Mexico to Expand Texas Incubator Effort

The Washington Post
Tuesday , October 17, 2000

Mexico to Expand Texas Incubator Effort

By Mary Jordan
Washington Post Foreign Service

DALLAS –– Inside a brick warehouse in Dallas, Mexican president-elect Vicente Fox stores many hopes.

Three years ago Fox, then a state governor, flew here and personally selected the building in the city’s busy Regal Row district, where Mexican entrepreneurs could sell their vases, boots and furniture directly to American customers. With the state paying most of the $3,600 monthly rent and for a bilingual staff to help them find customers, more than 30 small businesses have flourished, racking up millions of dollars in sales.

As soon as businesses are successful enough, they move out to their own storefront, making room for the next newcomer from Mexico. Fox, who has returned many times to check on the “Texas warehouse incubator” project, is now preparing to vastly expand it.

Fox doesn’t take office until Dec. 1, yet already his team has been scouting around Dallas this week for a far bigger government launch pad for small-business owners from every Mexican state–expanding Gov. Fox’s state program into President Fox’s national program.

By offering money and encouragement to Mexican entrepreneurs wanting to start businesses in America, Fox above all is aiming at his signature goal: making the border irrelevant and outdated. The continuous expansion of commercial links, he argues, will ultimately overwhelm barbed-wire divisions. Fox is so intent on ignoring the border that he frequently refers to himself as the leader of 118 million Mexicans–meaning the 100 million who live in Mexico and the 18 million who live in the United States.

“Mexicans in Texas are really surprised that a president in Mexico realizes they exist,” said Maria Rosa Suarez, the warehouse administrator. “This is new.”

In addition to the financial help for small Mexican businesses in the United States, Fox plans to set up an office in Los Pinos, the presidential office, solely devoted to the needs of Mexicans abroad, such as getting health insurance coverage in San Diego or more efficient banking services in Chicago. If he is able to deliver on his promises, Fox will reach out to Mexicans in America in a way none of his predecessors have.

Fox also favors an absentee ballot plan to make it easier for Mexican citizens living in the United States to vote in Mexican elections. This had been strongly resisted by the government until now, and it forced Mexicans to make expensive trips back into the country if they wanted to vote.

“In the past, Mexicans in the U.S. lived in an in-between world. Now Fox is saying, ‘These are my people,’ ” said Juan Hernandez, a top Fox adviser and director of the Center for U.S.-Mexico Affairs at the University of Texas.

And Fox has a lot of people up North. In Dallas alone, there are 443,000 Mexicans–250,000 of them from Fox’s relatively small state in central Mexico.

Karla Pineda Castro is one of the Mexicans whom Fox has visited in Dallas. She said that without the help of the warehouse her small-craft business wouldn’t have made it in the United States. She has decorated her niche in the Dallas warehouse to look like a fancy boutique, brimming with etched glass, mirrors framed in colorful tiles, and hand-painted flower vases. Her latest success, she said proudly, is a new Neiman Marcus account for her decorative glassware.

She said attracting American customers from Mexico was next to impossible, even with international courier services and the Internet. “If you don’t have a physical presence in the United States, nobody trusts you,” Pineda said. “They want a U.S. telephone number and a place where they can return things if they are not happy.”

For Fox, Texas is a logical place to start his peaceful revolution against the border. Not only does Texas have America’s longest state border with Mexico–more than 1,200 miles–but, most recently under the governorship of George W. Bush, it is viewed by Mexicans as the most hospitable of border states. Texas, once a part of Mexico, has long-established cultural links to Mexico, and with its considerable Mexican population and ever-growing cross-border trade, many Texans feel more in sync with their southern neighbors than with, say, New Yorkers.

So while Fox runs into opposition to his vision of a more united North America in Washington, he finds much less in Texas, where common ground thinking already prevails.

Hernandez said there is so much traffic back and forth, and so many family and business ties that span the frontier, people think, “Border? What border?”

“The border becomes a reality the closer you get to Washington,” he said.

Fernando Soto said that, thanks to the warehouse, the border is no longer a barrier to his business. Two years ago, he set up his pillow and bedding sales office in the warehouse, while his brother ran the factory producing the products back in Mexico. It took seven long months before he landed his first customer. Without the warehouse’s subsidized rent and nurturing atmosphere, he said, it would have been downright scary to learn everything he needed to know, including Yankee pillow tastes and how to cope with the Internal Revenue Service.

“I didn’t even know how to get a phone line or a driver’s license or an accountant,” said Soto, who, like many in the warehouse, came to Dallas with little more than a $2,500 business visa.

Pillow color was one area, Soto learned, where the tastes of Mexicans diverge from those of their northern neighbors. “In Mexico, people like decorative pillows with brilliant colors, maybe one that is orange with purple and a strong yellow,” said Jose Soto, Fernando’s brother who runs the factory back home in Leon, in Guanajuato state. “In the United States, people like beige pillows and black pillows! You can’t imagine that a black pillow would sell in Mexico.”

But the factory is cranking out what the American customers want, and now Soto sells in bulk to customers such as J.C. Penney outlet stores and is expecting to do $700,000 in sales this year. Twenty new employees have been hired to work at the family’s factory in Mexico to keep up with the U.S. demand, bringing the total to 68.

“It has been hard, but it would have been a lot harder without the help,” Soto said.

The help the Mexican government lends to its citizens abroad also is aimed at creating jobs and prosperity back home. Every year, Mexicans in the United States send an estimated $6 billion to $7 billion back to Mexico, a figure that rivals the country’s income from the tourist industry. In the future, Fox hopes to see that figure soar.

The Soto family business in Dallas has brought a little more prosperity back home to Leon. The family plans to hire more workers next year, and Fernando Soto said four of his friends–owners of businesses selling candy, bathroom rugs, baby accessories and hammocks in Mexico–are lining up to follow him north.

Jose Natera, director of the warehouse, said this past weekend that he was busy inspecting several buildings with about 120,000 square feet of space for the new warehouse. He said it is to open late this year or early next year.

Part of Fox’s plan for his first 100 days in office, the Texas incubator project is attracting a lot of interest among Mexican business leaders who want to move to Dallas and will have to interview with Natera to see whether they qualify in terms of size and track record for delivery and quality.

For Texas residents such as Billy Baird, a home-furnishings consultant in Dallas since 1972, the stores at the warehouse have made it easier to find inexpensive Mexican handcrafts. For years, Baird has been making trips into Mexico to buy tables and wrought iron decorations for American customers. Now he can drive a few minutes from the World Trade Center, pull in by the Fairfield Inn hotel, and see all kinds of home decorations from Mexico.

“This warehouse really helps market Mexico,” he said.

© 2000 The Washington Post

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