MCALLEN, Texas - Ralph Garcia, COO of McAllen Economic Development Corporation, has given an in-depth explanation on how his group landed a global leader in automotive technology.
Valeo, a French manufacturing firm, is to build a state-of-the-art facility within the McAllen Nearshoring Industrial Park on Ware Road in south McAllen. The company is investing $225 million over the next five years for a 337,000 square-foot facility that will create up to 500 new jobs in the region. Production is expected to begin in 2027.
Garcia spoke about the project at a Council for South Texas Economic Progress event held at the Home2 Suites Hotel in McAllen. The audience comprised a delegation of leaders with the National Agency of Automotive Sector Suppliers (ANAPSA) in Mexico. ANAPSA is a tri-national organization based in Mexico City.
Garcia was one of three economic development officials from Hidalgo County on a panel moderated by COSTEP economic development director Rick Carrera. The other two were Jeffrey Salcedo Cantú, of Edinburg Economic Development Corporation, and Steve Valdez, of the Economic Development Corporation of Weslaco.
Garcia said the Valeo project all started with an innocuous business retention and expansion visit to Valeo’s Rio Bravo plant by McAllen EDC’s point person in Mexico, Angel Ortiz.
“One of the things we do as an economic development office is what we call Business Retention & Expansion. We don't just bring the industry here. We continuously visit to see what's going on with the operation, what kind of growth opportunities exist, supply chain needs, labor challenges, whatever the case. And that's in Reynosa or Rio Bravo,” Garcia explained.
“During one of those visits, one of our team members learned of a project where the company, Valeo, was looking at Querétaro for an expansion project in Mexico, or maybe in Reynosa. And so for us, the initial thought was, well, we don't want it to go to Querétaro. We want to keep it here. We tried everything possible to keep that investment in Reynosa. And so we worked with the state government to get incentives available to the table to make sure that we had the real estate portion ready, the resources for electricity and then labor.
“But as time progressed the project kind of fizzled a little bit. So we revisited it again in November of 2024 and then come December of 2024 we learned that the project was now stateside. A lot of it had to do with USMCA and the tariffs that are being imposed by by the Trump administration. A lot of companies start getting nervous. They start pivoting and trying to figure out, where do I need to be? How do I do this? And so we learned of the project in December (2024).
“Fast forward to this year and they're breaking ground on a 337,000 square foot facility.”
Garcia said McAllen EDC will be ready to assist Valeo throughout the process.
“It's a very automated process, but they're still going to hire up to about 500 employees in that operation. And we will assist them from the very beginning, through the whole process. Once they're established and they start hiring, we will assist them with the recruitment process, training programs, whether it's through the college or the university. Even relocation of the families that are going to be moving to the area. We assist them with helping them find schools, homes, everything, and that's at no cost to them. We don't have a special interest. We don't get commissions for what we do.”
Garcia said MEDC’s main goal is to create good-paying jobs in the community.
“The jobs that in this case Valeo are going to be creating are high-paying salary jobs. A lot of them are automated. They're going to be working with PLC programming setups for the equipment. It's a very automated, clean room, type process. The company manufactures sensors in Rio Bravo, a lot of the sensors, cameras, and modules that go in automotive, primarily for GM or Stellantis,” Garcia said.
"And here, what they're going to be building is a product that is basically the architecture of the vehicle. The brain division is what's coming here, and so that equipment controls and updates modules within the vehicle. It's not the first of its type, but the product that they're bringing is so innovative that it actually uses a radiator coolant to cool the computer system internally, which is something I had never heard of. But very unique. And we're excited that it's going to be built here in McAllen, Texas.
“It benefits our region, all our communities. The employees are going to come from that base. But again, it's all about having that relationship going in and understanding what the need is and how to make it fit in the environment that we have here. Not every company is going to be a fit for the US. Without a doubt, Mexico will still continue to be kept competitive, even if you have duties and tariffs that are being applied.”
Garcia said McAllen was in competition with other cities in the Rio Grande Valley for the Valeo project, plus Detroit and Louisville, Kentucky.
“We were very fortunate that the (city) commission and the city was working very aggressively. And although Vallejo made their announcement the day before yesterday, the construction actually started at the end of February. They signed the lease at the end of February, and the earth work was already being done at the site,” he said.
Garcia said the permitting process is very quick.
“They (Valeo) have got a time frame to be in the building before around November of this year. So we expect that the company will be moving in equipment and getting the process started. They start hiring around December, and by March of 2027, they should be pushing product out the door. That's the timeline that they have. And we don't see any issues there.”
Garcia added: “Everybody's competing. They (other cities) will come back with their price quote. In the case of Valeo, we took them to three different (development) groups in McAllen. We know they visited other groups here in the Valley as well. And out of all of those, they ended up coming back to one with us, one in another city, neighboring, and then, of course, they were looking at other two other communities, one was in Detroit, and one was in Louisville, Kentucky. And then, at the end of the day, they were able to get apples to apples quotes, and made a decision based on that from the cost standpoint. They are going to receive incentives on job creation and then some property tax credits.”
