Friday 21 October 2016

Detroit in the desert is a field of dreams for Irish suppliers

Conor Fahy

Published 16/10/2016 | 02:30

Conor Fahy is Enterprise Ireland regional director for Latin America. Photo: Fennell Photography
Conor Fahy is Enterprise Ireland regional director for Latin America. Photo: Fennell Photography

Flying across the Chihuahuan Desert, Saltillo suddenly appears, nestled under the shadow of the Zapalinamé mountains. At first, it seems a sleepy place, until the huge industrial complex just beyond the city comes into view.

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Saltillo, in Coahuila State, was once the capital of Texas before its war of independence. It was here that John Riley and the Batallón de San Patricio, aka Los Colorados because of their sun-burnt complexions and red hair, fought for Mexico. Their sacrifice is still remembered here every St Patrick's Day.

I was flying in to meet another Irishman who made his home in northern Mexico, Tipperary native Brian Ryan, of Brix Trading, who advises companies on doing business here.

He tells me over breakfast of myriad opportunities for Irish companies in the network of industrial parks created to attract auto manufacturers on the outskirts of Saltillo.

He explains that as the wave of car makers arrived - and later, others such as dairy, steel and household appliances companies - their supply chains followed.

Companies like Magna, ZF Sachs, Macimex and Delphi have big operations here but there are opportunities for Irish first-tier and second-tier suppliers and several are already here.

T Butler Engineering and Combilift are directly engaged in automotive, while Kentech,, Openet and Aerogen are among those operating in the wider economy.

Specialist moulding, lighting systems, wiring equipment, and manufacturing and safety technologies are in demand.

The Complejo Industrial Ramos Arizpe is a real-life example of the maxim from the movie, Field of Dreams, "build it and they will come".

Founded in 1974, auto manufacturers such as GM, Fiat/Chrysler and John Deere located here after it developed as a fully serviced cluster, in the 80s. Now, Saltillo has become a locus for the global automotive industry.

Row after row of giant factories spread out across the horizon like a physical testament to the scale of Saltillo's competitive advantage, with its highly trained workforce and lowest automotive labour rates in North America.

Just 300km from the US border, with 176 million people within a day-and-a-half drive, ease of access to large markets is very much part of why this city, along with Monterrey in neighbouring Nuevo Leon state, is known as Detroit in the Desert.

These cities are part of the Texas Mexico Automotive Supercluster (TMASC) linked by roads into the US from San Luis Potosí, several hundred kilometres south of Saltillo, and Tamulipas to the east.

This is the so-called NAFTA highway, named after the North American Free Trade Agreement which has so exercised Donald Trump during the US election campaign.

Back in Saltillo, the impressive local road network is filled with massive trucks moving vehicles and parts around in a continuous whirl. The distant bell of the trains heading north is constant throughout the night. This capillary network never sleeps.

I also meet the State Secretary of Economic Development who is proud of Saltillo's achievements. He emphasises the open and progressive business culture that exists here. Saltillo was voted the most dynamic mid-sized city in North America by FDI Magazine.

The economic benefits of Ramos Arizpe to the local economy are easily seen too, with colourful new homes springing up everywhere.

A new university was established in 1995 with local employers consulted on the curriculum. The Technological University of Coahuila now has 3,000 students on its engineering course, which involves on-the-job-training and revenues for the university. Around 80pc of graduates work in the auto industry here.

Clustering is very much part of Ireland's development strategy. Places such as Dublin's IFSC and Silicon Docks are examples.

While essentially, clusters are about providing an ecosystem appropriate to a particular sector - medtech around Galway; and life sciences in Cork are further examples - research suggests that it drives related industries creating a broader, more sustainable jobs base.

The evidence of Saltillo supports that conclusion. It seems that the St Patrick's Battalion forged a link between Saltillo and Ireland that still endures.

Conor Fahy is Enterprise Ireland regional director for Latin America

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