trade, but also because together we can create a business complex, similar to the Detroit-Canada region, where industrial production and commerce are intertwined." The goal of the accord is to provide value-added for regional production and to reactivate economic activity, he added.

The president-elect of Desarrllo Económico de Juárez, Jorge Contreras Fornelli, said the economic and security crisis "requires us to...compete at the global level as a single Juárez-El Paso-Las Cruces region. México is more competitive than China in costs, and we need to take advantage of the fact that Juárez is one of the cities most capable of competing in manufacturing, due to the price of skilled labor."

An auto assembly plant in Juarez would create a huge potential for suppliers on the U.S. side at Santa Teresa, Sunland Park, as well as El Paso.

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