Manufacturers call on Mexico to reopen factories to maintain supply chain

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April 23, 2020

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

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)

Jalisco cartel puts on a show of force with 25-vehicle convoy in Zacatecas

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Susy Buchanan

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April 23, 2020

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Images of the alleged gangsters surfaced on social media late Tuesday.

In a show of force on Tuesday night around 80 members of the Jalisco New Generation Cartel (CJNG) took over the main square in Valparaíso, Zacatecas, an agricultural town of about 13,000.

A convoy of around 25 slow-moving pickup trucks drove through the town, located about 170 kilometers southwest of the state’s capital, and parked in front of city hall. Presumed cartel members jumped out of their vehicles, brandished their weapons, including AK-47s, and shouted “we are Jalisco New Generation,” for several minutes as shocked residents filmed the event.

The city is near the border of Jalisco and Durango and was thought to be controlled by the rival Sinaloa Cartel.

The footage was widely circulated on social media and prompted the state’s Ministry of Public Safety to issue a statement on Wednesday afternoon saying that police and military authorities did not witness the event and had not located any of the vehicles involved.

“As a result of the circulation of these videos, and although there is a presence of security forces in the municipality of Valparaíso, we have decided to strengthen the police presence,” the statement read. Spokesperson Rocío Aguilar said an investigation would be launched to determine whether the footage was actually filmed in Valparaíso and seemed to doubt its authenticity.

The cartel’s march on Valparaíso was not an isolated event. Another group of vehicles carrying men armed with long guns was seen in El Talayote on Wednesday. Minutes later, a third convoy was spotted in southeast Zacatecas on the road to Loreto.

The cartel has not been shy about announcing its arrival in the state and its plans to control the drug trafficking plaza. Ten days ago it hung vinyl banners threatening criminals, promising citizens safety and warning police not to collaborate with extortionists and kidnappers or risk joining the ranks of the cartel’s enemies.

The CJNG has employed similar tactics in other states as they expand their reach throughout Mexico. And their presence is not necessarily a bad thing, some residents say.

A priest in Apatzingán, Michoacán, told ABC News last month that “it seems like they allow people to work, and they don’t prey on civilians, they don’t kidnap, they don’t steal vehicles, they just go about their drug business.”

A restaurant owner in Guanajuato concurred. “Things are quieter when Jalisco is around,” he told the news agency.

But the CJNG is anything but peaceful. The number of bodies attributed to them in Guadalajara filled that city’s morgue to overflowing, and corpses had to be stored in refrigerated trucks. Last October the cartel killed 14 police officers, many of them execution-style. They have even taken down a security forces helicopter using a rocket-propelled grenade.

Source: ABC News (en), La Jornada (sp), La Verdad Noticias (sp)

2 women arrested in Querétaro for attacking health worker

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Cody Copeland

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April 23, 2020

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Police arrest the two women in Querétaro.

Two women in Querétaro were arrested on Wednesday after they attacked a healthcare worker they accused of being infected with Covid-19.

Police were forced to intervene when they spotted the two women harassing an employee of the city’s specialized hospital for women and girls at a bus stop. They began by berating her and attempted to physically attack her before police detained them.

The two attackers could face up to three years in prison or 24-100 days of community service, as well as a fine of up to 24,644 pesos (US $977).

There have been at least three incidents of aggression directed at health workers in Querétaro during the Covid-19 pandemic. Two nurses who boarded a public transit bus in San Juan del Río were asked by the passengers to get off for fear of contagion, and a nurse in Cadereyta de Montes was attacked with bleach.

The events prompted state health services director María Pérez Rendón to recommend that health workers not put on their scrubs or other medical uniforms until they arrive at work in order to avoid further aggressions.

The state has seen 13 health workers become infected during the pandemic. Three of the infections were transmitted from patients suffering from the virus and the rest came from external contact.

Health workers in Querétaro aren’t the only ones to have experienced such fear-based discrimination. A Yucatán man threw hot coffee on a nurse in Mérida in early April and attacks against medical personnel have also been reported in Jalisco, Morelos and elsewhere in Yucatán.

Source: La Jornada (sp)

‘A great disappointment:’ Analysts, economists unimpressed by economic plan

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MND Staff

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April 23, 2020

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Not surprisingly, the president's plan was found lacking by analysts.

