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Borderlands: Asian firm to build $44M EV motor core factory in Mexico

South Korea-based Posco International will build an EV motor core plant in the Mexican city of Ramos Arizpe, about 175 miles from the US-Mexico border. Pictured is the commercial border crossing in Laredo, Texas. (Photo: Jim Allen/FreightWaves)

Borderlands is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: Asian firm to build $44M EV motor core factory in Mexico; Mexico requests USMCA resolution panel to settle dispute; East West manufacturing expands into Texas and Mexico; and CBP seizes fake AirPods, Nintendo consoles in Houston.

Asian firm to build $44M EV motor core factory in Mexico

Aiming for the growing U.S. electric vehicle (EV) market, South Korea-based Posco International will build a $43.6 million plant in Mexico to produce EV motor cores.

The Posco facility will be located in Ramos Arizpe, Mexico, one of the country’s largest automotive clusters, with plants from General Motors, Fiat Group, Chrysler, Daimler and Freightliner in the area.

“We decided to make this investment to target North America, the largest market for electric vehicles, and strategically prepare for the U.S. government’s green mobility policy,” Posco International officials said in a statement.

Construction of the plant is scheduled to begin in June, and operations could start in 2023.

The Biden administration recently released a federal strategy to build 500,000 charging stations for electric vehicles across the U.S., while bringing down the cost of electric vehicles, with the goal of transforming the U.S. auto industry.

Watch: On FreightWaves’ Transmission show, Ellen Hughes-Cromwick from Third Way discusses the impact of the Biden administration’s infrastructure bill on electric vehicle production in the U.S.

“We will use our Mexican production subsidiary as an outpost for the production of electric vehicle components. By combining our years of overseas investment experience, Posco’s technological competitiveness and material capabilities, we will play a key role in realizing the group’s carbon neutrality goal,” Posco officials said.

Posco International is South Korea’s largest trading company and a subsidiary of steel making giant Posco, which recently announced plans to extend its business areas to hydrogen fuel cells, advanced materials and renewable energy. 

Posco currently has a steel factory in the Mexican city of Altamira, along the Atlantic coast. The factory supplies automotive steel to automobile makers in Mexico — including Volkswagen, GM, Kia Motors and Chrysler.

Posco International recently won a $122 million contract to supply parts to California-based automaker Rivian for its electric vehicles.

Posco Chemicals, another subsidiary of Posco, recently announced a joint venture with GM to build a factory in North America by 2024 to process key battery materials used in GM’s Ultium electric vehicle platform. The location for that plant has not been announced.

Mexico requests USMCA resolution panel to settle dispute

Mexico requested the establishment of a dispute settlement panel to resolve differences with the U.S. over automotive sector rules-of-origin requirements established by the United States-Mexico-Canada Agreement (USMCA) trade pact.

The dispute centers on how parts and components not originating in North America are treated under the rules.

Mexican authorities said U.S. officials are improperly interpreting stricter regional content rules under the pact. The USMCA raised the regional content requirement to 75% of a vehicle’s value or components. The requirement was 62.5% under the now replaced North American Free Trade Agreement.

“The United States imposes requirements on automotive producers that are incompatible with the USMCA,” Tatiana Clouthier, Mexico’s economy minister, said in a statement. “Mexico believes that the decision of a panel will provide certainty to the automotive industry for the benefit of the competitiveness of the region.”

The rules-of-origin requirements allow vehicles manufactured in North America to receive duty-free treatment under the USMCA.

A dispute panel will take about 30 days to form under the USMCA’s dispute settlement system and could file a final report within 180 days.

East West manufacturing expands into Texas and Mexico

Atlanta-based East West Manufacturing LLC has acquired the operations of Compass Electronics Solutions in El Paso, Texas, and Juarez, Mexico. 

The acquisition expands East West’s North American design, manufacturing and distribution capabilities, according to a release.

Financial terms of the deal were not disclosed.

Founded in 2001, East West offers customers onshore, nearshore and offshore design, engineering, manufacturing and distribution capabilities. St. Louis-based Compass Electronics Solutions primarily operates in the printed circuit boards industry.

CBP seizes fake AirPods, Nintendo consoles in Houston

U.S. Customs and Border Protection (CBP) officers working at Port Houston seized a shipment of knock-off Apple AirPods and Nintendo video game consoles in December.

Officers selected a shipment of goods arriving from China for inspection, discovering packages of 50,000 Apple AirPods and over 900 Nintendo game consoles. After examining the products, officers noted the goods appeared to be illegitimate and sent them to import specialists for review. 

The shipment of counterfeit electronics has a street value of $2.6 million, CBP officials said.

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Noi Mahoney

Noi Mahoney is a Texas-based journalist who covers cross-border trade, logistics and supply chains for FreightWaves. He graduated from the University of Texas at Austin with a degree in English in 1998. Mahoney has more than 20 years experience as a journalist, working for newspapers in Florida, Maryland and Texas. Contact [email protected]