DRIVING SIX YEARS OF AUTOMOTIVE GROWTHSat, 09/01/2018 - 11:04
Q: What would you consider the highlights of your administration regarding new investment?
A: During this administration, we have consolidated Guanajuato as the biggest automotive cluster in Latin America. We have assembly plants belonging to OEMs such as Mazda, Honda and GM, as well as component manufacturing facilities from others such as Ford and Volkswagen. Toyota will shortly finalize the construction of its new venture in the country. By 2020, we expect Guanajuato will be the main vehicle producer in Mexico and Latin America.
In terms of foreign direct investment, we had projected a total of US$5 billion by the end of the administration but we will close our six-year period with almost US$13 billion in new projects. Consequently, we have had a great impact on the state’s unemployment rate, driving it down to 3.5 percent, which is barely above the national average of 3.1 percent. Guanajuato has recently been among the main states regarding job creation and by the end of the administration, we will have generated 300,000 new positions. Only in 2017, 62,000 new jobs were created, leading to an average of 50,000 new positions per year.
Q: How have you helped Guanajuato become a pinnacle of the automotive industry in Mexico?
A: Human capital has been key for the development of Guanajuato. We are now the leading state in terms of training and in the opening of academic slots due to the industry’s talent demand. At the same time, educational institutions are gradually adapting their programs based on what companies require and our offering of robotics, nanotechnology, aeronautics and pharma engineers has increased considerably.
We have also worked extensively to ensure new investments have strong support. We wanted to close the administration with seven new industrial parks and the end result was 27 and an additional offering of 2,000ha of available space. We are growing beyond the traditional industrial corridor, offering companies new areas in the north and south of the state where there is more available talent looking for job opportunities. We are taking the industry to the employee, instead of trying to take the employee to the industry.
Q: How is Guanajuato helping SMEs to adopt digitalization and technology into their processes?
A: In 2017, Guanajuato was the first state in the world to declare a year focused on innovation. We collaborated with UNESCO to diagnose how the state was doing regarding technology and what we want to achieve by 2040. This initiative went beyond the industry and included cultural, sports, agricultural and other elements that could help Guanajuato reach the concept of Industry and Company 4.0. We also organized the Innovation Forum, which was one of the most important technology events in Latin America, and we established the basis for this to be an annual event in Guanajuato.
We want the state to be committed to the idea of Industry 4.0. Today, we have eight innovation parks, supported by a strong network of universities and research institutions. Moreover, Guanajuato is third for patent registrations nationally according to the Mexican Institute of Industrial Property and first in GDP generation due to patent registrations according to UNESCO. We went from zero innovation in the state to leading our nation’s committee to the World Educational Robot Contest with nine students from Guanajuato out of the 15 that traveled to Shanghai to compete.
Q: How are you ensuring continuity in Guanajuato’s investment promotion strategies?
A: Investment promotion is not only dependent on state policies and all investment projects are approved by a citizen’s council. That being said, Guanajuato offers legal certainty above anything else. According to the National Institute for the Consumer, we are among the Top 3 states for contract fulfillment. As a result, companies know that whatever contracts they sign with this administration will stand once the new government arrives. We also offer certainty based on the development plan we have structured for 2040, which helps investors understand where the country will be in the next couple of decades.
Lastly, according to INEGI’s last census, Guanajuato appears to be the region with least corruption in the country thus providing transparency in every process a company must follow with the government.
We expect all these factors will offer certainty for investment to continue arriving to Guanajuato after we leave office. We have 100 pending projects to bring new investment to the state, 70 percent of them oriented to the automotive industry.
Q: Considering the current renegotiation of NAFTA, what is Guanajuato’s position regarding international trade?
A: We are actively participating in the discussions regarding NAFTA, not only related to the automotive sector but also to the textile and agricultural segments. Automotive, however, is the hottest topic so far, mainly because of the discussion on rules of origin. We think reality will prevail; the market is not something we can control and it must follow supply and demand laws, as well as the best conditions regarding cost. We must find a solution that satisfies every party and we are firm believers that if Mexico wins, the US and Canada also move forward.
We are confident that the government will reach an agreement soon and that certainty will return to the market. Nevertheless, we are prepared for a scenario with or without NAFTA. We know that if NAFTA is canceled there would be an impact on our operations but it would also open an opportunity to further diversify those operations. The CPTPP, for example, opens new possibilities for our products to be exported to Asia and South America. Right now, Guanajuato exports to over 125 countries representing US$22 billion per year when 20 years ago we only exported to three countries production worth US$200 million. If we consider this administration alone, we started 2012 with US$11 billion yearly in exports and we have doubled that number. We need to diversify our operations but not compromise the good relationship we have with our North American neighbors.
Q: Considering Guanajuato’s 2040 vision, what should be the state’s priorities to maintain the growth momentum?
A: Creating and maintaining trust of new investors should be a priority. Our administration was built on trust and delivering on our promises regardless of the contracts we might sign. Especially in an uncertain environment, the best thing we can offer companies is confidence regarding their investment no matter what. Furthermore, we must consider ourselves as account managers, which means that we must follow up on any relationship we establish with new investors. We are allies and partners throughout the lifetime of their investment and not just while the plant is being built.
Education must also be a priority to ensure growth. The state must continue supporting academic institutions and incentivizing the establishment of dual-education programs. At the same time, we must not lose our logistics competitiveness. By the end of the year, we will deliver the Celaya railway bypass and in our 2040 plan we foresee the construction of another bypass in Irapuato. Similarly, Guanajuato must focus its efforts on the development of an integrated mobility strategy that includes a passenger train for people that travel from one city to another on a daily basis. We also met with Hyperloop One in Los Angeles to learn about their project to build a hyperloop train that would go from Mexico to Queretaro, Leon and Guadalajara. We will pass that information to the new administration.