The measures outlined by President López Obrador on Wednesday to confront the coronavirus-induced economic crisis have been given a cool reception by economists and other financial experts.

The president’s plan was described by various analysts as “completely insufficient,” contrary to what is recommended, “a great disappointment” and “nothing new” and one warned it will hinder rather than help growth.

López Obrador announced a range of spending cuts on Wednesday morning that he said would allow an extra US $25.4 billion to to be spent on social programs and key infrastructure projects. Among them: 25% salary cuts for high ranking officials and a 75% reduction in spending on general services and supplies.

The president continues to refuse to increase public debt to provide fiscal support for the Mexican economy even as it appears headed for a deep recession in 2020 as a result of the Covid-19 pandemic and the measures put in place to contain the spread of the virus.

Rodolfo de la Torre, an economist and director of the Mexico City-based think tank CEEY, said the austerity measures announced by the president go against what is recommended in crisis situations.

The government should increase spending rather than reduce it, he said, asserting that the López Obrador administration should take on debt to support businesses that are at risk of collapsing.

De la Torre recommended that the government borrow 3% to 4% of GDP to provide stimulus and contended that some of the spending on infrastructure should be redirected elsewhere.

Federico Rubli, an economist and business consultant, described the plan as “a great disappointment.”

“It’s not a coherent plan to reactivate the economy and confront this crisis. They’re presenting austerity measures at the least appropriate time. … They have to turn around and look at what is being done in other parts of the world, which is … injecting resources [into the economy] to support small and medium-sized businesses,” he said.

Rubli also said that it is “reprehensible” that the government is not postponing its three emblematic infrastructure projects, the Maya Train in the country’s southeast, the Santa Lucía airport north of Mexico City and the Dos Bocas oil refinery on the Tabasco coast.

“He [López Obrador] is insisting on maintaining the oil sector as the motor of the economy,” he added, referring to López Obrador’s decision not to cut investment for petroleum production by the state oil company. “It’s completely outdated to think that the oil sector will be the motor to get us out of this crisis.”

Villarreal: president is surrounded by people 'who know nothing.' — Villarreal: president is surrounded by people ‘who know nothing.’

Carlos Ramírez of the consultancy firm Integralia said the cuts the government has made to spending since it took office are “laudable” and that nobody is against helping the nation’s most vulnerable.

However, he said that López Obrador is running the risk of bringing the public sector to a standstill by cutting government spending so deeply.

The general director of the Institute for Industrial Development and Economic Growth, a think tank, said that it is “difficult to think” that the government will be able to combat effectively “the worst global recession in 100 years” without increasing public spending.

José Luis de la Cruz also said that López Obrador is misguided in thinking that he will be able to protect Mexico’s poorest from the economic impact of the crisis through social program spending alone.

“The president believes that he’ll be able to protect the poorest with the same [welfare] payments that he budgeted. But while he’s not protecting the capacity of companies to generate jobs, there will clearly be no way to protect the most vulnerable,” he said.

López Obrador has said repeatedly that his administration is focused on assisting Mexico’s poorest rather than large companies that have been bailed out by past governments. But poverty-fighting nonprofit Oxfam México said this week that the government’s social programs don’t reach all of the country’s needy people.

“The pensions for the elderly, [student] scholarships and pensions for people with disabilities don’t cover all people in situations of poverty,” the NGO said on Twitter. Among those missing out are people who live day to day, subsisting on very low incomes, Oxfam said.

The government has committed to extending federal employment programs such as the tree-planing scheme known as Sembrando Vida (Sowing Life) while López Obrador said Wednesday that 3 million loans will be made available to poor and middle-class Mexicans to help them through the coronavirus-induced economic downturn.

But according to Oxfam the support “will not be insufficient” to see the nation’s poorest through the tough economic times that are predicted to persist for months.

López Obrador is more focused on protecting public finances than jobs, said Gabriela Siller, head of economic analysis at financial group Banco Base. She charged that the government needs to adopt “an expansive fiscal policy” aimed at avoiding widespread job losses.

Héctor Villarreal, general director of the Budget and Economics Research Center, a think tank, blamed the government more widely for the plan presented by the president.

López Obrador is surrounded by people who “know nothing” and the Finance Ministry’s response to the economic crisis has been “pathetic,” he said.

The president “might think that he’s generating big savings but the public sector was already very lean,” Villareal added.

