Borderlands: China automaker picks Dallas as hub; VW Mexico agrees to 5.5% pay raise

Borderlands is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: China automaker picks Dallas as distribution hub; agents seize $17M in meth at Texas border; Port Houston volume down 10%; and VW Mexico agrees to 5.5% employee pay raise.  

China automaker picks Dallas as distribution hub

Chinese electric car maker Kandi Technologies Group (NASDAQ GS: KNDI) recently launched sales in the United States with a new headquarters and distribution center in Dallas.

The company is also exploring opportunities for a new North American plant, said Kewa Luo, a spokeswoman for Kandi Technologies Group. 

With its U.S. headquarters in Dallas, Luo noted that locations in Mexico near the U.S.-Mexico border would make sense, but Kandi is very early in the exploration stage, and many regions are being researched.

“Our intention in the U.S. is to be a leader in affordable EVs, so minimizing costs will be important over time.  As sales in the U.S. grow, the 25% tariffs on EVs imported from China will become more of a challenge.  As we look at our roadmap to even greater consumer affordability, manufacturing in North America is a natural alternative to reduce tariff, freight, and other such costs,” Luo said.

Since May 2019, President Donald Trump has applied tariffs of up to 25% on $550 billion worth of imports from China. In return, China has retaliated with equivalent tariffs on U.S. products.

Luo stressed that the company is in the very early stages of exploring options whether to build a new North American factory.

“This initiative is tied to market acceptance of our electric vehicles sales in the U.S.,” Luo said. 

Kandi Technologies’ U.S. subsidiary Kandi America held a virtual launch on Tuesday, introducing two electric car models to the U.S. market from its new North American headquarters in Dallas.

Kandi America said more than 11,000 people registered to watch the launch and 436 preorders have come in for the two newest models, the K27 and the K23, one a compact car and the other the size of a small SUV. 

The Kandi K23 electric car starts at $29,999 and the Kandi K27 at $20,499, before federal tax credits between $2,500 and $7,500 are applied.

The company said it plans to deliver the cars by the end of the year. For now, all of the vehicles will be manufactured in China and shipped to the U.S. through the Port of Los Angeles.

Agents seize $17M in meth at Texas border

U.S. Customs and Border Protection (CBP) at Pharr-Reynosa International Bridge has once again hit it big with another huge load of alleged methamphetamine seized in a tractor-trailer arriving from Mexico.

The incident occurred Wednesday at the bridge’s cargo facility when officers found 875 packages of alleged methamphetamine hidden within the trailer’s roof. The narcotics weighed 887 pounds and it is valued at $17.7 million.

CBP seized the tractor-trailer and narcotics and the case was turned over to Homeland Security Investigations. 

CBP officers found 875 packages of alleged methamphetamine hidden inside the roof of a tractor-trailer on Wednesday. (Photo: CBP)

The incident is the latest in a recent string of large drug busts involving trucks at the U.S.-Mexico border. Since July 15, more than $142 million in narcotics has been seized from trucks in Texas and California.

Port Houston container volume down 10% 

Container volume at Port Houston dropped 10% in July as the port continued to feel the impact of the coronavirus pandemic.

The port handled 234,737 twenty-foot equivalent units (TEUs) in July, compared to 259,993 TEUs during the same period in 2019. 

From January to July, Port Houston handled 1,662,546 TEUs, compared to 1,721,402 TEUs during the same time last year. 

Total tonnage at the port for July was down 6%, with steel, breakbulk cargo and autos all down compared to July of last year. 

A bright spot for Port Houston was truck transactions at its Barbours Cut Container Terminal in July.

“Our team at the Barbours Cut Container Terminal processed more than 4,000 transactions each day, moving this cargo efficiently through our gates and into stores and homes,” said Roger Guenther, the port’s executive director. “Blank sailings appear to be decreasing at Port Houston in August as well.”

VW Mexico agrees to 5.5% employee pay raise  

Volkswagen’s Mexico unit agreed to a raise in pay and benefits of 5.46% for its employees, the local union for the German automaker said on Tuesday.

Manuel Aburto, spokesman for the Independent Union of Automotive Industry Workers (SITIAVW), said the deal for a new 2020-21 collective contract comprised a salary hike of 3.62% and a rise in “benefits” of 1.84%. 

Volkswagen’s union members in the central state of Puebla, where Volkswagen runs one of the country’s largest auto plants, were seeking a 12% wage increase. They had threatened to strike over the demands by Wednesday.

The plant, which as of May had 11,364 workers, makes the Tiguan, Jetta and Golf models for sale in the U.S., Mexico and other markets.

The new deal went into effect at 11 a.m. Tuesday, Volkswagen Mexico said in a statement.

Volkswagen (OTCMKTS: VWAGY) operates 125 production plants worldwide and employs 671,205 people, according to the company’s website