Q: A decade ago, Texas was perceived as a remote location for automotive manufacturing. That’s clearly changing. What is Texas offering the industry?
A: Texas has many strengths for auto manufacturers. Its location is central to the U.S., with close access to Mexico and trade access to Canada. It has 11 deep-water ports and 28 border crossings with Mexico. The infrastructure is built around access to global markets. Texas is the country’s No. 1 exporter.
The talent is also a draw for automotive companies. It’s easy for people to relocate here. And there is a reasonable regulatory climate here that we’re still building on to make sure auto companies around the world understand that.
The perception was that Texas was just too far west of the Upper Midwest to be a viable location logistically for automaking. Is that perception changing?
It is. It started with Toyota’s decision to build its truck plant in San Antonio. A lot of people said that was just too far from the North American supplier network. But Toyota has expanded that plant, and last year it announced a $391 million expansion. The San Antonio facility led to Toyota moving their North American headquarters here from California in 2017.
We’ve also seen Navistar announce a new plant here. Continental Automotive as well as Aisin are investing in major new plants here. And most recently, Tesla has announced it will build its Gigafactory in Central Texas, where they will build its Cybertruck and the Tesla Semi and create 5,000 jobs.
These announcements and others are building on each other. The activity will continue to attract a supply chain.
What swung the deal for Tesla to select a site in Austin?
That site offers them good accessibility to markets — markets in the Eastern United States as well as the West. The availability of talent was also important to them. And it was also the regulatory climate and business friendliness here. Texas will be a partner to Tesla as they innovate.
What does that mean?
Gov. [Greg] Abbott has led Texas in economic development, and he believes Texas cannot be successful unless its businesses are successful. So we want to make sure that the business climate here is such that they can pursue their success. It also means offering a university system to provide the research to help them and the work force pipeline they’ll need to fill future needs.
Texas has enjoyed a robust economy in recent years with the oil boom. How much of a challenge is it to recruit auto workers in an environment where automotive isn’t necessarily at the top of career choices?
We’re developing a pipeline from high school to community colleges to the Ph.D. level to support employer needs. We’re working with 28 work force development boards spread across the state to make sure the local population has access to training programs, and employers can take advantage of customized worker training programs through our Skills Development Fund. I know Tesla will be taking advantage of that.
We’re also positioning ourselves as an advanced manufacturing and technology hub. General Motors is creating a center for technology excellence here in the state.