“Now its muscle, tendons and bones have been removed. … Where there should be spending cuts and dismissals is at Pemex.”

Amin Vera, economic analysis director at asset management firm BW Capital, predicted that the measures will end up having a negative impact on growth rather than a positive one.

“That’s why banks such as BBVA are already suggesting scenarios with contractions greater than 10% [in 2020],” he said.

CI Banco analyst James Salazar said the plan “doesn’t contain anything new,” alluding to the fact that López Obrador announced most of the same measures at the start of the month.

He also said that López Obrador failed to provide details about how he plans to create 2 million new jobs by the end of the year.

The economic plan to combat the coronavirus crisis is “completely insufficient,” Salazar said. “More targeted support measures are needed considering that there are sectors that are very badly hit.”

Marco Oviedo, chief economist for Barclays in Latin America, and Alejandro Saldaña, chief economist at the financial company Ve Por Más, both said that the salary cuts for high-ranking officials could affect the operational capacity of the public service and lead to a brain drain of talented personnel.

“This diminishes the motivation … to work,” Ovideo said. “I think it’s unnecessary and doesn’t save a lot.”

Source: El Economista (sp), El Financiero (sp), Forbes México (sp)

Federal science agency gets approval for Mexican-made ventilator

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Susy Buchanan

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April 23, 2020

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Governments across the globe are scrambling to provide ventilators for critically ill coronavirus patients, and Mexico is no different. The country may need up to 20,000, experts say, and currently only has 3,000.

So the government’s announcement that it has approved the production of ventilators developed by the National Council for Science and Technology (Conacyt) may be welcome.

President López Obrador said a French aerospace company based in Querétaro will produce Conacyt’s device, and make around 500 a week. The first batch is set to be delivered by the first or second week of May, which health officials suspect will be when the virus begins to peak.

The ventilators’ approval came from the Federal Commission for Protection Against Sanitary Risk (Cofepris).

Meanwhile, five other low-cost ventilator production projects are on hold pending Cofepris approval. Three Mexican universities, Volkswagen and the non-profit Reesistencia Team México have plans to make the device.

The latter is a working group of 25 multi-disciplinary engineers out of Sonora looking to use equipment like 3D printers to produce ventilators, mimicking a similar project in Spain. The name is derived from their goal of helping people “resist” the virus.

During a recent press conference, the president said a second ventilator prototype developed by Conacyt is in the final phase of testing and could be in production by the third week of May.

However, while ventilators are sorely needed, having them doesn’t necessarily mean survival for those who are gravely ill.

A new study by the Journal of American Medical Association found that, in New York, 88% of coronavirus patients on ventilators it tracked died. That’s a sobering rate of morbidity and much higher than the 50% survival rate many doctors had hoped for.

“For those who have a severe enough course to require hospitalization through the emergency department it is a sad number,” said Karina W. Davidson, a professor at the Feinstein Institutes for Medical Research at Northwell Health, who authored the study.

Source: Xataka (sp), El Universal (sp), El Financiero (sp), The Washington Post (en)

Coronavirus pushes Tijuana hospitals toward saturation point

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Susy Buchanan

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April 23, 2020

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A man with coronavirus symptoms is admitted to a Tijuana hospital.

Hospitals in Tijuana are struggling to care for coronavirus patients as the city’s medical system nears the breaking point, officials say.

Baja California Health Minister Alonso Pérez Rico described a desperate situation in which for every 10 patients who recover enough to leave the hospital, 12 more will test positive and one of those will need to be put on a ventilator. Resources are simply stretched too thin.

“We have 10 ventilators at our disposal for all the hospitals in Tijuana,” Pérez said. “We’re trying to bring as many as we can get from neighboring communities such as Mexicali and Ensenada.”

Crowds of people gather at hospitals around the state’s capital, some hoping for news of sick family members and others who are symptomatic and seeking treatment.

The newspaper El Universal reported that a man named Juan showed up for screening at Hospital 20 complaining of a fever, body ache and a relentless cough. After a six-hour wait, medical staff screened him from a distance of about 4 meters, pointing a laser thermometer at his forehead which registered a fever of 39 C.

However, Juan was sent home with a prescription for Tylenol. Since then, his wife and sister in law have fallen ill.

Elsewhere in the city the scene is equally grim. At Hospital 1, which has the most number of beds for coronavirus patients, dozens of people wait outside hoping to be seen by doctors. Some hold their heads in their hands while others sleep on the ground, huddling together under blankets to keep warm.

