To gain a better understanding on trade and investment between Texas and Mexico, we spoke with Board Member Armando Tamez, CEO of Nemak, a global supplier in the auto industry. He discussed the how open trade enhances business development and potential economic impact from COVID-19.
Why did you decide to join the leadership of the Mission-Foods Texas-Mexico Center?
For me, it was a pleasure to have been invited by Chairman Juan Gonzalez Moreno to serve as an Executive Board Member of the SMU Mission Foods Texas-Mexico Center and that way support research and academic activities focused on generating actions that will benefit both the University’s student community as well as strengthening the close ties between Texas and Mexico.
Likewise, for me it represents a very valuable opportunity to contribute to an institution as prestigious as Southern Methodist University and to interact with other leaders and contribute my support for the Center’s activities.
How does the new USMCA agreement benefit trade and businesses, including yours, in North America?
Commercial treaties, which foster economic integration of supply chains across regions, like USMCA in North America, open opportunities for growth, which benefit a lot of different economic sectors in the region through job creation, activation of production chains and secondary services. They also promote talent development, since companies become an extension for learning for education institutions.
Without a doubt, open trade creates a business framework that enhances the development of many businesses of different sizes and from different industries. At the same time, they facilitate technology exchange and better business practices that benefit all participants and the final consumer.
The creation of the North American Free Trade Agreement made business grow exponentially for all of its members, which has generated jobs and important benefits for the final consumer. I consider that the North American commercial block is the most important one on the planet.
Particularly for Nemak, the company I head, which is a global supplier of the auto industry, these agreements allow us to continue to serve our customers in a highly efficient way and with innovative technological solutions.
American auto manufacturers, part of our most important customers, operate their business and product development strategies with a regional focus and their operations are highly integrated.
As we enter a time of economic uncertainty, what impact do you think COVID-19 will have on the global economy as well as Texas and Mexico?
The COVID-19 pandemic will surely have an unprecedented impact in all the world economy and its recovery will be gradual. One of the main impacts will be for those businesses which cannot access the necessary financial liquidity in order to keep their operations throughout the contingency.
It’s very likely that many businesses won’t be able to go on, a situation which will generate even more impact on local and regional economies, since it will mean an important decrease of commercial activity and job losses.
All of this puts us in a situation of no economic growth or even recession, which will require of a close collaboration between the private sector and governments in order to reverse these scenarios.
Tell us about your experience leading Nemak. What are some of the benefits and challenges you’ve encountered when integrating your business on both sides of the border?
Like I mentioned, Nemak is a worldwide supplier for the auto industry. Since it started, its growth has been closely tied to the integration of American automotive supply chains throughout all of North America.
The integration and complementary of the US and Mexican markets allowed us to build a highly competitive offer, attractive to our clients, which gave us solid and profitable growth given its access to such an important market.
This business framework also helped the Exchange and development of technology, which strengthened our capacity to develop technological and innovative solutions to develop lighter materials and to have a more sustainable auto industry.
All of this has challenged us to focus on exceeding our customers’ expectations and to work constantly in order to have a solid and highly attractive value proposition.
Is there anything you would like to add that may help our audience understand more about what it is like for business owners on both sides of the border?
Integrating businesses on both sides of the border represents a relevant growth potential. It’s a complex challenge that demands a lot of preparation and dedication in order for it to be successful.
For this, it is key to focus on knowing your clients profoundly and how to not only meet their expectations, but exceed them. Likewise, attracting and developing the best talent, which will allow you to capitalize opportunities and enable medium and long-term growth strategies. You have to break some paradigms, be more flexible and very quick in decision-making.
It is also very important to take advantage of the cultural similarities between Texas and Mexico, such as work culture and the importance of family, which will allow you to strengthen ties with communities beyond economic aspects.