Courtesy / Toyota Texas.
Seventh in a Series: A Rising Southside
This week we continue our series examining the economic, educational and cultural growth on San Antonio’s Southside. Links to the first six stories can be found at the end of this post, including the series opener: “It’s The Decade of Downtown, But Don’t Miss San Antonio’s Rising Southside.
Ask your friends, neighbors or co-workers if they’ve visited the Toyota automotive assembly plant on San Antonio’s Southside. Unless they’re a member of the city’s civic, business or military leadership, or a student on a school field trip, the likely answer is no.
Too bad. Toyota Texas offers individuals, groups and schools free tours. What you’d find there is one of the world’s most advanced automotive manufacturing facilities – what former Mayor Henry Cisneros calls, “Perhaps the most important economic accomplishment and development in San Antonio in the last 50 years.”
As a young boy in Michigan, I eagerly awaited the school field trip to Dearborn to tour the Ford manufacturing plant and the Henry Ford Museum. Ford’s name was synonymous with American ingenuity and industrial power in the last century, and every Michigan school kid new Detroit was the center of the automotive universe.
Now the number one automotive company in the world is Toyota, and the most advanced of Toyota North America‘s nine U.S. plants is on the city’s Southside, once the most neglected and underserved part of San Antonio.
“The best thing about Toyota is that it is in the right place in terms of where the city needed it,” said Cisneros, founder and chairman of CityView, an institutional investment firm that focuses on urban real estate and infrastructure projects. “It is almost unimaginable that something so appropriate, in terms of scale, job, training potential, the investment, would come to the Southside of San Antonio, the part of the city with the greatest needs, the poorest school districts and a workforce without many opportunities. Now we have a world-class automotive company there, arguably the number one entity we would have wanted to land there. It’s been a perfect, perfect match.”
Given Toyota’s isolated campus and manufacturing plant – not visible to much of the city’s vehicle traffic – many people in San Antonio still do not have a full appreciation of Toyota’s importance as an economic and job generator, and as a catalyst for change and growth on the Southside.
That’s why I believe every grade school student in San Antonio, and their parents, ought to take that field trip to Toyota Motor Manufacturing Texas (TMMTX). It’s a great place to see big numbers come to life on the advanced assembly line, the kind of numbers changing the city and broadening it as place of opportunity.
October marks the 10th anniversary of Toyota breaking ground on what would become a 2.2 million sq. ft. manufacturing facility built on 2,000 acres of Medina River ranchland. Its network of 21 suppliers occupies an equal amount of building space – none of which existed a decade ago.
Today, according to Toyota, the company’s total direct investment in the plant has reached $2.1 billion, with $1.5 billion or more invested by the supplier community for a total of more of $3.6 billion. The plant now employs more than 2,900 people, and on-site suppliers account for another 2,800 jobs, putting campus employment at more than 5,700. Officials say Toyota’s presence in San Antonio accounts for about 18,000 indirect jobs. The company has given out $13.5 million in philanthropic funds in San Antonio and South Texas.
Full-size Tundra pick-up trucks began rolling off the TMMTX assembly line in late 2006 as officials increased pre-construction production targets from 150,000 to 200,000 units annually.
The 2008 recession led to reduced production and seemingly put the company’s 1,850 workers at risk, but the decision to end Tundra production in Princeton, Indiana and consolidate big truck production in San Antonio averted any layoffs. The assembly line was shut down for three months, but Toyota held on to its workforce, using the down time to intensify training while dealers sold excess inventory.
More good news came at the end of 2008 when Toyota and General Motors decided to end a joint operating agreement at a shared Northern California plant, bringing production of the mid-sized Tacoma pick-up truck and another 1,000 manufacturing jobs here. Tacoma production was underway by July 2010, and together with Tundra production made San Antonio the center of Toyota pick-up truck production in the United States.
For all those numbers, Toyota’s Southside site selection was equally big for the city. The decision upended the conventional wisdom driving most of the civic and business establishment at the time that saw little opportunity marketing the Southside. The closure of Kelly Air Force Base and Brooks Air Force Base had eliminated thousands of the community’s best-paying jobs, and the Southside included some of the city’s poorest zip codes and highest high school dropout rates.
