Tesla in Mexico: the return of factories near the United States boosts the border

Governor Samuel Garcia is a young man in a hurry, between the birth of his daughter and the arrival of Tesla at his home in Monterrey, in northern Mexico, boosted by these factories which now prefer America to Asia.

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The first electric vehicles could come out of the Mexican “gigamanufacture” as early as “next January”, the governor of Nuevo Leon told AFP on the basis of his contacts with Tesla, a few hours before heading to the maternity ward.

An uninhibited communicator, Mr Garcia, 35, shared the video of the birth on Instagram with his wife, as he had of course posted the photo of his meeting with Tesla CEO Elon Musk at the company’s headquarters in Austin. (Texas) early March.

Ten days after the announcement of an investment of five billion dollars, Tesla is already in the process of completing the purchase of land outside Monterrey.

“I think it’s a huge piece of land where they’re going to build the biggest factory in the world. As far as I know, it’s more than 1,600 hectares, ”explains Mr. Garcia.


Tesla in Mexico: the return of factories near the United States boosts the border

The youthful-looking governor is betting on 7,000 direct jobs in Monterrey, an industrial city (Whirlpool, Kia, etc.) 215 km from the border with Texas and 600 km from Austin.

It also relies on indirect jobs by the tens of thousands. “About 30 Tesla suppliers came through here from November to February.”

Arriving in December 2021, Taiwanese computer maker Quanta, which makes the “brains” of cars, has already recruited 2,500 people, according to an executive.

“A madness”, adds this executive who is delighted to soon have his client on site rather than in Austin.

The French Saint-Gobain (windshields) also has a factory in the region, as will very soon Faurecia (automotive seats). France inaugurated a Consulate General in Monterrey in 2021.

Civil society tempers the euphoria that is winning over the elites of Nuevo Leon, an industrial state of 5.7 million inhabitants hit by a severe drought last year. Smogs of pollution regularly veil the mountains around Monterrey.

“The State will have to be able to respond in record time” to the “demand for housing, water, mobility, health, school”, worries the director general of the association Consejo civico (council civic), Sandrine Molinard.

Boosted “Maquiladoras”

The “Tesla effect” and the new global order are felt hundreds of kilometers north of Monterrey, along the border, as in Ciudad Juarez.

Ciudad Juarez is the cradle of the “maquiladoras”, these foreign factories which employ cheap Mexican labor to manufacture products re-exported to the United States (electronic or aerospace components, medical equipment, automobile parts, etc.)

The United States-China trade war, the Covid and the paralysis of exchanges, the relocation of production lines to America, Joe Biden’s plans to support the economy have given a second life to some 300 factories in Juarez, according to figures from local players.

“It’s a boom,” sums up the director general of municipal economic development, Ivan Perez, who is worried about a labor shortage. “We need 30,000 employees”.


Tesla in Mexico: the return of factories near the United States boosts the border

New warehouses are springing up in the “industrial parks” built along the fences that protect El Paso, the American twin city, so near and so far for Venezuelan migrants stranded in Juarez.

Four companies in Taiwan — including Apple contractor Foxconn and Tesla supplier Pegatron — “are building 70,000 m2” of new facilities, says architect and industrial hangar developer Jorgez Bermudez, son of one of the pioneers of “maquiladoras” in the 1960s.

“In 20 years, I had never seen that the availability is below 5% of the available area,” confirms Eduardo Cinco Cetina, of the Citius business real estate company.

This new “boom”, called “nearshoring” in Mexico, follows a simple principle: multinationals and their suppliers set up production lines near their main client, the North American market.

This “fashion” of “nearshoring” will not benefit Mexican industrial development, regrets Jesus Manuel “Thor” Salayandia Lara, outgoing president of the local branch of the National Chamber of the Processing Industry (Cancintra).

“In 60 years of industry + maquiladoras + in Juarez and throughout the north of the country, there has never been a real transfer of technologies”, according to him. A debate as old as the maquiladoras.


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