KEY INDUSTRIES

• Automotive and auto-parts
• Electronics
• Cement
• Pharmaceutical

MAIN COMPANIES

ADVANTAGES

• Large automotive cluster
• A well educated, highly skilled labor force
• Good support and service infrastructure
• Good transportation network to Monterrey and the border

DISADVANTAGES

• The automotive industry in the city will attract and hire the best workers raising labor costs for low-tech companies
• Distance from border translates into higher freight costs when compared to border locations
• Not a good place for water intensive industries

Overview

Saltillo and Ramos Arizpe are sister cities in northeast Mexico, just outside of Monterrey. Saltillo-Ramos Arizpe is not the cheapest area to do business, but the area has an excellent labor pool and strong supplier base. It is also under three hours to the border. The area offers excellent opportunities for companies seeking for qualified workers in the electronics, metal-mechanic, automotive and auto-parts industries. The city has a good climate, an excellent education system, high quality of life and is close to the border and other key Mexican cities like Monterrey and Torreon.

The City

POPULATION

The city of Ramos Arizpe has a population of 31,322 individuals, with another 40,000 in the immediate surrounding community. According to the 2,000 census, Saltillo is home to 578,046 inhabitants. The two areas have a combined population of 609,368 people. This population is growing at a 2.14% annual rate, a bit faster than the 1.8% national growth rate.(Source INEGI 2000)

LOCATION

Saltillo, the state capital, is located in the southeastern part of the state of Coahuila, which is the third largest Mexican state after Chihuahua and Sonora. Situated in the northern part of the Mexican territory, the State of Coahuila shares a 318 miles border with the state of Texas in the United States, and borders with Chihuahua and Durango to the west, Zacatecas and San Luis Potosi to the south and Nuevo Leon to the east.

Saltillo is situated 189 miles south of the U.S. border at Laredo, TX, and 53 miles southwest of Monterrey. Ramos Arizpe is an industrial city located 7 miles east of Saltillo on Federal Highway 40. The Saltillo-Ramos Airzpe region sits at 4,905 ft. above sea level. The climate is hot during most of the year, reaching temperatures of over 100° F during the summer.

Saltillo Region: Average Temperature by Season

PROXIMITY TO IMPORTANT U.S. AND MEXICAN DESTINATIONS

INDUSTRY SNAPSHOT

The southeastern part of Coahuila, which includes both Saltillo and Ramos Arizpe, possesses the most solid and diversified export structure of the state. It is a dynamic, entrepreneurial region that houses metal-mechanic, pharmaceutical, chemical and textile industries as well as the largest automobile assembly cluster in Mexico, including GM, Daimler-Chrysler and Fiat. In fact, 8% of all automotive engines in North America are manufactured in Saltillo, and the city produces 24% of total Mexican car production. Close to 460,000 units and 1,000,000 oil engines are manufactured in the city annually.

Many companies have moved into the region as suppliers to these companies and to feed of the skilled labor pool. The principal economic activities in the city breakdown as follows: Manufacturing 46%, Commerce and Services 26% and Construction 13%. In total there are 12 Industrial Parks and 54 maquila plants in the Saltillo Region, of which 30 are located in Ramos Arizpe and 24 in Saltillo.

DEMOGRAPHICS

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EMPLOYMENT CONSIDERATIONS

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UNEMPLOYMENT AND SUB-EMPLOYMENT

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SKILL LEVEL

Saltillo is well known for its excellent work environment, the technical capabilities of its workforce and the technological development and competitiveness of the auto industry. The city’s workforce has also established a solid reputation in the pharmaceutical, and metallurgy industries.

EDUCATION and TRAINING PROGRAMS

The Ramos Arizpe - Saltillo area has a good educational infrastructure for workers and professionals with 16 Universities, 12 Technical Training Institutes, and 11 research centers. Educational institutions in the area have an ongoing relationship with the local industry and shape their educational programs to fit their needs. Short courses and seminars are frequently offered for continuing education. In total, there are 179,200 students in Saltillo, over half of them enrolled in Elementary School. The following table shows the student body by academic level:

About 96.7% of the population over 15 years old is literate, which compares favorably with the 90.5% national literacy rate.

TURNOVER RATES

Turnover rates in the Saltillo Region are among Click Here To Register  

The Operation

WAGE RATES

Wages are the key driver of Mexico’s manufacturing industry. It is, therefore, one of the first and most important topics that any company moving into Mexico will consider. TeamNAFTA touches on the overall wage issues in our Info Center but we have also provided some sample wages for the Saltillo Region below. While we have access to more detailed wage information, we typically present that information in a tailored report addressing a company’s specific labor needs.

