Accent on diversity spells growth for San Antonio economy.

Since the collapse of the oil, real estate and banking industries that changed the very fabric of the state's economy in the mid 1980s, Texas has seen a dramatic restructuring of its economic base. And in the decade since, no city has worked harder to diversify its economy than San Antonio.

Boasting a large, skilled work force, a well-developed telecommunications infrastructure, a central time zone location and a low cost of doing business, San Antonio has used its strongest assets to attract new business and shape a now-burgeoning economy.

Since those turbulent '80s, San Antonio's total employment has grown more than twice as fast as that of the state as a whole. A broader, more balanced economy has positioned the city as a growing hub in the areas of international trade, biotechnology, health care and research. Tourism has helped to fuel a flourishing service industry, while telecommunications, light manufacturing and financial services thrive in the dynamic Texas market.

"Our city has come a long way from the days when we complacently relied on the military as the backbone of our economy," noted Mayor Nelson Wolff. "Because of the proactive efforts of business leadership in the 1970s and '80s, we are enjoying a vibrant economy and a surge of opportunity for our citizens and young people that would have been inconceivable a decade ago."

Manufacturing

San Antonio's growth in light manufacturing has gained considerable momentum in recent years and continues to be a significant growth sector of the economy. Recently, Bausch & Lomb opened a sunglass manufacturing, assembly and distribution facility, now employing 500. Known for its popular Ray-Ban line of sunglasses, the New York-based eyecare giant's local $5.5 million operation takes advantage of San Antonio's proximity to Mexico, operating a maquiladora in Nuevo Laredo, Tamaulipas, Mexico. Sunglass cases are made in this maquila operation and shipped to San Antonio's assembly plant for international distribution.

The city's proximity to Mexico also served as the primary attraction for GW Plastics Southwest, a wholly owned subsidiary of Vermont-based GW Plastics, one of the nation's leading suppliers to the automotive, medical and electronics industries. The company has built a state-of-the-art injection molding facility in San Antonio.

For Reyes Industries, a Laredo manufacturer of textile products, the city's pro-business attitude and available, experienced work force were the keys in its decision to move its company headquarters and operations to San Antonio. With a current work force of 180, Reyes projects to employ 300. Although 80 percent of its annual sales come from U.S. government contracts, Reyes recently ventured into the commercial market by signing an agreement with Wal-Mart.

The international community also has a presence in San Antonio's light manufacturing industry. Colin Medical Instruments, part of Japan's Colin Electronics, opened a manufacturing plant here to produce the first non-invasive blood pressure monitoring equipment, for which there is a steady market in the United States.

Heavy and Electronics Manufacturing 

In addition to light manufacturing, San Antonio's low utility costs and skilled work force have made the city appealing to both heavy and electronic manufacturers.

For Golden Aluminum, the city's low utility rates were a prime factor in the Colorado-based company's decision in 1989 to choose San Antonio as the site of a new aluminum rolling mill. The 300,000-square-foot facility employs approximately 200 people and is one of the world's largest producers of aluminum sheet metal for beverage and food manufacturers. The company purchases recyclable aluminum, processes it into can sheets and then sells it to canning manufacturers.

The local economy also includes key electronics manufacturers, such as Sony Microelectronics and VLSI Technology. Sony recently made a massive $150 million upgrade to its plant in San Antonio, its only semiconductor manufacturing plant outside Japan. San Jose-based VLSI, a producer of application-specific chips, built a sub-micron wafer fabrication plant in San Antonio and recently announced plans to expand its facility as well.

Food Processing 

San Antonio's access to South Texas fruit and vegetable production, as well as to Mexican agricultural supply lines, have served as attractions to the food-processing industry. Meat processors, vegetable packaging and prepared food suppliers have found San Antonio's low processing costs and well-developed infrastructure ideal for distribution to U.S. and Mexican markets. New companies such as Los Angeles based food manufacturer, Mission Mexican Foods, Inc., the world's largest tortilla producer with over $300 million in annual sales, have joined other nationally recognized food suppliers in San Antonio. Pace Foods, which created and now markets the largest selling Mexican hot sauce in the U.S., has been operating in San Antonio since 1947. Pioneer Flour Mill, the oldest privately owned flour mill in the U.S. and one of the country's leading manufacturers of baking mixes, has been in continuous operation since 1859.

Growth in Aerospace

The aerospace industry in San Antonio also has experienced recent boosts with the addition of Cessna Aircraft Co. and Pratt & Whitney. These companies join the already established companies of Dee Howard and Fairchild Aircraft in serving the nation's aviation industry.

Cessna selected the San Antonio International Airport as the site of its newest U.S.-authorized service center. With NAFTA, Cessna hopes to attract a growing number of clients from Mexico for aircraft service. Pratt & Whitney, one of the premier military and commercial jet-engine manufacturers in the United States, selected San Antonio for its newest repair facility, to be located near Kelly Air Force Base.

Southwestern Bell Goes South

Economic diversity has not only strengthened San Antonio's business climate, but has provided growth opportunities as well. In 1992, Southwestern Bell Corp. announced that it planned to move its corporate headquarters to San Antonio from St. Louis, its home for 113 years. The move brought with it 400 executive positions, adding to the 4,000 employees of the Southwestern Bell Telephone Company already located in the city.

