While maintaining its dominance in the television manufacturing industry, Tijuana continues to expand its industrial might into other sectors such as aerospace, automotive and healthcare.

      Foreign manufacturing is the engine that drives the economy here. Manufacturing in Tijuana represents 45 percent of the permanent jobs in the private sector. The new growth areas may surprise some.

      “It is true that these sectors have grown in the past few years; it is also important to mention that the presence of the plastics, metal mechanic, electronic and IT (Information Technology) sectors has increased as well,” says Gerardo Brizuela, president of the Tijuana Economic Development Corporation.

      Tijuana is the fourth largest city in Mexico and the fastest growing metropolitan area in the country. Its proximity to San Diego and other cities in California facilitate access, not just physical, but access, in a real time sense. Today, changes in demand need to be reflected in the manufacturing process immediately. Tijuana’s proximity to the huge markets of the United States, and to the West Coast’s and California’s, is not only about physical connectivity but about immediacy reflected in shorter time frames to adapt and adjust quickly to changes.

      The Tijuana- San Diego region will become increasingly attractive to industries that need to adapt quickly to market conditions or to industries whose product turnover time is highly sensitive to consumer demand or new technology, whether they serve the U.S. and Canadian markets or are looking to enter the Latin American markets.

      More than 1,000 manufacturing establishments employing more than 300,000 hundred thousand workers on both sides of the border attest to the region’s level of competitiveness. Many Research and Development departments are locating in the area because of the same factors that their manufacturing counterparts are finding in the region.

    “We would like to see more design centers open in the area,” Brizuela says. “Some companies in the medical and electronic fields have already begun opening centers in Tijuana. We consider that we are ready for design centers from the automobile sector to begin operating in the city. Currently, the most desirable sectors for our region would be medical and aerospace.”   

  In the short term the advantages are clear. On the Tijuana side:

      •Labor is inexpensive compared to any U.S. city and competitive with most of the world’s emerging economies. The cost per production hour can be five or more times less than its U.S. counterpart depending on the type of industry and the size of the facility.

      •Labor is available for more sophisticated processes resulting from an industrial work force that has been maturing over a period of more than 40 years and a population that is increasing its educational level whether it be in technical or professional careers. Tijuana still grows at an annual rate of more than 5 percent per year.

      •Labor is productive and trainable as demonstrated by the region’s ability to adapt and change with world trends. A few years back, Tijuana was referred to as TVjuana for being the world’s largest producer of television sets. It still is, yet today it also is a large producer of computers, sports and medical related products.

      “Labor in Tijuana may be described as well-educated and highly skilled as a result of the city’s vast experience in manufacturing and its processes,” says Brizuela. “Since the city of Tijuana has adapted to new industry tendencies, there has been establishment of companies demanding labor with more skill than what they demanded five or 10 years ago. The city’s education system and the availability of well trained labor in the area have supported industry growth.”

      With 40 years of industrial development in the area, an extensive supplier and service support base has been established that provides companies locating in the area with goods and services at competitive prices. What you cannot find in Tijuana is usually immediately available in San Diego or elsewhere in Southern California.

      The infrastructure (utilities, real estate, customs, logistics, construction, etc.) to support manufacturing facilities is in place, is growing and  is price competitive with most emerging countries, with the difference that it has already been put to the test. It is a major electronics cluster with a growing computer telecommunications and medical product manufacturing presence.

      For the emerging clusters, Brizuela offers this analysis.

Aerospace

      “This sector in particular is becoming very strong in the country, not only because aerospace companies are looking to reduce their labor costs; but because they have found that the Mexican government is very enthusiastic in its promotion of this industry,” he says. “Some other factors that are playing a role in this increase are the new safety agreement with the United States and an increasingly sophisticated Mexican workforce. It is also important to consider that Mexico is becoming an important center for airplane maintenance as a result of companies looking to reduce their costs.

      “Currently, there are 23 aerospace companies established in Tijuana, employing approximately 6,000 people. The two most important aerospace companies operating in the city are Eaton Aerospace and Zodiac. Their main challenge has been finding local suppliers, specifically certified machine shops. Thus creating a great opportunity for new companies to come to the region and supply to the local demand.”

Automotive

      “The automotive industry has a strong presence in our area, with 47 companies currently operating in our city generating around 18,000 jobs. The largest and most important automotive company in Tijuana is Toyota, producing over 50,000 pick-up trucks per year. Hyundai has established itself as the second most important automotive company in the city, where they are currently refurbishing transmissions and manufacturing truck chassis. They are also manufacturing the Shelby Cobra; they are in the process of increasing their capacity from 1 car to 3 cars per day.

      “There are several Asian companies interested in relocating to Tijuana in the future because they want to take advantage of the city’s proximity the U.S. West Coast and as a result to the American automobile market.”

Healthcare

      “The healthcare sector has become one of the fastest growing and stable sectors in the area. Tijuana has become the leading manufacturer of medical devices in the country, with 40 companies creating approximately 27,000 jobs. The major healthcare companies established in Tijuana are Smiths Medical, Tyco Healthcare, Cardinal Health, Pall Medical, Medtronic and DJ Ortho, among others. The newest companies to establish in the city are Welch Allyn and Medegen. The growing number of companies in this field has led to a lack of suppliers primarily in the sterilization area and resin distribution centers.”

