Samsung to Build Major TV Tube Plant in Tijuana : Trade: The South Korean consumer electronics giant’s planned $100-million facility is a response to NAFTA. It will employ more than 1,000.
Samsung, the South Korean consumer electronics giant, will build a $100-million plant in Tijuana to make television picture tubes, The Times has learned, the biggest example yet of how foreign manufacturers are adapting to the new playing field created by the North American Free Trade Agreement.
The new plant would also be a vote of confidence in the business climate in Tijuana, which less than a month ago was the scene of the assassination of Mexican presidential candidate Luis Donaldo Colosio. The plant, expected to open early next year, is expected to employ more than 1,000 workers.
Neil Whiteley-Ross, vice president of the San Diego Economic Development Corp., said the Samsung plant would represent “a huge benefit for the San Diego-Tijuana community. . . . Suppliers to that facility will add hundreds if not thousands of jobs to both sides of the border.”
Currently, Samsung operates a huge television assembly plant in Tijuana but, like many other Asian manufacturers with plants here, imports most of the components from Asia. Now, Samsung and other foreign-based companies have decided that they must increase local supplies so their goods can shipped duty-free under NAFTA guidelines.
A spokesman for Tijuana Mayor Hector Osuna confirmed that Samsung officials will unveil plans for a 65-acre manufacturing complex in a meeting at the mayor’s office next week. The plant is to be built in the El Florido business park, about eight miles southeast of downtown Tijuana.
Officials at Samtron, the Samsung unit based in Compton that is heading the site selection, did not return telephone calls Friday. Officials at the El Florido industrial park also did not return telephone calls.
But San Diego city officials who asked not to be identified confirmed that Samsung had notified the city of its intention to build a plant in Tijuana. Real estate sources also confirmed the deal.
Provisions of the North American Free Trade Agreement call for the abolition of most tariffs on goods produced and sold within the U.S.-Canada-Mexico trade region over the next 15 years. But those goods have to satisfy “rules of origin” that specify a minimum percentage of a product’s value consist of raw material and labor originating within the trade zone.
The rules have caused an enormous amount of confusion and apprehension among Asian manufacturers of consumer electronics, many of which assemble products along the border in Mexico with components shipped from the Far East.
Although rules of origin vary greatly from product to product, the NAFTA guidelines are specific for television manufacturers: They require that any television over 14 inches in size use a picture tube made in North America, according to the U.S. Department of Commerce.
The rule puts Korean television manufacturers such as Samsung, Gold Star and Daiwoo at a disadvantage with Japanese competitors that already make picture tubes in North America. Sony and Matsushita, for example, make picture tubes at huge plants in San Diego and Tijuana, respectively.
Sean Doyle, director of international real estate for Cushman Realty Corp. in San Diego, said he is being “inundated” with inquiries from Asian consumer manufacturers seeking to expand supply sources to include more U.S. and Mexican companies to comply with NAFTA.
“Japanese, Korean and Taiwanese suppliers are refocusing their investment strategies to be closer to Latin American markets,” Doyle said. “There was a wait-and-see attitude as to the overall impact that NAFTA would have. . . . Now, the Asian communities are realizing they can participate on an even playing field.”