The city is considered an epicenter for the virus in Mexico, and the morbidity rate is high; some estimates place it at 15% compared to 3.5% in San Diego, only a few kiilometers away.

Just 175 beds remain available to treat coronavirus patients, which officials warn may be completely full by the weekend.

Yesterday alone saw 123 new confirmed cases and 37 deaths. Currently, the city of 2.14 million has a total of 557 coronavirus cases and has recorded 86 deaths.

Sources: Border Report (en), El Universal (sp)

Tijuana police chief tests positive for Covid-19

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Cody Copeland

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April 23, 2020

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The chief of police and eight other public servants in Tijuana, Baja California, have been diagnosed with Covid-19.

Mayor Arturo González Cruz appointed Roberto Esparza Trujillo as municipal police chief in February. The municipal government announced the diagnosis and said that he is “being safeguarded in his home [and receiving] medical care.”

Municipal spokesperson Miguel Larre said that the operations of the police force “will not be affected and we will continue serving the population in a timely manner.”

Tijuana ranks among the municipalities with the most cases of Covid-19 in the country with 557, and has reported the most deaths from the disease with 66, according to federal Health Ministry data.

Security forces aren’t the only frontline responders being hit hard by the coronavirus in Tijuana. Baja California Governor Jaime Bonilla said last week that doctors were “falling like flies” in the municipality due to a critical shortage of personal protective equipment.

Despite having taken measures such as closing the municipality’s beaches early on in the quarantine period, cases have continued to rise.

State authorities point the finger to the fact that there are no controls on people entering the country from California, prompting the Baja Congress to request earlier this week that the federal government install health screening checkpoints at the border crossings to detect possible cases coming in.

Source: Milenio (sp)

CORRECTION: The earlier version of this story reported that Tijuana had recorded 149 cases, but those were active cases. The total, in fact, was 557 as of Wednesday evening. Cases are deemed active when a person has symptoms and is contagious.

Tax agency puts embargo on property belonging to owner of Interjet

By

Susy Buchanan

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April 23, 2020

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As airlines across the world suffer due to coronavirus travel restrictions, Mexico’s low-cost carrier Interjet may not survive the pandemic.

Aircraft owners have repossessed at least 27 leased planes from Interjet’s fleet, already grounded since the airline stopped flying internationally at the end of March.

The company was dealt a further blow April 17 when Mexico’s tax agency placed a notice of impending embargo on the Mexico City residence of Miguel Alemán Velasco, father of Interjet president Miguel Alemán Magnani.

Interjet was already in the midst of restructuring before the pandemic hit, and struggling with an unhealthy debt to profit ratio. The government’s embargo indicates grave concerns about the company’s solvency.

Founded in 2005, Interjet had been Mexico’s third-largest airline, operating budget flights throughout Mexico and the Americas. The company’s president is the son of a former governor of Veracruz and grandson of former Mexican president Miguel Alemán Valdés, who amassed a fortune as an early investor in Televisa. In 2017 Forbes estimated Alemán Velasco’s net worth to be US $2.5 billion, calling him one of the 15 richest men in Mexico.

Last August the Mexican tax agency ordered Interjet to pay off some US $27 million in back taxes, although the company negotiated a settlement in court requiring that it pay 10% of net profits each month in order to chip away at the debt. At that time, Bloomberg reported that Interjet’s chief financial officer declared in a court filing that losses accumulated between 2013 and 2018 “can be interpreted as the airline’s technical bankruptcy.”

The embattled company later denied that statement, arguing that “bankruptcy can only be declared by court order, and cannot be self-imposed by the debtor or any other entity. It’s a legal process through which the insolvency of a company has to be proved. This is not the case of the current situation of Interjet because the company continues paying its debts.”

Not so any longer, according to tax authorities looking to seize the airline’s founder’s personal property, which in addition to the home includes a limousine, library and a replica of the presidential chair his father once sat on during very different times.

Source: Bloomberg (en), Milenio (sp)

CORRECTION: Interjet president Miguel Alemán is the son of a former governor of Veracruz and the grandson of former Mexican president Miguel Alemán Valdés. Incorrect information appeared in the earlier version of this story. We regret the error.