      On the San Diego side the advantages are many:

  •A broad base in technology from computers and electronics to developing clusters in telecommunications and biotechnologies as a result of the availability of a highly educated technical workforce. The region comprises the third largest concentration of bioscience companies in the United States.

      •The existence of world-class universities and research programs, ranging from three dimensional microscopy to brain organization and operation to basic research in immunology.

      •A wealth of business and labor force talent and experience, as demonstrated by the city’s ability to attract major corporations such as Gateway, Sempra, SAIC and Qualcomm, among others to locate their headquarters in the region.

      •A network of support entities, committed to nurture and support technology companies, as evidenced by the fact that more than 6.5 percent of the private sector work force in San Diego is employed in high tech. An unparalleled quality of life matched only by the region’s near perfect weather, making San Diego one of the most desirable cities in the world in which to live and work.

      Tijuana is looking to:

      •Increase technological content in the manufacturing processes that are currently being performed in the region, increasing the wages of employees and their families’ quality of life.

      Reinforce the existing electronics manufacturing cluster and enhance the possibility of creating a medical supplies and devices and computer related products clusters by strengthening the supplier base, the education system supporting technical and professional training and education and, increasing the capacity of the existing infrastructure.

      •Diversify its manufacturing base with industries that favor a higher technology manufacturing base while reducing their dependency on labor.

      San Diego on the other hand, is pushing hard to become a world-class high tech center supported by:

      •A commitment to become an international powerhouse in bioscience and telecommunications by supporting its institutions of higher learning in the development of research and development grants and programs and enhancing the city’s overall business climate.

      •Continued promotion of information technology based industries in the region through support of NAFTA and a vigorous program to reinforce the ties with its regional partner Tijuana that can sponsor continued growth and diversification.

      •Adapting quickly to the continuously changing environment of the defense and space industry to influence growth in this traditionally strong sector of San Diego’s economy by selling the region’s intellectual capital, emphasizing the continued presence of support industry clusters and taking advantage of the shift in emphasis to high technology products and R&D services within the industry together with the ongoing transfer of technologies from military to commercial applications.

Manufacturing know how

      These 40 years of industrialization have had an impact on every aspect of life in Tijuana. As a consequence manufacturers looking to establish their production facilities in the area can gain additional benefits not found in other less experienced areas, such as:

      •An education system that takes note of what industry needs and addresses those needs at all levels, producing workers from technicians to professionals in the required areas.

      •A system where emphasis is placed on new technology and communicating in English.

      •A labor force that understands the industrial culture that can perform under the circumstances that this culture requires of its participants.

      •A supplier and services support base that facilitates and expedites in keeping with a world-class level of expectation.

      •An industrial base that is organized and can assist and consult with the newcomer, providing invaluable advice on all issues related to the area, from labor practices to cultural issues that may impact operations.

      •An ever improving infrastructural base that is modified primarily to accommodate the needs and requirements of industry and its personnel.

Logistics

      Tijuana has two of the most important Ports of Entry in Mexico representing approximately 20 percent of all of Mexico’s import/export transactions. The U.S. Customs Office and Immigration and Naturalization Service have established the Dedicated Commuter Lane in both ports of entry, making border crossing activity fast, modern and secure. Tijuana’s ports of entry are within a 30-minute drive from any given location in the city.

      Tijuana offers daily rail freight service to and from the Ports of San Diego and Los Angeles via the SD&IV (San Diego-Imperial Valley Rail System). Additionally, the Amtrak station in San Diego, 20 minutes away, offers 20 daily passenger trips to and from Los Angeles. The railroad station is connected by trolley to the San Ysidro Border Crossing facilitating commuter traffic between the two cities.

      Mexicali, two and a half hours distance from Tijuana, has connecting rail routes via the Mexican National Rail System to every destination in Mexico.

      Tijuana’s International Airport is the most important airport in northwestern Mexico, with 120 daily flights, including daily services to Los Angeles, CA. and Las Vegas, NV. Nine airlines service the Tijuana airport, offering national flights throughout Mexico.

      San Diego’s Lindbergh Field is located just 30 minutes away, serving as hub for 20 major passenger airlines and 550 daily flights connecting to all points in the continental U.S., as well as international destinations. Six cargo service airlines with 17 flights a day are available at Lindbergh Field.

      San Diego’s Brown Field is located in Otay-Mesa and is used mostly for cargo and private planes. This general aviation facility is only 4 minutes away from the Otay-Mesa Port of Entry.

      Connected to the city of Ensenada by a modern limited-access highway, Tijuana is a short 72 miles from the port city, a maritime facility whose privatization process has resulted in additional infrastructure and upgrades.

      The Port of San Diego also plays an important role in selecting Tijuana as the ideal site in which to do business. San Diego’s Port facilities handle approximately 2,120,140 cargo tons per year and more than 1,200 ships annually.

      The Port of Los Angeles/Long Beach is one of the most important ports in the United States. It is two hours away, with sufficient capacity for loading and staging any type of cargo, offering extensive global distribution connections.

...Continued in the pages of Twin Plant News, Subscribe Today!