Coronavirus
Shutting down factories in Mexico has broken the supply chains integral to trade with the US. Shutting down factories in Mexico has broken the supply chains integral to trade with the US.

Manufacturers call on Mexico to reopen factories to maintain supply chain

President urged to follow guidelines issued by the US Department of Homeland Security

Manufacturers in the United States and Mexico are calling on the federal government to allow the reopening of certain Mexican factories that were closed due to the coronavirus pandemic in order to maintain supply chains in the North American market.

And it appears President López Obrador is listening: he said on Thursday that he expected there would be an agreement “in due course” to allow factories that contribute to the regional supply chain to begin operating normally again.

“We’ve pledged, above all with Mexican businesses, to analyze these openings so we can gradually return to operating as normal,” he told reporters at his morning news conference.

The president’s remarks came a day after the National Association of Manufacturers (NAM), a Washington D.C.-based advocacy group, sent him a letter asking that his government refer to the guidance issued by the U.S. Department of Homeland Security to determine whether a particular factory be designated as essential and critical.

By doing so, Mexico would help ensure that manufacturers of essential and critical products and components can continue operations, the NAM said.

The association said earlier it appreciated the critical steps that Mexico is taking to slow the spread of Covid-19 but added that it was “deeply concerned about the health emergency decrees” that have resulted in the forced or threatened shuttering of its companies’ manufacturing facilities, as well as those of suppliers.

The situation imperils companies’ ability to “deliver critical supplies and daily essentials to citizens in Mexico and across North America,” the letter said.

“This is a pivotal moment. We are working with urgency to arm our healthcare providers and other Covid-19 frontline workers with the resources they need to save and protect the lives of our fellow citizens. The shuttering of our companies’ and suppliers’ facilities in Mexico, however, threatens to undermine that effort,” it continued.

Signed by the chief executive officers of more than 300 companies, including firms that manufacture medical supplies, the letter said that the health and safety of workers was the highest priority of the NAM. Factory employees allowed to return to work would practice “appropriate physical distancing” and use the necessary personal protective equipment, the NAM said.

The association, which represents some 14,000 companies in total, also wrote to López Obrador last week to warn him that the shutdown of factories could weaken the response to the coronavirus pandemic.

“At a time when we need to ramp up the production of personal protective equipment, lifesaving equipment and medicines, we cannot afford to have any of these critical supply chains shut down,” it said.

“Our healthcare sectors depend on the many products that we make — from medicines, sanitation supplies and inputs used to produce respirators and masks to the grains used to make bread and critical parts that ensure trucks can deliver groceries.”

The American Chamber of Commerce of Mexico has also called on the government to allow productive activities that are considered essential in the U.S. to be carried out here during the emergency health period, currently scheduled to run through May 30.

Aligning Mexico’s essential activities with those in the United States “is necessary to protect value chains and the economic integration of both countries,” said the chamber’s Gustavo Almaraz.

United States Defense Undersecretary Ellen Lord and U.S. Ambassador to Mexico Christopher Landau have also made it clear that they want Mexican factories that supply U.S. defense companies to reopen.

“I’m doing all I can to save supply chains between Mexico, the United States and Canada,” Landau wrote on Twitter on Tuesday.

Also calling on the government to declare productive sectors such as automotive, aerospace and electronics essential is Mexico’s Confederation of Industrial Chambers (Concamin).

If Mexico is unable to supply companies in the United States and Canada, they will look for local suppliers and Mexico will miss out on the economic benefits of being part of an integrated North American market, said Concamin representative Eduardo Solís.

“[Mexico would] lose all that we have gained … exports that were growing at double digits before this situation,” he said.

Solís, former president of the Mexican Auto Industry Association, also wrote to López Obrador to ask him to review the list of activities considered essential. “We’re putting everything we have gained at risk,” he reiterated.

Source: Milenio (sp), El Economista (sp), Reuters (en) 

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