A new notch in central Mexico’s automotive belt rises in the central state of Guanajuato amid irrigated crops, multiplying industrial parks – and deadly gangland warfare.
By year’s end, Toyota’s assembly plant in Apaseo El Grande, a rapidly transforming township of farmers and factory laborers, will begin producing some 100,000 Tacoma pickup trucks a year, according to industry reports, with many of them for shipment across the Rio Grande and through Texas.
Toyota currently produces the Tacoma in San Antonio and in Tijuana, the Mexican city bordering San Diego. A spokesman said Toyota declined requests to comment about the plant and the company’s plans.
With any luck, and perhaps a prayer, the violence that has been racking the state for several years now also will have slackened, with the rival gangs subdued and the corruption that nurtures them corralled.
“Imagine a plant of this size operating amid so much violence. That’s not going to work,” says Francisco Rodríguez, 59, who grows alfalfa not far from the Toyota plant. “The government has to get this under control.”
The cradle of Mexico’s independence from Spain two centuries ago, Guanajuato today stands as an emblem of both the country’s promise and its peril as leftist-nationalist President Andrés Manuel López Obrador takes the helm for a six-year term.
Conservative Guanajuato was the only of Mexico’s 32 states that López Obrador did not win in last July’s election. Now, as he struggles to both maintain industrial-driven growth and bring criminal gangs to heel, few corners of the country have more at stake in the outcome.
Exports to the U.S. of vehicles and auto parts turbo-charge the state’s economy – it has grown by more than 4 percent annually this decade, about twice the national rate.
Officials say Guanajuato, which is Mexico’s sixth-most important state economically, will lead the country in automotive production by next year. The state produced about a fifth of the nearly 4 million cars and light trucks foreign automakers produced in Mexico in 2018.
But gangland killings and other violent crimes have spiked as well, claiming more than 2,300 lives last year and making Guanajuato the deadliest state of Mexico. In all, a record 33,000 people nationwide died violently last year, most of them at the hands of organized crime, officials say.
Though nearly 600 miles from the Rio Grande at Laredo, the fates of Apaseo El Grande and Guanajuato’s long have been meshed with that of Texas.
Like other nearby factories, the Toyota plant will use energy made possible by natural gas from the Eagle Ford field of south Texas, shipped through a recently completed pipeline that terminates a few miles away.
Many of the vehicles Toyota will build here — like those made by Honda, Mazda and BMW in nearby plants — will be shipped to U.S. and Canadian customers on trains crossing the border at Laredo and other Texas cities.
San Miguel de Allende, the colonial jewel that’s at least a part-time home for some 15,000 foreigners, including many Texans, huddles in low mountains scarcely an hour away. In turn, many migrants from Guanajuato through recent decades have made their homes in Texas.
The Toyota plant is certain to make the bonds tighter still.
“There are going to be a lot of links between Apaseo and San Antonio,” says Alejandro Garcia, a municipal economic development official in Apaseo El Grande.
Gangs tapping pipelines
Criminal bands traffic narcotics and pillage trains carrying locally made auto parts and cargo from Asia passing through from the Pacific port of Lázaro Cárdenas.
But officials blame most of the killing on the rivalries between gangs that tap pipelines to steal gasoline and other distillates for sale on the black market. Mexican officials estimate that some $3.7 billion a year worth of fuel is stolen nationwide.
“We know that our murder problem derives from the fuel theft,” Gov. Diego Rodríguez, who took office last fall, said in a recent video message.
With a major refinery in the city of Salamanca and some 700 pipelines of every variety crisscrossing the state, Guanajuato has suffered an outsize share of it. Police and soldiers last year discovered more than 1,000 pipeline taps, making Guanajuato one of the top three most affected by the crime.
López Obrador launched a nationwide campaign against the fuel thieves, known as huachicoleros, shortly after taking office three months ago. Soldiers have seized refineries nationwide; patrols of pipelines have been increased; the bank accounts of suspects have been frozen.
In Guanajuato and elsewhere, the bloodshed has spiked.
A bomb was placed at one of the main gates of the Salamanca refinery in late January, accompanied by a message purportedly written by one of the warring gang bosses calling on López Obrador to withdraw the army and other federal forces from the state.
