Only 269,000 Mexicans earn more than US $16 per hour, or 308 pesos

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August 30, 2018

It might be a while before they're making $16 an hour.

Only 269,000 Mexicans earn US $16 or more per hour, the wage level proposed for specialized automotive sector workers as part of the trade agreement announced Monday between Mexico and the United States.

The amount is equivalent to about 308 pesos or three and a half times Mexico’s daily minimum wage of 88 pesos.

According to data from the National Institute of Statistics and Geography (Inegi), just 0.5% of 53.8 million workers in Mexico earn such a salary, which for a 30-day working month adds up to 74,112 pesos (US $3,880).

“It’s known that less than 1% of the working population in Mexico earns more than 10 minimum salaries [880 pesos or US $46 per day], which is about 27,000 pesos [US $1,400] per month, so earning more than 74,000 pesos is much more difficult to attain,” said José Luis de la Cruz Gallegos, general director of the Institute for Industrial Development and Economic Growth (IDIC).

The United States-Mexico Trade Agreement, as U.S. President Donald Trump called it, stipulates that 40% to 45% of vehicle content must be made in high wage zones where workers earn at least US $16 per hour.

Economy Secretary Ildefonso Guajardo said earlier this week that in time Mexico would be able to meet that requirement but for that to happen, salaries would have to increase by around two to three times.

Average hourly wages for specialized auto sector workers and mechatronic engineers currently range on average between US $5 and US $7.

Two business leaders were not optimistic that wages would increase any time soon. Gustavo de Hoyos Walter of the employers’ federation Coparmex said remuneration would not likely reach $16 an hour in the short term. Instead, he predicted some shifts in the manufacture of automotive parts between the two countries.

Guillermo Rosales of the Mexican Automotive Dealers Association said conditions won’t exist in either the short or medium term for wages to reach that level.

Arturo Rangel, a vice-president at the National Chamber for Industrial Transformation (Canacintra), told the newspaper El Universal that only managers, directors and very highly-specialized technicians command salaries equivalent to $16 an hour.

To reach that wage level for other workers, Rangel said, investment will be needed to increase automation of manufacturing plants so that an employee can simultaneously manage three or four production lines.

For his part, De la Cruz said the new auto trade rules will force Mexico to adopt an industrial policy that allows productivity to go up and the costs of inputs, such as electricity, to go down.

Better security conditions and logistics will also be needed in order for auto sector companies to be able to pay the $16 wage, he added.

Employment lawyer Ricardo Martínez said the inclusion of the wage provision in the new pact was a clear strategy on the part of Trump and U.S. trade unions to take away Mexico’s labor advantage and return manufacturing jobs to the United States.

He added that increasing salaries was a good idea but stressed that it needed to be a gradual process that doesn’t discourage investment in the auto sector and contribute to a loss of jobs.

Talks aimed at bringing Canada into the agreement reached by Mexico and the United States are taking placing in Washington D.C. this week, with Mexican and U.S. officials pushing for a deal by tomorrow.

Guajardo said Tuesday that if Canada doesn’t agree to parts of the pact, they will be renegotiated.

Canadian Foreign Minister Chrystia Freeland said today that negotiators were “working very, very intensely” and that “there’s a lot of goodwill” but added “it’s a lot that we’re trying to do in a short period of time.”

Source: El Universal (sp)

Suspect arrested in death of Michoacán priest

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César Hernández

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August 30, 2018

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The priest killed in Michoacán last week.

The alleged killer of a Michoacán priest who was found dead on Saturday was arrested by police late Tuesday night.

The state Attorney General said in a press release that the suspected murderer, identified only as Abel N., attacked Miguel Gerardo Flores Hernández with a firearm on August 18, the day he was last seen.

The investigation found that Flores, parish priest in Jucutacato, Uruapan, was with a group of people in the town of Nueva Italia when the suspect approached and shot him in the head.

