German automotive parts maker Continental AG said on Monday it will invest around 60 million euros ($72 million) in expanding a plant in the central Mexican state of San Luis Potosi.

In a statement, the company said it would manufacture brake parts in the 20,000 square meters of new production space. ($1 = 0.8304 euros)

“The decision to locate the manufacturing of these high-tech components at the San Luis Potosi plant is a strong sign of Continental’s confidence in Mexico and especially in the region,” plant manager Victor Hernandez said.

The expansion of the plant, which is scheduled for completion in October 2022, is welcome news for Mexican President Andres Manuel Lopez Obrador, whose unorthodox economic policies have spooked investors.

It also comes as Mexico’s economy recovers from its worst recession last year in almost 90 years and Lopez Obrador hopes the new United States-Mexico-Canada Agreement (USMCA) trade deal spurs new investments and jobs.

Continental said the expansion would create some 350 new jobs over the next three years, on top of the 650 people already employed at the San Luis Potosi plant. (Reporting by Abraham Gonzalez in Mexico City Writing by Laura Gottesdiener and Anthony Esposito Editing by Matthew Lewis)

Source: REUTERS

( https://www.reuters.com/article/mexico-continental/update-1-germanys-continental-to-invest-60-million-euros-in-central-mexico-idINL2N2KZ2GT )

The Mexican unit of Volkswagen AG will resume production of its Tiguan sports utility vehicle on Monday evening, the company said in a statement on Sunday, following gas shortages that hit swathes of Mexico last week.

Meanwhile, Audi will resume normal production levels at its plant in Puebla on Monday, after “the supply of hydrocarbons to the industrial sector was guaranteed,” the company said on Sunday.

Source: REUTERS

( https://mexico-now.com/electricity-and-natural-gas-outages-in-northern-mexico-are-causing-big-losses-for-manufacturers/ )

The electricity and natural gas outages in northern Mexico have generated a loss of US$2.7 billion in just two days, since almost all of the manufacturing operations were stopped, according to INDEX figures.

“The most affected states are Chihuahua, Coahuila, Nuevo Leon and Tamaulipas. Sonora and Baja California are not connected to the national electricity grid; therefore, their situation is kind of different,” explained Luis Hernandez, INDEX president.

In some regions, such as Matamoros and Reynosa, the manufacturing facilities shutdown entirely their operations because those cities have no electricity supply.

“At the end of the day, our losses will be higher because we will have to pay overtime to fulfill our orders and be in compliance with our clients,” said Rosalinda Torres, president of INDEX Matamoros.

INDEX figures show these electricity and natural gas outages are affecting at least 2,600 manufacturing sites in Northern Mexico and more than 1.2 million employees. This temporary or partial shutdown costs US$200 million per hour.

“We have been informed that the natural gas outages will be for high-consumption clients. Manufacturers are in this category and many of them use natural gas as a raw material in their processes and cannot operate without them,” said Fabiola Luna, president of INDEX Juarez.

Hernandez said coordination is key because the Federal Government is not doing its part on this issue. He said the cuts should be programmed; therefore, companies can plan accordingly.

Moreover, the INDEX presidents at Northern Mexico are demanding a regional contact from the Mexican Federal Government in each state to address these issues.

Winter Storm Uri chilled large areas of Texas. As a result, gas pipelines were blocked with ice or their compressors lost power. The Lone Star State prioritize much of the gas available for heating homes and businesses rather than generating electricity.

Texas also stopped natural gas exports to Mexico. Most of the CFE stations use natural gas to generate electricity and this fuel is imported via Texas. INDEX presidents in Northern Mexico said the Federal Government was aware of this situation and neither notify it to the companies nor had reserves to keep the system running.

CFE said its operations were left short as the winter storm in Texas froze natural gas pipelines. It said some private power plants also began shutting down Sunday night. Private plants supply about 80% of power in northern Mexico.

Mexico uses gas to generate about 60% of its power, compared to about 40% in the U.S. Mexico built pipelines to take advantage of cheap natural gas from the U.S., mostly from Texas.

Moreover, CFE said U.S. electricity demand also rose as temperatures plunged across the border, leading to much higher prices. It said gas prices had risen from about US$3 per million BTUs to as much as US$600 in recent days.

Source: MEXICONOW

( https://mexico-now.com/electricity-and-natural-gas-outages-in-northern-mexico-are-causing-big-losses-for-manufacturers/ )

On January 29th, the Volkswagen plant in Mexico installed in Silao, Guanajuato, started the production of the EA211 engine, which will be integrated into the new TAOS, which is produced at the Puebla plant.

It was on November 12, 2020, when Volkswagen de México announced the investment of $233.5 million dollars to produce the new EA211 engine, which would begin at the Silao engine plant, Guanajuato from 2021, today it is already a fact.

‘Volkswagen in México has bravely faced the challenges of 2020, we implemented more than 130 prevention measures within our plants. We prepare the new production lines for the start-up of this new engine. Despite the pandemic, we were able to start with the production of the new vehicle in Puebla, the TAOS. We applaud everyone for this great success, ‘said Christopher Glover, Vice President of Production and Logistics at Volkswagen in México.

