EL PASO, Texas (Border Report) – Historians and labor advocates remember how El Paso was once a major apparel manufacturing hub in the Southwest. Farah Inc., for instance, operated five factories in El Paso that employed at least 3,000, according to the Texas Stated Historical Association.
But labor costs and other issues made manufacturers look across the border. Most major assembly plants in the region are in Juarez today, not El Paso. Now, a group of local entrepreneurs is trying to lure new industry – and new jobs – north of the border, and its leaders say this is the right time to do it.
“Unfortunately, there is a lot of violence in Mexico, so that makes manufacturing companies think twice before they can build in Mexico,” said Sergio Castaneda, president of the nonprofit El Paso Trade and Manufacturing Council. “In Juarez, they’re running out of space, so (companies) are looking not grow either in Southern Mexico or El Paso.”
Leaders of the 2-year-old nonprofit are not plotting to take existing jobs from Juarez but rather to give manufacturers from the Midwestern United States to Europe another reason to come to the region.
“There is land in El Paso that we can (use) to provide opportunities for the manufacturing companies. That’s our main objective, to convince them that El Paso is in a great situation. We are on the border, we have 2.2 million people between Ciudad Juarez an El Paso,” Castaneda said. “If we convince them that the geography, the (availability of) land, the security – El Paso is a very safe city with a great environment to live in – so that creates tons of jobs, tons of growth” for the region.
El Paso already has a very active Borderplex Alliance trade promotion group that has worked with city and county leaders in recent years to lure companies like Amazon, TJ Maxx and Schneider Electric here. Just across the state line in Santa Teresa, the Border Industrial Association has had a hand in turning a piece of desert into one of New Mexico’s fastest-growing economic engines.
The El Paso Trade and Manufacturing Council is trying to carve a niche focusing on manufacturers.
“We are an organization formed by local stakeholders with 100 years of experience in industry. We got together with ideas, and we saw an opportunity because we have 10 to 20 manufacturing plants in El Paso; in Juarez they have around 400.”
The biggest obstacle for manufacturers to choose El Paso over Mexico is labor costs. The minimum wage in Texas is $7.25 an hour; in Juarez, it is $8.60 a day.
Castaneda said he’s aware of the disparity but his two decades-plus of experience in transportation and logistics makes him confident the group’s goal is achievable. El Paso has some of the most efficient transportation companies in the country, and there’s the advantage of your merchandise not having to sit for hours on the Mexican side waiting for clearance at U.S. ports of entry.
“We have opportunities on transportation costs, it saves a lot of cash,” Castaneda said. The components assembled in Juarez “have to be sent back for (further) refurbishment. That means costs in transportation and costs in the supply chain. If a manufacturing plant establishes here in El Paso, they will supply to the maquiladoras just across the border. So now we’re manufacturing here, we are creating jobs here, we’re creating growth here and we’re helping the maquiladoras across the border. Together, we become a bigger region.”