The suspect threatened to harm the witnesses if they spoke of the incident.

The priest’s body was found in Múgica.

The Catholic church has recorded 22 assassinations of priests between December 2012 and last April, making Mexico one of the most dangerous countries in Latin America for priests.

Source: Quadratín (sp)

Nestlé pays tribute to coffee growers with personalized packaging

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César Hernández

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August 30, 2018

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New Nescafé packaging bearing photos and names of coffee growers.

Food and drink company Nestlé will pay homage to 1,000 coffee producers in Chiapas, Oaxaca and Veracruz with special packaging bearing their names and photos.

The “Nescafé tribute” campaign will give consumers the opportunity “to known the face and names of those behind the coffee they drink every day,” explained Phillip Navratil, coffee and drinks vice-president at Nestlé México.

Nestlé works with close to 80,000 coffee growers in Mexico.

The campaign is designed to bring consumers closer to the coffee suppliers, many of whom have worked with the Swiss company for generations, explained executive president Fausto Costa.

Half a million bags of coffee with the new packaging will appear on store shelves throughout Mexico in early September.

Nestlé has invested about 200 million pesos (US $13.4 million) since 2010 in its Nescafé Plan, of which the new packaging initiative is a part, in an effort to produce high-impact economic and social initiatives in coffee-growing communities.

“We are looking to grow production. [But] it needs a lot of help, not just from the private sector but the public sector as well, along with other businesses and organizations that support the farmers,” Costa said.

He explained that over the last eight years Nestlé has delivered close to 29 million plants to coffee growers and organized 83,000 training sessions to inform them about sustainable farming techniques.

“We know that the challenge at the global level is to see that agriculture continues to grow without provoking environmental imbalance,” he said.

Nestlé is the largest coffee buyer in Mexico, Costa said, buying 29% of national production.

Source: Milenio (sp), El Financiero (sp)

Nets that killed turtles were the type used by coastal fishermen

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MND Staff

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August 30, 2018

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Dead turtles off the coast of Oaxaca this week.

Fishing nets that trapped and killed more than 300 turtles off the coast of Oaxaca this week belonged to coastal fishermen, not a tuna or shrimp boat, federal authorities say.

The Environmental Protection Agency (Profepa) said in a statement yesterday that it reached the conclusion in coordination with the National Aquaculture and Fisheries Commission (Conapesca) after inspecting a net in which as many as 380 olive ridley sea turtles became entangled.

“In this event, the responsibility of tuna or shrimp boats was ruled out because their fishing nets and mode of operation don’t match with what was observed in this unfortunate incident,” the statement said.

“The kind of net found, of a length of 120 meters and made with six-inch nylon mesh monofilament, matches those used in coastal fishing . . . for the capture of species such as swordfish, bigeye scad and shark,” it continued.

“The presence of this net in sea waters might be due to an irresponsible fishing practice or an incident that forced fishermen to abandon it . . . Profepa urges fishermen not to carry out these bad practices, including the use of prohibited fishing nets.”

The statement also said that for a 15-day period leading up to the discovery of the dead turtles, Conapesca’s Fishing Vessels Satellite Monitoring System (SISMEP) had not detected any boats engaged in fishing in the area.

Oaxaca Civil Protection services located the turtles Tuesday in the Pacific Ocean three miles from Barra de Colotepec, a community near Puerto Escondido, after receiving an anonymous tip.

Later the same day Profepa said it was initiating an investigation to identify those responsible, who could face up to nine years imprisonment in addition to a fine.

Profepa said it will also file a criminal complaint with the federal Attorney General’s office (PGR) and that its personnel, in conjunction with members of the navy and Conapesca, would maintain permanent patrols of the area to avoid the repeat of any similar incident.

The newspaper Milenio reported today that more than 5,000 fishermen work for 235 registered cooperatives in Oaxaca but a further 22,000 operate illegally.

