Bonnie Arbittier / Rivard Report
Some of the auto parts made for the heavy-duty Ford F-150 that Scott Williams drives are the size of a grain of pepper – assembled by collaborative robots in a state-of-the-art factory, where 1,600 highly skilled engineers and technicians wear electrostatic discharge lab coats and heel straps.
“Everything we produce is ready to be plugged into a vehicle, no assembly required,” Williams said of the millions of finished electronic modules and sensors Continental makes in Seguin, about an hour’s drive east of San Antonio. In fact, Continental modules exist in one of every three of the 12 million vehicles built last year in the U.S., he said, including his personal truck, which has at least three.
Williams is a plant manager at Continental, the 145-year-old German company that began as a manufacturer of rubber products and now builds everything from electronic sensors to brake systems and powertrains for vehicles, machines, and traffic and transportation systems.
The $51 billion company employs more than 238,000 people in 61 countries worldwide, 40,000 of whom are in the United States, with 1,600 at its Seguin plant, which it purchased from Motorola in 2006 for $1 billion.
But the Seguin plant Williams has led for the past 24 years is the company’s only electronics group in the U.S., producing blind-spot and engine control modules, exhaust systems with NOx sensors, and pressure sensors. While the auto parts are complete electronic systems commonly found in today’s vehicles, they also represent the kind of technology that will power self-driving, autonomous cars of the future.
Still, as Continental began to consolidate operations in the U.S., the Seguin plant was forced to compete with other sites around the world for the company’s business building sensors that improve vehicle performance.
“At that time, we were at risk of possibly losing that facility in our community which would definitely have been devastating to our tax base and what that facility contributes in terms of taxable revenue to the city, but most importantly, the effect on our labor force and the jobs that facility provides to folks not only in Seguin but regionally,” said Josh Schneuker, executive director for the Seguin Economic Development Corporation (SEDC).
In 2010, an incentive package that included $1.2 million from the Texas Enterprise Fund, $600,000 from SEDC, a five-year partial property tax abatement from Guadalupe County and City of Seguin, and a workforce training grant helped the plant beat out others vying for the project.
In return, Continental agreed to retain jobs, add hundreds more, invest millions of dollars in the facility, and expand their manufacturing capability. “It is very impressive for a community our size to have a ‘little USAA’ in our backyard in terms of the number of employees,” Schneuker said.
But manufacturing is the backbone of Seguin’s entire economy, he added. Continental is just one of more than 40 manufacturers of all sizes in the city of 28,000 – a list that includes Caterpillar, Cavco, and Niagara Bottling. With over 4,000 employed in manufacturing, the city has one of the highest number of manufacturing jobs per capita in the state of Texas.
“It’s really been our competitive advantage, and it’s really made a difference here in helping us be a manufacturing powerhouse,” Schneuker said. “There are some very impressive operations here … You really don’t think about the parts that plant makes and the effect it has on our everyday lives – there are so many companies here that do the same thing.”
Continental builds parts for every U.S. automaker and some Japanese, including Toyota Texas, and ships only to original equipment manufacturers – not auto parts retailers – in the U.S., Mexico, and Canada. The company receives goods and materials, mostly raw circuit boards, from both Asia and Europe.
Continental officials would not comment on how increasing tariffs may affect their global business, but pointed to the advocacy group Motor & Equipment Manufacturing Association (MEMA) for insight on how the industry as a whole is speaking out against the tariffs.
In formal comments addressed to U.S. Trade Representative Robert Lighthizer on Sept. 6, MEMA submitted: “Tariffs on the motor vehicle materials and products included on the USTR’s proposed list will have a disproportionate and significant harmful impact on U.S. consumers who rely on affordable products for the repair and maintenance of their vehicles. Motor vehicle component and systems manufacturers will also face significant cost increases as well, which could lead to job losses.”
From the outside, the Continental factory looks a lot like most work sites. There’s a landscaped pond in front and hundreds of cars lined up in the surrounding parking lots. Visitors check in using a computer monitor that prints personalized badges and are escorted past locked doors into an office area with standard cubicles.
Beyond that is a spotless and orderly factory of high-tech machines, computer systems, and monitors as far as the eye can see. Robots and collaborative robots, known as cobots, are in steady motion, completing repetitive tasks as the factory’s AGVs (automated guided vehicles) with personified names like Hanna, Max, and Ben transport supplies from one area to another. The factory is pressurized to keep out dust that could damage circuit boards, and the company recycles 85 percent of its packaging waste.
Click through the gallery below to see more images from the factory.
At any given time, at least 400 of the company’s lab-coated engineers and technicians keep the plant running around the clock, working within production lines labeled Ranger, Alamo, Lone Star, and more. Against the backdrop of steel-gray machinery blinking and humming are pops of color – custom parts that make the plant run better and safer, and are the handiwork of Continental’s mechanical engineers using 3-D printers.
Williams said each assembly line produces 100 units an hour, and never stops. Additional production lines are being built and tested to accommodate growing demand the company is currently facing.
Eric Garza-Colvin, head of human relations at the Seguin plant, leads the effort to recruit and train the employees needed to run those lines. Garza-Colvin worked at Toyoda Gosei in Michigan before taking the job at Continental eight years ago.
He said the company not only offers a compensation package that includes a six percent retirement match and three weeks of paid vacation, but also tuition reimbursement and internship and apprenticeship programs. Continental frequently also hosts school groups to expose younger students to the world of high-tech manufacturing.
The San Antonio Manufacturing Association (SAMA) recently chose Continental among the region’s 1,550 manufacturers to host its upcoming Manufacturing Day ’18. A national event being held Oct. 5, Manufacturing Day seeks to educate the public about what the industry is, and what it is not, said SAMA President and CEO Rey Chavez.
“Manufacturing [now] is not your grandfather’s manufacturing plant. Everybody has an image of someplace dirty, shoveling coal, and furnaces,” Chavez said. “Today’s manufacturing is advanced – it’s automated assembly lines, it’s robotics, and the equipment is computerized.”
The auto, aerospace, and heavy-equipment manufacturing sector is the largest of the four sectors in San Antonio, having grown from 5,000 employees in 2001 to 12,000 today.
“When you have a $40.5 million economic impact to our region, we want to make sure everybody knows there’s a lot of manufacturing in our area,” Chavez said.