The Silao plant had to make various adjustments to carry out the production of the EA211 such as: installation of a new complete engine assembly line, as well as new production lines for Monoblock, crankshaft, cylinder heads and connecting rods.

‘This new engine is integrated into the new Taos, which is produced in Puebla. Our commitment is not limited to making investments, in technology we also focus on the environment. 100 percent of the production in Silao is from renewable sources, ‘said Steffen Reiche, President of the Executive Council of Volkswagen in México.

The manager highlighted that the start-up of production began as stipulated and with excellent quality, he also acknowledged that this result was thanks to the team of collaborators at Silao.

This new component is in addition to the production of the 2.0 liter EA888 Turbo engine, which Volkswagen in México uses for the vehicle assembly lines at the Volkswagen plants in Chattanooga (United States) and Puebla, as well as at Audi México, in San José Chiapas, Puebla.

‘This is a sign of the confidence that this world-class company has in Guanajuato. In addition, there will be a very positive impact for the entire supply sector that is made up for the automotive cluster and a greater economic impact will be reflected in the State, ‘said Diego Sinhue Rodríguez Vallejo, Governor of the State of Guanajuato.

Currently the Silao complex has a production capacity of a thousand engines per day, however with this new launch, it will increase its capacity by around 2,500 engines per day for the following year.

With this new investment, the complex will increase 75 percent of its installed capacity from what it had previously.

The investment of $233.5 million dollars for this new project is part of a historical total amount of the 855 million dollars located only in Guanajuato.

Present at the event were: Christopher Glover, Vice President of Production and Logistics of Volkswagen in México; Steffen Reiche, President of the Executive Council of Volkswagen in México; Diego Sinhue Rodríguez Vallejo, Governor of the State of Guanajuato; Mauricio Usabiaga Díaz Barriga, Secretary of Sustainable Economic Development of Guanajuato and José Antonio Trejo Valdepeña, Municipal President of Silao Guanajuato.

Source: Cluster Industrial

(https://www.clusterindustrial.com.mx/noticia/2991/arrancan-motores-volkswagen-de-mexico-comienza-a-producir-ea211-en-guanajuato)

Even with the prevalence of the COVID-19 pandemic and the impact it has generated on the local, national and global economy, the state of Querétaro maintains an active list of private investment intentions.

With the beginning of the year, the entity has a portfolio of 27 investment projects that are expected to settle in the state, but whose decision has not yet been defined, according to records from the Ministry for Sustainable Development (Sedesu).

The projects represent an accumulated amount of US$1,536,094 and if they are completed they would mean the incorporation of 13,766 formal jobs, informed the head of Sedesu, Marco Antonio Del Prete Tercero.

Among the projects, 22 correspond to new investments and five to extensions of companies that already reside in the territory; they focus on the manufacturing sector and correspond to both national and international investments.

“The project portfolio is mainly manufacturing, followed by information technology; Mexico, the United States, Japan and Canada are the main commercial partners that are investing in the state,” declared the state minister.

Even though the aerospace industry is one of the sectors most affected by the pandemic, he added, investment projects related to this activity have been completed in the state.

In 2020, 27 investment projects for US$595,784 were completed in the entity, they meant the creation of 5,269 direct job and had to do mainly with the automotive industry (7), information technology (4), aeronautics (2), food and beverages (1), electronics (1), among other sectors (12).

The origin of the investments made the previous year was national capital, Japanese, Canadian, German, American, and so on. And they settled to a greater extent in the metropolitan municipalities of El Marqués (9) and Querétaro (8), in addition to Colón (5), Pedro Escobedo (1), Corregidora (1) and San Juan del Río (1); two more projects have not yet defined their location.

Around the expectations for this 2021, the promotion of investments will be one of the lines of work that the state government draws, together with the continuity of strategies such as linking supply and demand and strengthening the capacities of companies.

Source: Mexico Now

(https://mexico-now.com/queretaro-starts-2021-with-an-active-aerospace-investment-portfolio/)

E-Group, a company of the El-Mann family, will invest 25 billion pesos (mdp) in the construction of the T-MEC Park complex, a logistics, industrial, railway and commercial service center neighboring to the Santa Lucia airport.

The T-MEC Park is a project that will generate more than 65 thousand jobs and will contribute to the consolidation of the development of the State of Mexico, according to the developers.

The park is one of the 29 projects announced within the second private investment package of projects to support the economic reactivation, presented las November by President Andrés Manuel López Obrador and the Treasury Minister, Arturo Herrera.

On that occasion, it was reported that the investment amount would be of $13,020 million pesos.

Max El-Mann Arazi, President of E-Group; Charles El-Mann Metta, deputy director of the group; Tufic Neme Martínez, Director of Marketing, and Charles El Mann Fasja, Director of Parks México, presented the logistics and trade center located in Nextlalpan to the Governor of the State of Mexico, Alfredo del Mazo.

The state president reported the meeting with the El-Mann family via Twitter.

