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MAY 2005

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U.S.-MEXICO BORDER REGION



Mexican Industrial
Development Comes of Age
Border Points to All of NAFTA
Foxconn, a mobile handset branch of Taiwan-based electronics firm Hon Hai Precision Industry Co. Ltd., supplies Motorola and Nokia, among others. The company is building a $30-million, 60,000-sq.-ft. (5,574-sq.-m.) complex on this 43-acre (17.4-hectare) site in Juarez.
      In keeping with an ongoing trend at the border and elsewhere in Mexico, the company is not only locating manufacturing in the country — to the tune of 500 employees initially — but product development as well. It is negotiating with the State of Chihuahua to eventually bring R&D activity to the site, with the aim to make it a center of operations for all of North America.
      The company operates other factories in China and Hungary.

    Mexico's urban centers on the border are another story, with significant changes under way in many since substantial investment in the region has resumed.
      "Mexican cities are adopting master-planned communities and are getting away from the old model of a cluster of manufacturing plants in an industrial park," says Mike White, managing director, international real estate services, at CB Richard Ellis in El Paso, Texas, and Juarez, Mexico.
      "They are very strictly zoning a ratio between manufacturing sites and residential sites, and they are co-locating the residential with the manufacturing so that the worker can walk to work and the manufacturer has a ready source of labor in his neighborhood," White explains. "This is a big plus for manufacturers, because it has reduced the amount of bus transit time and cost to the manufacturer to get their work force to the plant every day. This is making it easier for manufacturers to locate and to be successful." Plants can now be sited within industrial bands located along major highways with residential development adjacent.
      A younger, savvier development community is behind this emerging trend, but state and city governments are realizing, too, that this new approach to zoning results in a better use of the infrastructure. U.S. investors win, says White, because they do not have to compete as intensely with other manufacturers for labor.
     
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