Average hourly wages paid in Saltillo-Ramos Arizpe 2003 - 2004
U.S. dollars/hr. includes all mandatory and average optional benefits for this market

Source: Area industry wage studies and interviews with local managers, $11.00 pesos/USD

INDUSTRIAL COSTS dollar @ 11 pesos/USD

*CFE.-June 2004, ** CRE.-June 2004, *** Pemex June 2004

INDUSTRIAL REAL ESTATE

There are twelve Industrial Parks in the Saltillo region; three in Ramos Arizpe and nine in Saltillo:

INDUSTRIAL PARKS IN RAMOS ARIZPE

• Saltillo-Ramos Arizpe
• Santa Maria (DAVISA)
• Amistad Ramos Arizpe

INDUSTRIAL PARKS IN SALTILLO

• Amistad Saltillo Sur
• Amistad Saltillo I
• Amistad Saltillo II
• FINSA Coahuila
• La Angostura
• La Trinidad
• Las Torres
• Santa Fe
• Santa Monica

AVAILABLE SPACE

These parks offer all services necessary for manufacturing including water, electricity, natural gas and fiber optic telephone services. Most land sites for new construction already have these utilities to the lot. A current survey of industrial parks with a variety of site options reveals the following average prices in U.S. dollars per sq. ft.

TRANSPORTATION

Highway Network

Southeastern Coahuila has a modern and integrated highway infrastructure. Most of the road network is comprised of two-lane Federal Highways. In total, there are 88 miles (141.8 km) of two-lane highways, and 19 miles (30.6 km) of four-lane highways. There are four main highways that link the Saltillo to important destinations:

(Source Ministry of Telecommunications and Transport)

The Saltillo region provides with quick access to the central eastern NAFTA corridor and its two branches: the urban and the rural corridors, as well as to the Atlantic corridor via Monterrey.

(Source: NAFINA, North American Forum on Integration)

Rail Transportation

The rail network is well -developed, with railway terminals in the municipalities of Parras, Saltillo and Ramos Arizpe that connect with the National Railway System, providing access to ports, border cities and other important regions in the country, including Acuña, Piedras Negras, Zacatecas, Monterrey, Mexico City and the border city of Nuevo Laredo, Tamaulipas.

Air Transportation

The “Plan de Guadalupe International Airport” is situated in Ramos Arizpe on the Saltillo-Monterrey highway. This airport offers two daily flights to Mexico City, as well as one daily flight to Houston, Texas. This air terminal is equipped with customs and cargo services. In addition, Monterrey’s International Airport is a short 1-hour drive, connecting Saltillo - Ramos Arizpe with destinations around the world.

CUSTOMS

Mexican Customs staffs a permanent facility at the Ramos Arizpe airport, 15 minutes away from Saltillo. Additional customs facilities are located at the border crossing points of Ciudad Acuña and Piedras Negras in Coahuila, Nuevo Laredo in Tamaulipas and the modern Colombia Bridge in the State of Nuevo Leon. Some of the services offered at this customs office include:

Definite imports and exports

INCENTIVES

The government offers incentives in relation to payroll taxes, training programs, and assistance in the procedures for meeting requirements at three levels of government (federal, state, and municipal). Additional incentives can be negotiated, depending on the location of the new project, type of manufacturing activity, and the creation of jobs. The incentives subject to negotiation include: infrastructure works, fees with the State Public Registry, and construction permits.

STATE OF COAHUILA INCENTIVES

Payroll Tax Incentive

For a one year period, those companies that perform below the allowed contamination indexes, that do not require water for their productive process and that generate new jobs will be exempted of paying the 100% of the Payroll Tax that is established in the state of Coahuila.

Training Scholarships Program Incentive

The state of Coahuila offers a special training program for inexperienced workers that last between 30 to 60 days. In this program, the government commits to pay the minimum wage and social security taxes for every worker enrolled in the program, while the company compels to hire at lest 70% of the workers who successfully complete the training program.

Incentives that are Subject to Negotiation

Sectors offering special opportunities: Automotive and Auto parts, Textile and Garment, Aerospace, Milk products and by-products; Mechanical Metallurgy, Iron and Steel, Mining-Metallurgy, Electric-Electronic, Maquiladora, Commerce and Services.

The Support

SUPPORT SERVICE COMPANIES

The Saltillo Region has a good service and support network for the automotive industry. The growth of the maquila sector has also had a positive impact on the construction industry. Service and support is also available from companies in Monterrey, Nuevo Laredo and Laredo, Texas.

The Politics

UNIONS

There are two major labor unions active in the southeast region of Coahuila: the highly centralized Mexican workers Confederation (CTM) with 37,000 local members, and the Revolutinary Confederation of Workers and Farmers (CROC) with 6,000 local members. Other unions with presence include the National confederation of Popular Organizations (CNOP) and the Electrician Workers of Mexico Union (SUTERM), among others.

Management-labor relations in Saltillo-Ramos Arizpe, are characterized by their collaborative approach with management decisions. Unions are generally conservative. Even tough two labor strikes were recorded in 1995 and two more in 1997, there have not been any strikes recently.

POLITICAL INFLUENCES

The Governor of Coahuila, Mr. Enrique Martinez from the center PRI party, supports the industry development and is offering tax and fee incentives in order to attract additional foreign investment . He is implementing programs to diversify the economy of the region and to promote the maquiladora sector.

OTHER COMPANIES