Southwestern Bell, the 29th largest company in America and the 63rd largest in the world, determined that a majority (60 percent) of its business -- as well as a significant portion of its future growth -- was in Texas. But also playing a major role in the decision was San Antonio's proximity to Mexico, where the company is already part of a joint venture in developing that country's telephone system, Telefonos de Mexico (Telmex).

Telecommunications

Southwestern Bell's move also underscored the importance of telecommunications in San Antonio. Building on the foundation of an exceptional fiber optics network and an available, flexible work force, the Alamo City has become a magnet for telecommunications-sensitive industries. With more than 30,000 workers, San Antonio ranks in the top five teleservice markets nationally. Household names such as QVC, Citicorp and American Airlines are now part of San Antonio's corporate roster. Much of the reason for the city's telecommunications appeal is its advanced fiber optics network, which, in addition to San Antonio's central time zone, is a major factor when deciding where to open a communications facility.

QVC Network, the largest cable home shopping network in the U.S., opened a major facility in San Antonio in June 1992, its largest expansion out of its Pennsylvania home base. With a work force of 1,000 and a growing market for home shopping convenience, the company projects employment of 2,000 by the end of 1994.

Through CVC Telemercado Alameda, QVC also entered the Mexican market this year, reaching 15 million households, 24 hours a day.

Citicorp established its major national customer service center to serve its consumer banking division from a 60-acre campus in Northwest San Antonio. The parent company of Citibank chose San Antonio over 100 other cities as the location for its U.S. Service Center, a 125,000-square-foot, $35-million facility that serves some 8 million Citicorp consumer banking customers around the country.

World Savings & Loan Association, a $25 billion financial services institution based in Oakland, Calif., announced in early 1993 that it would open a 275,000-square-foot customer-service center in the city, employing 650 initially and eventually growing to 900 employees. TeleService Resources, an affiliate of American Airlines, also opened a center that now employs 1,000.

"Over the past five years, our customer service operations have outgrown our existing facility in San Leandro, Calif.," said Herbert M. Sandler, chairman and co-CEO of World Savings. "At the same time, we are continuing to expand our branching and lending activities to many other parts of the country. That's why out of the 100 or so cities we considered, San Antonio, with its central time zone and labor availability, was a great match for us."

These companies join other telecommunications-intensive firms already in place, such as USAA, Southwest Airlines, Sears Teleservice Center and West Telemarketing.

Biotech and Healthcare Services

San Antonio is a growing hub in the areas of biotechnology, healthcare and research. The South Texas Medical Center, a $1.3 billion operation with 20,000 employees, boasts more than 30 health-care institutions and hospitals.

In the area of research and bioscience, San Antonio has established a critical mass of world-class research institutions. The city is home to such premier facilities as The University of Texas Health Science Center, one of the foremost biomedical research institutions in the state; the Southwest Foundation for Biomedical Research, an international leader in AIDS research and home to the largest non-human primates colony in the world; Southwest Research Institute, the third largest applied research facility in the U.S.; the Texas Research & Technology Foundation, which owns and operates the 1,200-acre Texas Research Park and provides labs and funding to startup biotech companies; and the University of Texas Institute of Biotechnology, headed by Dr. Wen-Hwa Lee from the University of California at San Diego, who is world renowned for his research in the genetics of cancer.

The availability of qualified pharmacists and affordable office space, coupled with the overwhelming support of The U.T. Health Science Center, spurred Caremark International to relocate its claims operations center to San Antonio from Lincolnshire, Ill., and Culver City, Calif. Caremark is one of the nation's leading providers of prescription drug benefit management programs. The claims operation joined Caremark's Prescription Service Division, a mail-service pharmacy that moved to San Antonio in 1991.

FoxMeyer, the third-largest pharmaceutical wholesaler in the country, operates a distribution facility in the city, joining Mission Pharmacal and DPT Laboratories, known for providing drugs and other pharmaceutical products to health care markets in the U.S.

"The alliances and healthy interaction among the universities, the medical industries and the city have given us a strong foundation," said John P. Howe III, M.D., Health Science Center president. "With the capital, facilities and scientific minds already here, the potential for the biosciences in San Antonio is virtually unlimited."

Tourism

Tourism is one of San Antonio's most important industries. The city's attractions draw more than 10 million tourists to San Antonio every year, pumping approximately $2 billion into the city's economy.

The completion of the 65,000-seat Alamodome added to the city's already star-studded lineup of attractions that include the Alamo and the River Walk. San Antonio's tourism industry has also benefitted from the presence of two major theme parks, Fiesta Texas (an Opryland, USAA joint venture) and Sea World, both of which attract 2 million visitors every year.

The Alamo City consistently ranks as one of the most popular destinations in the nation -- and the world. A 1992 survey of 24,000 Conde Nast Traveler magazine readers ranked San Antonio the third most desirable national destination (behind Santa Fe, N.M., and San Francisco) and ninth in the world. Results of the 1992 Texas Auto Visitor Survey of the U.S. and international short-term visitors show that San Antonio is No. 1 among all Texas vacation destinations.

Stability from Diversification

A diversified economy is one reason the city historically has been able to avoid the "booms and busts" undergone by other major regional economies. And with the growth of its broad-based economy expected to continue, San Antonio appears positioned to enter the 21st century as a national economic leader.