Finding the owners of the net that killed the turtles will be difficult, a Profepa official told Milenio, because most fishing boats don’t have GPS systems that allow them to be traced.

The olive ridley turtle, known in Mexico as tortuga golfina, is listed by the federal Secretariat of Environment as a protected species in danger of extinction.

Source: Milenio (sp)

Amazon adds food and drinks, including wine and liquor, to its inventory

By

Tony Richards

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August 30, 2018

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Amazon México has expanded its inventory this week to include food and beverages, including snacks, sweets, coffees and teas and wine and liquor, increasing the options for online shopping in Mexico.

Cooking ingredients, oils and dressings and gourmet products are also among the products now available on the website.

The new inventory includes a large selection of wine and liquor supplied by existing online retailers, such as La Europea, Vino el Vino and Vid Mexicana.

Some wine prices are the same on at least one of those sites as they are on Amazon, but there are no delivery charges — which at some online stores can be high — for Amazon Prime members.

However, some whisky prices were higher on Amazon.

“We’re committed to offering our clients as many products as we can,” Fernando Ramírez, Amazon México’s senior product manager, said in a statement.

Amazon sees food and drink sales as key to growth, Reuters reported today, in the belief that regular purchases to stock pantries will generate other types of sales.

The firm is challenging Walmart México with its expansion, as well as Costco.

The former said earlier this year it planned to accelerate its online grocery business in Mexico, viewing grocery delivery as “an important part of that push.”

Although it will compete for delivery services against Soriana, La Comer and Chedraui, it expects to be able to make speedy deliveries given its greater scale: it has 2,390 stores across the country.

Like Amazon, it too hopes that generating a “shopping habit” for groceries will spill over into other product types, said e-commerce head Ignacio Caride last month.

Source: Reuters (en)

Some auto exports protected against possible ‘national security’ tariffs

By

MND Staff

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August 30, 2018

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Side agreement prevents some of these from being subject to a new tariff.

Mexico and the United States have agreed to a side letter to the new trade agreement announced Monday that will protect some Mexican auto exports against possible “national security” tariffs, Economy Secretary Ildefonso Guajardo said yesterday.

Under the arrangement, which Guajardo described as “insurance for Mexico,” if the United States government applies Section 232 tariffs to auto imports — as it did to steel and aluminum earlier this year — Mexico would still have duty-free access to the U.S. market for vehicles that comply with the new rules of origin, but only up to a certain limit.

Guajardo explained that the cap was set 40% above the 1.7 million cars Mexico currently exports annually to the United States, which he said gave Mexico’s auto industry scope to grow before facing the potential national security tariffs.

That means that auto duties of up to 25%, which United States President Donald Trump has threatened to impose, would only apply to Mexican car and SUV imports of over 2.4 million vehicles.

The Trump administration is planning to announce in the coming weeks the results of a probe into whether auto imports pose a threat to national security, which could pave the way for the introduction of new tariffs.

“How do we protect ourselves? With a side letter,” Guajardo said. “If they impose the tariffs, what’s going to happen is that they will exempt us from that quantity of vehicles.”

The parallel arrangement also allows for the United States to impose national security tariffs on auto part imports above a value of US $90 billion annually, which also exceeds current levels.

Mexico and the United States announced Monday that they had reached a trade agreement and talks aimed at bringing Canada into the deal are taking place in Washington D.C. this week.

The agreement stipulates that 75% of vehicle content must be made in the North American region in order to qualify for tariff-free status and that 40% to 45% of content must be made in high wage zones where workers earn at least US $16 an hour.

Guajardo said earlier this week that almost 70% of Mexico’s auto exports already comply with the former rule and that in time Mexico would also be able to meet the high-wage zone requirement.

Source: Reuters (sp)

Kidnapping suspects burned alive by lynch mob in Puebla

By

Tony Richards

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August 30, 2018

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The two victims before yesterday's lynching.

