Are We Ready for Automotive Plant?

Case Summary : Are We Ready for Automotive Plant

At the end of 2008, McAllen had a lower unemployment rate compared to other cities in the US, but their economic not as good as the unemployment rate. The city of McAllen, Texas wanted to boost their economic activity by attract automotive companies to build manufacturing/ assembly plant in McAllen. They knew the need of automakers such as access to top-tier auto parts suppliers, lower wages, a higher education system with automotive programs and a convenient transportation system, and they established the MEDC with the ultimate goal to prepare the Edinburg-McAllen-Mission, Texas MSA as a ready site for automakers. They have the advantage from the proximity to Reynosa, Mexico with the NAFTA provisions, high availability of workforce, the low labour cost, strategic geographic location with timely access to national and international markets, and proposed incentives included the economic development grant and property tax reimbursement. But they also have the disadvantage with the lack of skilled labour as a handicap in attracting the auto manufacturers. The other potential sites Detroit, Michigan is equipped with abundant suppliers, offered a large financial incentive and reduction of personal income taxes, had highly educated workers available, accessibility to strategic transportation infrastructure, abundant and affordable energy and its proximity to Canada. Norfolk, Virginia has the experience with Ford automotive assembly plant, strong labour pool with good labour-management relations, sufficient infrastructure, had the availability of skilled workers and inclusive logistic, offered worker training and site preparation. Louisville, Kentucky lying in the centre of America’s “Automotive Alley” which enabled the JIT delivery, had an logistical advantage with the UPS hub for the US, utilized the lowest industrial power rates and possessed

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