Mexico gears up for auto industry restart

Mexican auto assembly plants and parts suppliers scrambled Monday to meet government requirements for reopening their factories and synchronize with U.S. counterparts now coming back to life — including the Detroit 3.

Mexico’s reopening is seen as critical to restocking vehicle inventory in the U.S. and feeding parts into the supply chain.

After a confusing series of steps last week that suggested Mexico’s auto industry could have to wait until June 1, the government published a set of rules on Sunday that allows plants to get certified for reopening within 72 hours. Each facility must submit a coronavirus safety plan starting Monday. Once approved via email, the plant can open.

The regulations allow for a quick turnaround, in some cases.

If a factory submits its plan and is approved on the same day, the facility can restart production immediately, officials said. Inspections are not needed, and will be done randomly in the future to ensure compliance, according to the guidelines published in the official government gazette.

President Andrés Manuel López Obrador, who has been eager to restart the economy despite concerns by health officials, said Monday that international automakers can submit the same plans they are using in their home countries.

“If an auto company wants to open, they are going fill out a questionnaire, they are going to answer about 70 questions and they are going to say they will comply,” López Obrador said at a news conference. “We are asking for them to do the same that they are doing in Germany, in the United States, in Japan, taking care of their employees,” he said. “To the degree that they have their protocols in place, they can start opening today.”

The relatively rapid process replaces one by the government last week that would have designated May 18-June 1 as a period for factory preparations, but not production. That would have been bad news for U.S. automakers such as General Motors that need Mexican production of popular models — like the Silverado pickup.

Likewise, any delays in the reopening of Mexican parts plants could cripple factories in the U.S. that have already opened and are running low on supplies. Bloomberg News reported last week that Daimler’s Mercedes-Benz plant in Alabama would be forced to close this week due to a lack of Mexican parts. Other automakers said stocks are low.

Rising fatalities

With Mexico’s coronavirus death toll having surged past 5,000, and known cases set to surpass 50,000, officials are wrestling with how to restart key industries without triggering greater spread of the virus in the population.

The moves to loosen restrictions follow growing pressure from the United States to reopen factories that are vital to manufacturing supply chains of U.S.-based businesses, especially in the vast automotive sector.

Mexico’s reopening plans have drawn criticism from some politicians worried that the still-rising pandemic tide in Latin America makes it unsafe to send more people to work.

GM told workers at its plant in Silao over the weekend to prepare for a return to work there on Wednesday. GM also told Mexican suppliers the company expected to comply quickly with the new regulations.

Reuters contributed to this report.

Source link

Leave a Reply