Two suspected child snatchers met a nasty end yesterday in Puebla: they were beaten and burned alive by angry citizens of San Vicente Boquerón in Acatlán de Osorio.

The victims were local farmworkers, an uncle and his nephew aged 56 and 21 who were residents of Xayacatlán de Bravo and Acatlán, the state Attorney General said, and are believed to have been innocent.

The two, who were reported drunk at the time, had been taken into police custody after they were accosted by residents. But the latter took them from police by force, tied them up, doused them with gasoline and set them on fire in front of the police station.

Media outlets later published graphic photos of the charred bodies lying in the street.

The regional prosecutor’s office said preliminary inquiries had revealed no evidence that the two victims had committed a crime.

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State officials said a week ago that 14 people had been rescued from lynch mobs in different regions of the state, although the time period was not indicated.

Between August 15 and 19 officials implemented measures designed to stop the practice in municipalities where citizens have taken justice into their own hands.

They are Xochitlán Todos Santos, Cañada Morelos, San Salvador Huixcolotla, Puebla, Chignautla and Tepeaca.

After yesterday’s incident they might want to add Acatlán to that list.

Source: e-consulta (sp), El Universal (sp)

Central bank has bad news for AMLO with reduced growth forecast

By

MND Staff

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August 29, 2018

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Mexico’s central bank was a bearer of bad news for incoming president Andrés Manuel López Obrador today, lowering its growth expectations for his first full year in office.

In its quarterly inflation report, the Bank of México (Banxico) predicted growth of 1.8% to 2.8% in 2019, down from a range of 2.2% to 3.2% in its previous report.

López Obrador said earlier this month that Mexico has the capacity to double its rate of economic growth from 2% to 4%, and that the private sector is committed to doing its part to achieve it.

Banxico also lowered its growth outlook for this year to a range of 2% to 2.6% compared to a 2% to 3% range in its last forecast.

Bank of México governor Alejandro Díaz de León explained that “the most important factor for which we decided to reduce our growth expectations for these two years was the economic growth result of the second quarter.”

The quarterly report said that “in the second quarter of 2018, economic activity contracted due to declines in primary and secondary [sector] activities as well as a loss of dynamism in the services sector.”

Díaz de Léon did, however, express optimism about the trade pact reached this week between Mexico and the United States, describing it as “a very important step” and predicting that a final agreement could trigger new investment and boost growth.

“We are very optimistic that this agreement and this understanding to modernize the commercial relationship can be extended and finalized in the next weeks, months,” he said.

“It would clearly be an element of uncertainty that would diminish considerably.”

With respect to inflation, the central bank made upward revisions for both 2018 and 2019.

Inflation will reach 4.2% in the last quarter of this year, Banxico said, compared to an estimate of 3.8% in its previous report. Inflation of 3.3% was predicted for 2019, up from 3.1%.

The upward revisions were due to higher than expected energy prices but inflation would near the bank’s target of 3% in the first half of 2020, the report said.

The Bank of México also slightly revised its employment forecasts for this year and next, estimating that between 670,000 and 770,000 new jobs would be registered by the Mexican Social Security Institute (IMSS) this year.

The figures are 10,000 fewer at each end of the range compared to its previous forecast

The bank predicted the same number of jobs would be created next year, 20,000 fewer than its previous forecast.

One job creation program López Obrador has announced since his victory in the July 1 election is an apprenticeship scheme for young people called “Youths building the future.”

Source: El Financiero (sp)

Vehicle armorers might have to take a hit under AMLO’s austerity

By

MND Staff

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August 29, 2018

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Armor-plating vehicles is a big business in Mexico and the federal government is one of the biggest customers, but there are fears that the industry could take a hit under the incoming administration’s austerity plan.

Successive governments have spent almost 1 billion pesos (US $52.7 million) to armor-plate vehicles over the past 12 years. The administrations of both Felipe Calderón and Enrique Peña Nieto paid hundreds of millions of pesos each to protect politicians and high-ranking officials while on the road and security personnel during tactical operations.

