Arizona is increasingly gaining recognition as one of the most attractive areas for manufacturers, but in collaboration with Sonora, Mexico, the two states have positioned themselves as one of the most competitive export manufacturing locations in the world. The Phoenix chapter of Lambda Alpha International (LAI), a global economic society, teamed up with its Sonora counterpart, Consejo Nacional de la Industria Maquiladora y Manufacturera de Exportación (INDEX), to host a forum recently focused on bilateral trade.
Combined with our neighbor to the south, the area is being touted as a “mega-region” in pulling together collective resources and highly-trained workforces to develop a major export hub. Other sectors including mining, automotive and health care are also contributing to the trend.
“The economic magnitude tells the story,” Patrick Welch, attorney at Jennings, Strouss & Salmon, and presenter at the event, said. “But there’s more than just the economics. It’s a shared border, which makes us more than just neighbors, given the fact that there is shared heritage, shared culture, families are typically bi-national.”
The Mexican manufacturing and factory (maquiladora) industry has been a historically thriving sector and INDEX and LAI are helping to strengthen the bridge between Arizona and Sonora to become a leader in the global economy.
“Specifically we focus on the maquiladora industry and their collaboration with U.S. companies,” Past International President of LAI Steven Gragg said. “During this time of divisive political discussions about border security, it is important to balance the discussion with the positive benefits of economic trade between neighbors. The favorable impact on real estate projects on both sides of the border are tangible.”
Another area of sympatico between Arizona and Sonora is that of the aerospace industry. Sonora manufactures 18.4 percent of the country’s aerospace parts and is home to one of the fastest-growing aerospace industry clusters in the country, being the source of $110 million in export dollars in annual revenue in the last decade. The industry has created more than 9,000 private sector jobs, including some on the Mexico side of Nogales. The American side of the split border town is also home to aerospace jobs and is included in the southern Arizona regional trend of boosting employment and development in that sector as a whole, which has been courting companies to move or expand their presence in the Greater Tucson area.
Here in Arizona, thousands of manufacturing companies are pushing the economy forward while boosting job growth and setting the state up for even more deep-rooted growth in the coming years. What’s more, Arizona manufacturing companies are opting for more tech-driven solutions to manufacturing, doing away with outdated assembly line methods.
The same thing is happening in Mexico, where the country is seeing more opportunities in manufacturing, including in the automotive realm. General Motors recently announced its push to head to Mexico for more building of new vehicles, opening the door for a more solid import-export relationship with Arizona.
“Our region is safer and more prosperous because of collaboration between Arizona and Sonora,” said Gov. Doug Ducey in a statement. “Our deep history of collaboration has resulted in valuable cross-border initiatives that contribute to the quality of life for people in both states.”
Together, Arizona and Mexico are leading in the automotive manufacturing industry, importing nearly $968 million and $761 million in auto parts back in 2016, with that number only rising. The industry supports around 51,000 employees who help produce nearly 1,500 vehicles a day.
Mexico remains Arizona’s main trading partner, making up about 30 percent of our state’s exports to foreign markets and about 37 percent of all our imports. This has helped outline a relationship based on sharing and competition in Mexico’s consumer markets.
“The border, to a large extent, connects Arizona and Sonora, I don’t think it divides us, I actually think it’s a conduit,” Welch said.