San Antonio shows resiliency, with cross-border manufacturing and high-tech aspirations

When Toyota built a factory in San Antonio in 2003, the automaker set up a nexus for the growing manufacturing trade between Texas and Mexico. On a visit to the facility, Logan, accompanied by Dallas Fed San Antonio Branch Director Rosa Santana, saw the Tundra and Sequoia assembly lines. The lines bring together parts from nearly two dozen suppliers located in Texas, other parts of the U.S. and Mexico. The automaker has integrated its suppliers’ facilities on the same grounds, and in some cases, under the same roof, and still, Toyota’s supply chain reaches across the border.

Toyota has invested $3.9 billion in its San Antonio operations so far, where it employs 2,660 workers. It’s a boon for the region. But there are also expectations that the factory be able to hire, which places the onus on local leadership to commit to workforce development. Demand for skilled labor continues to rise, and it’s not just a manufacturing concern, but an issue for the overall San Antonio economy. There is a growing need to develop the regional workforce to meet the skills businesses are looking for.

The University of Texas at San Antonio (UTSA) President Taylor Eighmy considers the school a key part of San Antonio’s workforce development, he told Logan. That’s a reason for the university’s move to establish a center that combines the study of artificial intelligence, data science and cybersecurity, a rare combination in academia. The vision for UTSA, which achieved Carnegie top-tier research status in 2021, is to establish itself as a national collaboration center for AI, partnering with the regional economy that includes the largest defense ecosystem outside of Washington, D.C., with Joint Base San Antonio, the nation’s largest joint base, and a range of support businesses.

Workforce development is critical to the region. As Logan heard from community leaders, the local labor market is bifurcated between high-skilled and low-skilled workers, and employers struggle to hire workers with the necessary technical or specialized expertise. To that end, UTSA is intentional about classroom-to-career curriculum, working to offer students opportunities to learn skills and put them into practice with jobs or internships.

Photo: UTSA

As Logan met with business leaders from a range of industries, some common themes emerged about the state of the region’s economy: strength and resiliency. That is, the San Antonio economy has been resilient, with solid growth since her visit in 2022, but there is some uncertainty about the outlook for 2024.

One local bank executive told Logan when he asks people how they feel about their businesses, the answer is good, but cautious about the outlook. She heard similar sentiments from an energy executive, who had a better year than expected in 2023, but this year, the industry is looking at wage increases and continued uncertainty around the globe. Business leaders throughout the trip described the region’s economy as heading back to prepandemic growth rates.

The American Economic Association held its annual meeting in San Antonio, giving Logan the opportunity to contribute to a panel discussion on monetary policy and to connect with economists from around the world. Welcoming members of the Committee on the Status of Women in the Economics Profession to a special event at the San Antonio Branch was particularly meaningful for Logan. She said:

Throughout my career, there have been too many rooms where I’ve been one of only a handful of women—if not the only one. While we’ve seen a steady rise of women joining the fields of economics and finance, there is still work to be done. As we begin the new year, let’s make it a priority to discuss ways we can change the structural barriers that make advancement in these fields so challenging.