REYNOSA, Tamaulipas - There was a seven percent increase in investment and 6,000 additional jobs added by maquila firms in Reynosa in 2015 and the prospects for 2016 are just as good.
This is the view of Alejandro ‘Alex’ Avila, president of INDEX Reynosa, a trade association for the maquiladora industry.
“We went from 94,000 to 101,000 employees, with 2,000 job openings remaining unfilled in 2015. It was great news. We also saw a seven percent increase in investment. 2016 is looking good, to have that sort of increase again. We are seeing a lot of expansions going on,” Avila said.
Alex AvilaAvila made his comments in interviews with reporters at a news conference held by INDEX Reynosa at the Holiday Inn Express in downtown Reynosa last Friday. INDEX Reynosa holds a news conference at the start of each year to look ahead to the upcoming year and to thank local reporters for their coverage of the industry.
“With salary increases in China and the Asian Pacific, which is happening, it boosts our situation at home. It makes us more competitive,” Avila told the Rio Grande Guardian. “We have four or five expansions planned for 2016 in Reynosa. We are also seeing more maquilas being built in central Mexico. In Guanajuato, for example. A lot of car plants that will bring more factories to the border, second and third tier suppliers.”
INDEX Reynosa gave a handout to reporters about employment trends among INDEX member maquilas. During the worst part of the 2008-2010 recession, employment in Reynosa-based maquilas dropped to 70,000, the handout states. In Matamoros it dropped to 40,000. Now, maquila employment in Matamoros is at about 55,000. In Nuevo Laredo, maquila employment dropped to below 18,000 during the 2008-2010 recession. Now it is up to nearly 29,000. For other municipalities along the Tamaulipas border, maquila employment dipped to below 15,000 during the recession and is now at 21,000, the handout states.
The same handout shows that INDEX has 146 member companies in Reynosa, 110 in Matamoros, 61 in Nuevo Laredo and 30 in other municipalities along the Tamaulipas border.
Avila predicted the new Kia Motors auto plant being built just outside of Monterrey will have a big impact on Reynosa. “Thousands of new jobs will be created here. With the new Kia plant and what is happening in Guanajuato, with the new Hyundai and Mercedes Benz plants, we expect to see second and third tier suppliers coming into the border region. There are a lot of auto parts manufacturers here already. They will simply be increasing their operations,” Avila predicted.
Asked how many direct jobs the maquilas in Reynosa will be responsible for 2016, Avila said: “I am hoping we can get up to 106,000 or 107,000. We are definitely rebounding from the recession. I hope nothing untoward happens in the global economy to jeopardize this. We buy everything in dollars so a weaker peso, which is what we have got right now, helps us.”
An announcement was made at the news conference that INDEX Reynosa is working on launching a new website, to better inform members and the wider public of the positive things member firms are doing in Reynosa.
“One of our central strategies is to improve communications. We are going to have a new website in order to be more socially minded with the community,” Avila said. “We already help a lot with the security of Reynosa. Now, we are donating $2 million to a local hospital and another $10,000 to another hospital. There are a lot of good things we do that people do not know about, it is not just about bringing jobs to the region.”
The McAllen Economic Development Corporation was represented at the INDEX Reynosa news conference by its president, Keith Patridge, and its vice president for Mexico business recruitment, Ralph Garcia.
“The interest level among companies is definitely picking up. I am very optimistic about the year ahead,” Patridge told the Rio Grande Guardian. “We are seeing several more companies that are showing interest in not only coming into Mexico but in moving their projects forward. We hope to have some announcements in the next couple of weeks (about new investment in Reynosa).”
Patridge pointed to analysis by Roberto Coronado, an El Paso-based economist with the Federal Reserve Bank of Dallas, which shows that a ten percent increase in maquiladora output leads to a 6.6 percent increase in total employment in McAllen.
“We have sustained ourselves over the last several years and now we are starting to grow again. I am optimistic about the year ahead,” Patridge said. “We still don't know globally, with the global economy there is a lot of uncertainty out there but the one thing we do know is that when the peso falls in value against the dollar it makes Mexico much more attractive a place to invest.”
Patridge pointed out that when the value of the peso falls against the dollar, which it has done, Mexican shoppers visiting McAllen and other cities in the Rio Grande Valley can buy less, which affects retailers. However, he said from a manufacturing standpoint a weaker peso results in a lot more companies being interested in locating in Reynosa.
The INDEX Reynosa logo.“In the past it has offset one another. When we bring new companies in they are generally moving new managers in and they are moving people in that are generally high-end people, and they are also tending to buy houses which then allows for that end of the economy to pick up on the U.S. side. The last few years, unfortunately, because of the violence issue, we have not seen that happen. Now, with the violence beginning to settle down, we are not seeing that as a major issue. Hopefully we will go back into the old way of, if the peso declines the maquilas pick up.”
The one big issue the Valley and the Tamaulipas cities situated along the Rio Grande/Rio Bravo have to contend with, Patridge said, is negative publicity in the media about the region being insecure and a dangerous place to live and work.
“We still have an image issue but we are working on that. We have to address the image issue. Is there a potential for danger? Sure, but there is potential for danger anywhere. If you look around Reynosa you see people are living their lives as they always have, business goes on. We want to see the relationships pick up again. Many people have not visited Reynosa for a long time, maybe ten years. We want them to see across the river, to see the south side of town.”
Also at the news conference, INDEX Reynosa unveiled its board of directors for 2016. Avila continues as its president, Martha Ramos continues as director general and Mike Myers remains 1st vice president. Darrel Renfrow as 2nd vice president and Carlos Valdez as 3rd vice president.
Other board members include Raul Setien, who chairs INDEX Reynosa’s finance committee, Jonas Wejckin, who chairs its import-export committee, Oscar Dueñas, who chairs the systems committee, Enrique Castro, who handles government relations, Carlos Vera, who chairs the industrial relations committee, and Esmeralda Berlanga, an advisor.
Two new committees have been formed by INDEX Reynosa. Victor Cruz chairs the excellence in operations committee and Dan McGrew chairs the committee overseeing provider development. Both are on the group’s board of directors.
