If international trade is the engine that drives growth, Laredo, Texas and Nuevo Laredo, Tamps. are the keys to the engine.

      Nearly half of all trade between the United States and Mexico passes through Laredo and Nuevo Laredo. More than 9,000 trucks a day clear Customs at the World Trade Center bridge connecting the two cities. Nearby, the Colombia International Bridge links Laredo with Nuevo León.

      The two Laredos, actually one city divided by an international boundary, sit halfway between Monterrey and San Antonio, at the center of the primary trade route connecting Canada, the United States and Mexico. From Laredo, Texas major Interstate highways connect with points in all directions. The so-called NAFTA Highway connects Nuevo Laredo, Tamps. to Saltillo, Monterrey, Mexico City and other cities in Mexico’s industrial corridor.

      Laredo offers markets, business opportunities and profit potential which business and industry simply cannot find anywhere else. Among the companies located here are Sony, Ford, Delphi, Medline, Teleflex, Rheem, General Motors, R.G. Barry, Emerson Electric, Caterpillar, Mattel and others.

      Together, the two cities represent one of the world’s most-important cross-border transportation points, with more than 9,000 truck crossings daily via the World Trade Bridge – just one third of its capacity. By rail, an estimated 1,200 cargo cars cross daily on the Texas-Mexican Railway and Union Pacific Railway lines.

      The two Laredos form the United States’ largest inland port, with 700 of the Fortune 1000 companies transshipping finished goods and raw materials through the port of Laredo. More than half of all trade between Texas and Mexico, and 38 percent of all trade between the United States and Mexico pass through Laredo.

Nuevo Laredo

      Nuevo Laredo has a work force of approximately 116,000 people. Currently, maquiladoras employ 24,500 of these workers.

      Despite its seemingly ideal combination of location and available workers, Nuevo Laredo’s maquila industry has not grown as fast as those in other border cities. Guillermo Fernández de Jáuregui V., president of the Comite para el Desarrollo Industrial de Nuevo Laredo, A.C. (CODEIN), says that probably is the result of the false notion that there are union problems in Nuevo Laredo.

      Jáuregui says that there were union problems nearly 20 years ago, but that there hasn’t been a strike in Nuevo Laredo in more than a decade.

      Larry Shaw, plant manager at Modine Transferencia de Color, S.A. de C.V., agrees.

      “The workforce here is very stable,” he says. “In my 10 years the relationship with the union has always been good.”

      Most maquila workers here are members of CTM (Confederación de Trabajadores de México). According to CODEIN, the unions are committed to job creation. If requested by management, they perform many of the normal U.S. corporate personnel management functions, such as recruiting, training, discipline, hiring and firing workers.

      The Nuevo Laredo CTM chapter recruits and screens prospective applicants according to management’s stated requirements and assists management in discharging and replacing unsatisfactory employees.

      Labor unions also actively assist plant management to encourage punctuality and to minimize absenteeism.

      Shaw, who is also president of the Laredo Manufacturers Association, says workers here are suitable to the task. He says finding technical help can be difficult, but that Nuevo Laredo’s proximity to Monterrey Tech in Monterrey makes it perhaps easier here than elsewhere in Mexico.

      “This whole region is well served,” he says. Maquilas respect each other’s workforce and employee raiding is rare, he says.

      Nuevo Laredo offers companies savings on transportation costs, and in a global environment where every advantage helps, that cost savings should be significant.

      “For companies looking to cut cost wherever they can, being as close to the United States as possible should be a savings,” says Jáuregui.

      Jorge Javier Vázquez Elizondo, president of the Asociación de Agentes Aduanales de Nuevo Laredo, A.C. (Customs Brokers Association), says he sees no reason why Nuevo Laredo cannot handle more industries. He says there are sufficient trucking companies, customs brokers, freight forwarders and other cargo facilitating companies in the region to accommodate a doubling or tripling of industry.

      “It’s only right since the first maquila opened here in 1962,” he says. “Now is the time for big companies to see Nuevo Laredo. The boom is coming in the industrial sector.”

      Business leaders on both sides of the border are excited about the 2005 opening of an automotive assembly in San Antonio, Texas by Toyota. That Toyota vendors will relocate to Nuevo Laredo is considered a given.

      “One of the biggest advantages we see here is the closeness to San Antonio,” says Nicolas “Nick” Ferrara, director of the city’s Economic Development Department. “They have been looking at some of our local industry already. We are only 150 miles from San Antonio and San Antonio is growing like mad.”

  It is growing so much, that Ferrara estimates it may be quicker to reach Toyota’s plant on the south of San Antonio from Nuevo Laredo than some of the industrial parks on San Antonio’s north side.

Productivity

        The maquilas that are here have found success. Sony’s Nuevo Laredo plant has been one of the most productive and competitive sites since 1979. Sony produces recording audio, video and data media products that deliver long-lasting, dependable quality. This plant has been for years one of the most efficient and productive plants of Sony. It recently was transformed in a vertical integrated business unit with direct sales from the factory into the Mexican and Latin American markets.

      The Visteon Lamosa plant in Nuevo Laredo has won the Q-1 award for high product quality every year for several years. Caterpillar’s Tecnología Modificada S.A. de C.V., has won its in-house top award three years running.

Training

      Approximately 100 young engineers received a bachelor’s degree every year from the Nuevo Laredo’s Institute of Technology. The college graduates are widely hired by maquiladora plants. Students are trained with U.S. textbooks, majoring in production, electronic, mechanical, computer systems and industrial engineering.

