By Karen E. Thuermer, AJOT While auto part suppliers that sell to the US auto industry are feeling the pinch, some find they can retain a competitive edge by manufacturing and shipping their products from Latin America. In fact, those that have opened shop in Honduras, are enjoying particular advantages. One such company is FCI, the fourth largest manufacturer of connectors in the world. Established in France in 1988, the company has been operating in San Pedro Sula, Honduras only since May 2007. From that plant it manufacturers wire harnesses for North America’s automotive industry. FCI today operates in 30 countries in Europe, Asia, and the Americas providing provides connector systems for engine, cockpit, safety, multimedia and other electronic applications. It has 34 manufacturing sites, 12 of which are in the Americas, including Honduras. The company employs 14,200 people worldwide, and in 2007 reported sales of 1.3 billion Euros. The San Pedro Sula plant supplies primarily customers in Mexico and the United States. “But the final customers are in the United States,” says Marcelo Rocha, FCI general manager. “They are Ford, General Motors (GM), and Chrysler.” In Honduras, FCI employs 440 workers. Plans call for increasing that workforce to 600 workers in September when the company moves from mono-assembly functions to more sophisticated functions that involve semi-automate machinery. The equipment will double output. The company chose to locate in Honduras and expand there because of two big advantages: its seaport (Puerto Cortes) and geographic location. Plus, Honduras, by far, offers a cost efficient place from which to manufacture wire harnesses. “We are trying to put in place more production sites in lower cost countries, such as Honduras,” says Rocha. CLOSER THAN YOU THINK While Central America might see farther a field than manufacturing from Mexico, officials point out that Puerto Cortes plays a big factor regarding logistics. Not only is the seaport located on the Caribbean coast of Honduras, making it within a two-day voyage to major US seaports such as Houston, Miami and New Orleans; Puerto Cortes operates as the largest and deepest port in Central America. Overall, the port offers container service 10 times per week to Miami, four times per week to New Orleans, four times per week to New York through Miami, and twice a week to Europe. Puerto Cortes is also connected to San Pedro Sula via a modern, four-lane highway. In addition, Puerto Cortes is the only port in the Western Hemisphere and one of only three in the world that scans 100% of inbound and outbound containers. That’s because the port participates in the US government’s Container Security (CSI), Megaports, and Secure Freight (SFI) Initiatives. Honduran and US customs officials work side-by-side to completely scan each container for radiation. An added benefit, because the entire country has been designated a free trade zone, the company pays no import, export, or income tax; enjoys unrestricted currency conversion; benefits from 100% repatriation of profits and capital, pays no local sales tax on wide range of local low cost raw materials, and can ship with ease given easy import and export shipment clearance with one single entry/exit document. In addition, because Honduras is actively pursing foreign direct investment, 100% foreign ownership is permitted, “We do not have to share our proceeds with local companies such as the case in China or other countries,” Rocha says. SHIPMENT OPTIONS Consequently, FCI ships approximately two million harnesses a month to a distribution center in El Paso, Texas. The shipments are loaded into containers, which are loaded onto steamships each week for transport to the Port of Houston. They are then trucked to El Paso. “Another option is to ship to New Orleans then truck to El Paso,” states Rocha. “Sometimes we need to ship twice a week, so use the second route.” Shipments go via Seaboard, whi