All told, the Calderón-led National Action Party (PAN) government spent just under 562.4 million pesos to armor-plate vehicles, while the current Institutional Revolutionary Party (PRI) administration has spent 411.3 million pesos.

But will president-elect Andrés Manuel López Obrador, who has already said that he will eschew personal security as one of several austerity measures he intends to adopt in office, also spend big to armor-plate state vehicles?

Esteban Hernández, general director of the Mexican Association of Automobile Armorers, fears not.

Hernández told the newspaper El Universal that he is concerned that the demand for armor-plating services will drop during the administration of the leftist political veteran commonly known as AMLO, and that the industry will suffer as a consequence.

López Obrador has already announced that he plans to slash the bureaucracy, sell off the presidential plane and cut the salaries of lawmakers and high-level officials, so the likelihood that he would dig deep into government coffers to armor more vehicles, especially those used by politicians and officials, would appear unlikely.

Government data obtained by El Universal through freedom of information requests shows that the Federal Police has been by far the biggest customer for vehicle armor-plating services over the past 12 years, spending 734.4 million pesos.

The Secretariat of the Navy has spent 92.5 million pesos in the same period, while the Bank of México spent just shy of 70 million pesos.

In total, 15 government departments and institutions have paid for the services during the current and previous administrations including the federal Attorney General’s office, the National Human Rights Commission (CNDH) and the Secretariat of Finance (SHCP).

According to Hernández, Mexico is one of the world’s leading exporters of armored vehicles. He said his company, Auto Safe, exported US $1 million worth of such vehicles last year.

López Obrador, who said that “the people will protect me” when explaining his decision to forgo personal security days after his landslide victory in the July 1 presidential election, will be sworn in on December 1.

Source: El Universal (sp)

Developer will open 3 ‘malltertainment’ shopping centers this fall

By

MND Staff

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August 29, 2018

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An illustration of the 'malltertainment' concept now under construction in Cholula, Puebla.

The real estate development firm Gicsa will open three new shopping centers over the next three months under the concept known as “malltertainment.”

The company first announced the “entertainment mall” category in 2016, explaining that the concept would integrate entertainment venues, a range of shops and department stores, co-working spaces and public areas in shopping centers with an average size of 185,000 square meters.

On September 28, Isla Mérida in the Yucatán capital will be the first malltertainment shopping center to open, followed by Explanada Puebla on October 18 and Paseo Querétaro in November.

The three malls, Gicsa’s first developments in the category, will together cost around 6 billion pesos (US $316 million) to build.

The Isla Mérida project includes entertainment areas such as movie theaters and a children’s center as well as a lagoon with canals, green areas, gardens, a variety of restaurants, a residential area and a 140-room hotel, according to Gicsa’s website.

Isidro Attie, the company’s director for the malltertainment concept, said in 2016 that Explanada Puebla “will have a 33-ride midway, a bowling alley, a 5,000-seat entertainment center, a hot-air balloon, medical facilities, a technical university, a preschool and daycare center, a hotel with more than 150 rooms, a co-working and networking space for entrepreneurs and open-air exercise areas.”

Paseo Querétaro will include department stores, clothing and shoe stores, service stores, movie theaters, gyms, a children’s entertainment area, as well as a vast selection of restaurants at a location adjacent to the city’s old airport.

Company CEO Abraham Cababie Daniel told a press conference yesterday that Gicsa expects to open another nine or 10 shopping centers in the category by 2020, with the cities of Aguascalientes, San Luis Potosí, Pachuca and Culiacán among the planned locations.

Existing Gicsa shopping centers will be partially or totally converted to meet the malltertainment requirements, he said, adding that most of the mega-developments will include hotels.

“We hope that the malltertainment shopping centers become tourist destinations in themselves, in addition to being the epicenter of each city,” explained Attie.

Source: El Economista (sp)