Along with its surprise site selection, Toyota also spurred local entrepreneurship in the minority business community by inviting several qualified individuals into the Tier One supplier community. Some in the business community grumbled about favoritism, but Toyota saw it differently as it established a beachhead in on one of America’s most Latino cities.
“Toyota wanted to support local entrepreneurs and minority business growth, so we helped locals to partner up with known suppliers, learn the business, and eventually go out on their own,” said Mario Lozoya, Toyota Texas’ director of government relations and external affairs. “It’s good for community development and good for local job creation.”
Lozoya, a Rio Grande Valley native who retired after 23 years with the U.S. Marines, has been with Toyota since the plant opened.
“The company has always hired a lot of transitioning military men and women,” he said. “We think the skills they bring are a real plus.”
The local, minority-businessmen and their closely held companies, none of which seem to maintain company websites, include:
- Heriberto “Berto” Guerra Jr., chairman and CEO of Avanzar Interior Technologies, which manufactures vehicle seating. Guerra also is the current chairman of the board of SAWS.
- San Antonio attorney Frank Herrera, who owns Hero Assemblers, which assembles wheel and tire packages on Toyota trucks.
- Max Navarro, owner of Vutex, which assembles parts kits for conveyance to the assembly line.
- Fernando Reyes, owner of Reyes Automotive Group, which produces injection molding and carpeting for Toyota.
All four share inner city roots and a record of contributing time and money to improve education outcomes in San Antonio, including raising hundreds of thousands of dollars for scholarships while running for or serving as Rey Feo.
Still, no single manufacturing entity can serve as a quick fix for such intractable problems, but the presence of Toyota has sparked interest and confidence in the Southside’s potential and its future. The establishment of Texas A&M-San Antonio is the most visible demonstration of the Southside working to shed its underperforming record and image. The long-established Palo Alto College in the Alamo Colleges system now serves as a feeder campus to students seeking a four-year degree close to home. Both TAMUSA and Palo Alto will be examined more closely in the series later this week.
Toyota’s commitment to improving education initiatives includes its partnership with the Alamo Colleges and the March launch of the Toyota Advanced Manufacturing Technician (AMT) program.
The two-year associate degree “will produce the world-class technicians to fill the gap (in the manufacturing economy),” said Federico Zaragoza, vice-chancellor of Economic and Workforce Development at Alamo Colleges during the March press conference.
Students receive hands-on technical training and experience in the AMT program, allowing them to bypass several years of on-the-job training. All this while getting paid to work at the plant, eliminating the need for most student loans.
The economic transformation is also sparking newfound pride.
“We see employees who were new and uncertain seven years who now are confident and moving into supervisory positions,” Lozoya said. “I hear stories of our employees sending their children to college, something they couldn’t do before. I hear stories about them buying houses, and traveling and taking vacations they never thought possible. I’ve seen the direct economic impact on the Southside.
“We’ve seen the local school district takes great stride, too, as they adjust to the needs of TMMTX,” Lozoya added. “People here take great pride that they are the only ones in the world who build the Tundra.”
How Toyota came to choose San Antonio and the Southside is a story for another day. There are competing versions of the story, with some saying Toyota chose a very lucky San Antonio, while others say that San Antonio’s growing global outlook and carefully cultivated friendship with its Japanese Sister City of Kumamoto positioned the city to make the most of the opportunity. Having watched this story unfold since the company’s exploratory visits were a closely guarded secret, I’d say both versions are true. In the end, what matters is that Toyota proved to be a game changer, for the Southside, for all of San Antonio, and for a more globally competitive Texas.
Today, San Antonio’s Toyota manufacturing plant runs at full tilt, producing more than 200,000 trucks annually, even requiring Toyota to turn to its Mexican production facilities to augment production. That has helped feed speculation that rising demand in a growing economy coupled with the plant’s ample room for expansion could lead to even greater growth in the coming years.
“The fact is right now we can’t meet demand and we are trying to find ways to do so within our realm of capacity,’ said Lozoya. “but any decision to expand our facility here or anywhere else would come from headquarters in Japan.”