Are We Ready For An Automotive Plant?
Keith Patridge as president of the McAllen Economic Development Corporation (MEDC) had strove incessantly to promoted the city’s economy. McAllen located in southern Texas. West Point city had beat out McAllen by becoming the new location of Kia Motors Corporation manufacturing plant. McAllen tried to attract European automotive companies. The key advantage that McAllen had was its closeness to Reynosa, Mexico that had abundant automotive component suppliers. Having an automotive plant in the Rio Grande Valley would present a tremendous economic boost for McAllen. This would increasing the annual salary for the autoworkers from $28,548 to $40,000.
There are several factors for an automotive company when choosing a site. Labour cost, the automotive company sought main suppliers who could also reduce labour cost, which would enable lower material cost in this competitive environment. Union activity, high union activities were seen as the partial cause of the failure. The automotive industry had implemented the lean manufacturing system, JIT and TQM and these need multi-tasking skills workers, these methods had not been received well by some unions. Financial incentive, a major portion of financial incentives was comprised of tax benefits and a reduction on property tax. Workforce availability, an automotive assembly plant required operator skills that were more advanced than a typical light manufacturing operator. Supplier availability, the availability and proximity of qualified suppliers affected the efficiency of market-driven reaction and tranportation cost. Living cost, demonstrated the living quality and buying power for the future employees.
McAllen counted as potential sites because it had high availability of workforce, the low labour cost was another competitive advantage and McAllen’s strategic geographic location included over 200 existing automotive suppliers. McAllen had good infrastructure logistic....