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State and local officials joined corporate and regional economic development leaders wielding shovels to break ground Monday on the $400 million AW Texas plant in Cibolo.
Cibolo City Manager Robert Herrera welcomed Gov. Greg Abbott, County Judge Kyle Kutscher, Cibolo Mayor Stosh Boyle, and Aisin AW leadership, among others, to the site for the new plant, which is one contributor to a record-breaking billion dollars in new foreign direct investment in the region announced this year.
The governor called the event a door-opener for the area and for the state.
“This is a great day for Cibolo, Texas,” Abbott said. “This is something that puts Guadalupe County and Cibolo on the map. What you will see in the coming years and coming decades is this was the beginning of a chapter that will lead to chapter after chapter of a great book about this entire region. You’ll look back and tell your kids and grandkids, ‘I was there on the day the ground was broken on a project that led to all this massive development around the entire region.’”
The groundbreaking on the 159-acre property comes less than two months after the Japan-based manufacturer of vehicle transmissions announced that it had chosen Cibolo for its third plant in the United States. That news came the same day Toyota held a press conference announcing it would invest $391 million to expand its San Antonio plant.
Soon after, on Oct. 1, Continental Structural Plastics, a Teijin Group company that produces composite vehicle components, broke ground for a $700 million manufacturing facility in nearby Seguin that will open in 2021.
Aisin AW is a major supplier of automatic transmissions for Toyota that also owns plants in Michigan and North Carolina. The Cibolo plant is expected to begin production in September 2021 and bring 900 jobs to the region by the end of 2023.
Chris Nielsen, executive vice president of product support and chief quality officer at Toyota North America, said Toyota is thrilled to see Aisin AW continue to grow in the U.S. and in Texas.
“Since their start in 1969, Aisin AW has become a powerhouse in the automotive transmission market,” Nielsen said. “Over the years, Aisin AW has been a crucial partner for Toyota providing more than 2 million transmissions since our relationship began.”
Aisin AW President Kazuhisa Ozaki said the new plant is necessary for introducing local production in North America. The plant will produce automatic transmissions for Toyota’s trucks and hybrids built in San Antonio.
Toyota’s choice of San Antonio to invest millions in plant upgrades is what opened doors for other suppliers to move into the region, said Jenna Saucedo Herrera, president and CEO of the San Antonio Economic Development Foundation.
“The closer these operations get to the plant, the lower the cost per vehicle, so it makes it more economical, more sustainable,” she said. “Aisin is a globally competitive manufacturer in their own right. Their decision to relocate within our region, here in Cibolo, is going to send a strong signal to other manufacturers looking to be competitive in North America. This is a big deal for us.”
AW Texas purchased the land, located in a reinvestment zone designated by the Cibolo City Council, from the Guadalupe Valley Development Corporation (GVDC), which is part of the local energy cooperative GVEC.
Darren Schauer, general manager and CEO of GVEC, said the board of directors envisioned such a partnership when it invested in the land in 2013.
“It was our vision that if we found the right partner to move into this location that we could then attract the necessary infrastructure to serve the needs of this new partner … and this entire I-10 corridor,” Schauer said. “We could not have found a better partner than Aisin AW to fulfill that vision and help us be where we are today.”
Both the City of Cibolo and Guadalupe County also partnered, for the first time, in attracting Aisin AW to the area. In July, City and County leaders approved an economic development incentive package for AW Texas that included tax abatements and infrastructure improvements as well as a Chapter 380 Economic Development Agreement.
The 20-year agreement with the City of Cibolo is valued at $9.6 million while the County’s agreement is worth $13 million.
The project is expected to bring a $36 million payroll to Cibolo and deliver an annual net benefit of $3.7 million to the city and $4.5 million to the county in sales and property taxes.
For a company the size of Aisin AW to come to a city the size of Cibolo is transformative for the region and the state, said Robert Allen, president and CEO of the Texas Economic Development Corporation.
Founded in 1969 in Aichi, Japan, Aisin AW is a $234 million subsidiary of Aisin Group and has 35,000 employees. Cibolo is a 32-square-mile town of about 31,000.
“This is a concrete example of a successful pursuit,” Allen said. “We think this is just the beginning of a very long and very fruitful relationship. It’s not the end, it’s the beginning.”