1,000 new coronavirus cases in one day pushes total to more than 10,000

By

MND Staff

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April 23, 2020

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Active coronavirus cases as of Wednesday. milenio

The number of confirmed cases of Covid-19 in Mexico surged past 10,000 on Wednesday while the death toll from the disease is now approaching 1,000.

The federal Health Ministry reported 1,043 new Covid-19 cases at its Wednesday night press briefing, taking the total number of cases across the country to 10,544. Deputy Health Minister Hugo López-Gatell also reported 113 new fatalities, taking the coronavirus death toll to 970.

The single-day increase in cases is the biggest since Covid-19 was first detected in Mexico at the end of February while the daily death toll spike is the second biggest after the 145 fatalities reported on Tuesday.

Of the more than 10,000 confirmed cases, 3,618 are active, according to Health Ministry data, meaning that those infected currently have symptoms of Covid-19 and are considered contagious. Mexico City has the highest number of active cases with 1,085 followed by México state and Baja California with 584 and 300, respectively.

Mexico City also has the highest coronavirus death toll with 251 fatalities as of Wednesday. Baja California is second with 118 deaths followed by México state, Tabasco and Sinaloa, where 82, 60 and 59 people, respectively, have lost their lives to Covid-19.

While the case fatality rate is much higher among those aged 60 and over, López-Gatell warned that anyone can become seriously ill from Covid-19. Anyone with serious symptoms of the disease should seek medical care whether they are part of a vulnerable group of society or not, he said.

López-Gatell noted that up to 80% of Covid-19 patients who require respiratory support via a ventilator could die.

“In other words, of people who are critically ill, eight of every 10 could die during their hospitalization despite [receiving] medical treatment,” he said.

The health minister acknowledged, however, that there have been cases in Mexico in which patients have recovered even after being in critical condition for as long as several weeks.

In addition to the confirmed Covid-19 deaths, López-Gatell said that there have been a number of patients with symptoms of the disease who died before they were tested.

Mexico’s true coronavirus death toll is therefore likely well above 1,000. Based on confirmed Covid-19 cases and deaths, Mexico’s fatality rate is currently 9.2 per 100 cases whereas the global rate is about 7.

However, the Health Ministry estimates that there are about eight undetected cases of Covid-19 for each confirmed one, meaning that the true fatality rate would be about 1.

Source: Reforma (sp)

Bank of México releases 20-peso coin celebrating founding of Veracruz

By

MND Staff

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April 22, 2020

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A new 20-peso coin that commemorates the 500th anniversary of the founding of the port city of Veracruz is now in circulation, the Bank of México said on Wednesday.

Made out of nickel, silver, bronze and aluminum, the coin is dodecagonal – that is, it has 12 sides. The coin is slightly smaller, thinner and lighter than previously-minted, completely round 20-peso coins.

It has a diameter of 30 millimeters, a thickness of 2.4mm and weighs just under 12.7 grams whereas 20-peso coins that have been put into circulation over the last 27 years measure 32mm from side to side, are 2.75mm thick and tip the scales at almost 16 grams.

The reverse side of the coin features images of the original Veracruz town hall (still in use as the municipal palace) and a 16th-century ship reminiscent of the one on which Spanish conquistador Hernán Cortés sailed to the Gulf coast in 1519. The words “500 years of the foundation of the city and port of Veracruz” encircle the coin’s perimeter.

Like all of Mexico’s coins, the obverse side of the new one features Mexico’s coat of arms – an eagle perched on a prickly pear cactus devouring a rattle snake. Mexico’s official name, Estados Unidos Mexicanos, or the United Mexican States, is embossed on the top half of the coin’s obverse side perimeter.

The new coin has security features that its predecessors of the same denomination don’t have including a “micro-inscription” of “500 VERACRUZ” and a “latent image” of the number 20 that can only be seen if the coin is tilted.

For the time being, the new 20-peso coin and the 20-peso banknote will exist side by side but the central bank plans to phase out the latter.

The Bank of México’s announcement that the new coin had entered circulation comes just days after it confirmed that the release of the new 100-peso note will go ahead as planned in the second half of the year.

The bank announced in 2018 that it intended to release a new family of bills that pay homage to Mexico’s historical identity and natural heritage.

A new 500-peso note was released in August 2018 and a new 200-peso bill was put into circulation last September. A new 50-peso note is scheduled for release in 2022.

Source: El Financiero (sp)