“If not, I am going to start killing innocent people so you see this is not a game,” the message read, The accused gangster later claimed he had not placed the bomb nor issued the threat. López Obrador shrugged off the incident and said the government would not alter its policy.
The U.S. State Department last fall warned that visitors should “exercise increased caution” when visiting Guanajuato, but noted that most of the violence occurs in southern zones of the state, that include Apaseo El Grande. Guanajuato isn’t among the five states, including neighboring Michoacan, that U.S. officials warn should not be visited.
The township’s police chief was assassinated, gangland style, two years ago and another in 2014. The mayoral candidate of Lopez Obrador’s party was gunned down last spring in a neighboring township. His wife won the seat in his place.
Meanwhile, Lopez Obrador’s campaign against fuel theft “has taken jobs from a lot of people who are looking for other sources of income,” said Marco Ramón, president of Amistad Industrial Developers, which operates industrial parks in Apaseo El Grande sheltering Japanese and other foreign auto component makers.
“This is something that should be temporary,” Ramón, whose company is headquartered on the central Texas border and operates across northern Mexico, said of the violence. “It’s a shame to say it, but we are used to it.”
Others, including the Americans and other foreigners who have made San Miguel de Allende their home, face getting used to it as well. A tourism destination for more than seven decades, the city of 70,000 is expecting 2 million visitors this year, many of them deep-pocketed people drawn by its ranking as one of the premier destinations in the world.
“I’m convinced that so much of it is a reaction to the money that has come into town,” David Bossman, a retired New York City teacher and 20-year resident said of San Miguel de Allende’s growing crime problem. “This town has gone from a quiet bohemian town to a major international destination.”
Bossman edits a Facebook page – “More Security in San Miguel de Allende” – that monitors the crime situation for some 11,000 followers. In addition to more infrequent murders, the page documents highway assaults, home invasions and street muggings.
“We have had a significant amount of assaults,” Bossman said, referring to a rising number of armed highway attacks on residents returning to San Miguel from shopping trips to the nearby city of Celaya. “A lot of it was a growing epidemic of small gangs.”
Hundreds of factories
Toyota’s will be the fourth assembly plant to operate along a 70-mile stretch of four lane highway in Guanajuato. Each company brought with them their own suppliers, totaling hundreds of factories employing tens of thousands of people, according to state officials.
The state’s auto boom began in 1985 when General Motors began producing SUVs and light trucks in the town of Silao. Honda opened its factory in Celaya and Mazda another in nearby Salamanca in early 2014. In addition, Volkswagen builds motors in Silao and Ford makes transmissions near the city of Irapuato.
Combined with large Japanese and German assembly plants in neighboring Aguascalientes and San Luis Potosí state, analysts project that central Mexico will produce half of Mexico’s cars and light trucks by sometime next year.
Though employment has boomed, wages have remained low. Line workers in some Japanese assembly plants in Guanajuato make little more than $12 a day. Those employed at suppliers’ factories earn even less.
It’s unclear what wages Toyota will pay once the factory starts production.
President Donald Trump’s threat to renegotiate or cancel the North American Free Trade Agreement — which provides duty-free commerce between the U.S., Mexico and Canada — slowed investment in new plants in recent years. Scrapping the trade pact would have meant slapping a 25 percent U.S. import tax on the pickup trucks made in Mexico.
As the first left-leaning president of Mexico in decades, López Obrador’s arrival to office has set some executive stomachs churning anew. But he so far has proved less antagonistic toward business than many feared.
“They were two-and-half years of a lot of doubt, first with Trump’s arrival and then with Lopez Obrador’s,” said Ramon, the industrial park manager. “It was a perfect storm.”
The three country’s leaders signed a new trade pact late last year that looks much like the old one. While the agreement needs to be ratified by each country’s legislators, investors are hitting the gas again, Román said.
Toughened requirements that more auto components be made within North America are drawing more Asian and European companies to Mexico, executives said.
“Mexico is a very important hub for suppliers and assemblers, that’s why we need to be here,” said. Peter Oberparleiter, chief executive of GKN Sinter Metals, a British company that supplies the auto and other industries.
“We are already supplying a lot of parts from Europe and the U.S. and that should end,” he said. “We don’t need to ship many thousands of miles.”
While the ongoing violence in Guanajuato is a concern, Oberparleiter said, “We see Mexico as something that won’t go away.”
The Mazatlan Post