  In addition, the Technological Institute cooperates with the Laredo Community College in offering customized employee training for both the Nuevo Laredo and Laredo’s employers. Additionally, the state government has created the Tamaulipas Institute of Job Training (Instituto Tamaulipeco de Capacitación para el Empleo, (ITACE)), which works closely with the State Department for Employment Services (Servicio Estatal de Empleo [S.E.E.]), to offer free training, in different topics required by the local industry. Maquiladoras and any other company may request a specific training course for up to two months, based on their own production process, free-of-charge.

State Incentives

  The following incentives are available:

  •Abatement of 50 percent of the 2 percent payroll taxes during the first two years of operation.

  •Abatement of registry cost in the Public Registry of Property and Public Registry of Corporations for the Articles of Incorporation and increment of capital which will develop productive activities.

  •New or existing corporations looking to expand their operation and creating new jobs will receive training from ITACE.

Municipal Incentives

      City incentives include the following:

      •Reduction in property tax on urban, suburban and rural land.

      •Reduction in taxes for acquired property.

      •Abatement of copyright costs for certificates, notarization, notarized copies, research and validation of documents.

      •Abatement in cost for planning, zoning and paving services.

      •Building permits.

      •Building / land use permits.

      •Reduction in contract service of water and sewage.

      •Improvement, modification, beautification and maintenance of roadways.

Laredo, Texas

      Laredo, Texas is booming.

      The U.S. Census Bureau recently reported that Laredo’s MSA is the fastest growing in Texas and one of the fastest growing in the United States. The January, 2002 MSA population stood at about 200,000 people, and the city-only population at about 193,000 people. With more than 500,000 people living just across the river in Nuevo Laredo, the Los Laredos area has a combined population of 700,000.

      Fortunately, Laredo’s economy has more than kept pace with population growth. Consider that in the 16 years through 2003:

      •U.S. exports to Mexico increased 616 percent.

      •U.S. imports from Mexico increased 573 percent.

      •Total U.S.-Mexico trade increased 590 percent.

      •Cross border loaded trucks increased 511 percent.

      •Passenger traffic at Laredo International Airport increased 205 percent.

      •The city population increased 68 percent.

      •Unemployment dropped to 6.8 percent from 15.3 percent.

      •Building permits increased 433 percent.

      •Sales tax rebates increased 356 percent.

      Laredo historically made its living facilitating trade between the United States and Mexico and today does it better than any other city. It has more than enough capacity for cargo handling, logistics, warehousing, freight forwarding and other trade-related services.

      Its infrastructure is new and up-to-date. A modern loop highway system routes traffic through and around the city. Its airport is one of the top 10 airports in the United States in terms of cargo handled. Modern industrial parks are available for cargo staging and distribution activities.

      John A. Adams, Jr. is executive director of the Laredo Development Foundation, a private, non-profit corporation funded and governed by local business and civic leaders dedicated to Laredo’s economic development. He says Laredo has everything in place for new business.

      “I tell people coming here they’re all going to make the same two mistakes,” he says. “Number one is you’re going to buy too small a building and number two is you’re losing money every day that you aren’t already here.”

      The two Laredos are marked by the cooperation between cities.

      “If someone in Nuevo Laredo has a cold, someone in Laredo is making chicken soup,” says René González of the Laredo Mayor’s Office.

      Daniel Hastings, president of Daniel B. Hastings Inc., a Laredo U.S. Customs brokerage, says the talk of cooperation is not rhetoric.

      “Laredo is like a mirror,” he says. “If something good happens on one side but not the other, we’ve only solved half the problem.”

      Laredo’s 6.6 percent unemployment rate is the lowest of Texas border cities. Still, incentives are available from the county and city governments to attract new business.

      Laredo and Webb County both offer five-year property tax abatements to companies that invest in the community and create new jobs. The amount of the abatement is negotiable and varies depending upon the amount of additional investment and the number of new jobs created.

      Laredo and Webb County do not tax inventories held in warehouses less than six months, as prescribed by the State Freeport Exemption.

      State incentives include:

      •Texas has no corporate income tax.

      •Texas has no individual income tax.

      •Texas has the lowest average fuel and electricity energy cost in the United States.

      •Texas has the second lowest average state tax burden in the United States.

      •Texas has the third lowest cost of living in the United States.

      •Texas Capital Fund grants pay up to $500,000 for site utilities including gas lines, water and sewer lines, roads and rail spurs.

      •Texas Manufacturers who complete a Predominant Utility Usage study may obtain an exemption from payment of state sales tax on utilities usage.

      •Job training programs are offered by the Laredo Community College, Laredo Job Corps Center, Ser-Jobs for Progress, Texas Careers and Southern Career Institute.

Foreign trade zones

      Laredo has four active Foreign Trade Zones sites, one at Laredo International Airport and three at local industrial parks, covering a total of 3,500 acres. FTZ’s offer substantial savings on delayed, reduced or eliminated U.S. Customs duties. Foreign and domestic merchandise may be moved into these zones for storage, assembly, exhibition, manufacturing or other processing, for indefinite periods, without payment of Customs duties until it leaves the zone and enters the U.S. for domestic use. When the duties are paid, the importer may pay on either the finished product or the original foreign material, whichever is less. In addition, material in FTZ’s is not subject to Texas inventory taxes.

Financing

      The Laredo Development Foundation operates a Loan Assistance Center, which is affiliated with SBA’s Small Business Development Center program, and a 504 Certified Development Corporation. Local banks, with more than $6 billion in assets (Laredo is home to the largest minority owned bank in the United States and the second largest bank headquartered in Texas) are prepared to cooperate to offer the most favorable terms available, and provide experienced, bilingual international departments for companies doing business in Mexico.

      “There isn’t a loan in South Texas that we can’t handle,” says Juan Rangel, senior vice president, international department, at International Bank of Commerce.