The E-Group executives explained that the competitive advantages of the State of Mexico are its geographical location and its wide road network, airport and rail infrastructure; in addition, they highlighted that it is the second most important economy in the country, and being the most populated state, it is part of the largest consumer market nationwide.

T-MEC Park, a logistics project similar to the one presented in the state of Querétaro, is another great investment made by the Elman Group in Mexico.

In the presentation of the T-MEC Park, Charles El Mann Fasja commented that the real estate work is part of the actions that seek to maintain the balance between health care and continue to promote the economy of the State of Mexico.

It was also revealed that another of the reasons to start this project is that the State of Mexico has a qualified workforce, an outstanding educational system and a stable environment that generates confidence for investment, which has contributed to consolidate the entity as an exporting power, allowing it to occupy the eighth place at the national level and the third among non-border states.

Governor Del Mazo thanked the leaders of the Elman Group for the trust placed in that entity.

The president pointed out that the close work between the state government and the industry is a strategic alliance that will allow a rapid and solid economic recovery of the entity, and with this they also contribute to the economic growth of the country.

Source: Forbes

(https://www.forbes.com.mx/negocios-familia-el-mann-25-mil-mdp-centro-logistico-t-mec-park/)

Ohio-based auto parts maker The Timken Co. recently announced the start of its new factory in Mexico.

Along with the new Timken plant, Mexico-based Envases Group plans to open a $35 million aluminum can production and distribution facility in central Texas.

The two projects will create around 220 jobs in manufacturing, logistics and transportation.

The Timken Co.’s (NYSE: TKR) new manufacturing facility is in the central Mexican city of San Jose Iturbide. The factory makes tapered roller bearings for the transportation and industrial machinery industries.

“Our new facility builds on our manufacturing strategy to serve customers where they need us across the world,” Timken Executive Vice President Christopher Coughlin said in a release. “It will help us advance our global bearing leadership by providing a high level of value and service for our customers in the region and globally.”

Timken did not disclose how much the new factory cost but said it expects to have 100 employees at the facility by the end of March.

The Timken Co., founded in 1899, is based in North Canton, Ohio. The San Jose Iturbide facility is the company’s first manufacturing plant in Latin America.

Timken employs more than 18,000 people globally. The company has plants and offices in 42 countries, including North America, Europe, Asia and Africa.

Envases Group, a packing producer based in Cuautitlán Izcalli, Mexico, recently chose Waco for a 450,000-square-foot facility that will open by the end of 2021, creating 120 jobs.

“The Waco operation will focus on aluminum beverage containers commonly used for soft drinks, beers, energy drinks, teas and non-carbonated beverages,” the company said in a statement. “It represents a sizable, first phase investment that allows the company to bring in its first production line to service the U.S. market.”

Envases Group was founded in 2006 and has 66 factories and seven distribution centers around the world.

Source: Yahoo! Finance

(https://finance.yahoo.com/news/auto-parts-maker-timken-co-220419592.html?guccounter=1)

The Mexican government is trying to entice Ford Motor Company to consider relocating some of its operations to Mexico, a senior official said on Tuesday, after the U.S. carmaker announced the closure of three plants in Brazil.

Mexican Economy Minister Tatiana Clouthier told reporters that officials were considering some kind of overture to Ford .

“We’re now looking to make Ford an offer,” Clouthier said.

She did not go into any further detail, but said the government was “flirting” with the company.

“What do you need? How do you need it?” she said, referring to the automaker and suggesting that the government wanted to better understand tax or other incentives Ford may require in exchange for relocating some of its manufacturing operations to Mexico.

For decades, carmaking has been a key part of Mexico’s manufacturing sector.

Ford’s press office did not immediately respond to a request for comment.

Earlier this month, Ford announced plans to shutter its three plants in Brazil this year while taking pre-tax charges of about $4.1 billion as the coronavirus pandemic pushed the company to reevaluate its manufacturing capacity.

Company officials said at the time that the decision was part of a previously announced $11 billion global restructuring. (Reporting by Sharay Angulo; Editing by David Alire Garcia and Stephen Coates).

Source: Reuters

(https://www.reuters.com/article/mexico-ford-motor/mexico-flirting-with-ford-after-us-carmaker-bails-on-brazil-idUSL1N2JV009)

On December 23th 2020, it was published in the Federal Official Gazette (Diario Oficial de la Federración, DOF) the resolution by which the Council of The National Minimum Wages Commission (CONASAMI) of Mexico states de general and professional minimum wages that will come into force since January 1^st 2021.

The National Minimum Wages Commission (CONASAMI) of Mexico approved a salary increase for next year of 15%, starting January 1^st 2021.

The minimum wage will increase from $ 123.22 MXN pesos to $ 141.70 MXN pesos per day in most of the country, while in the Free Zone of the North Border it will increase from $ 185.56 MXN pesos to $ 213.39 MXN pesos per day.

In addition, two professions will be integrated into the list of professional minimum wages, which are: domestic workers, with an increase of 25%; with respect to the general minimum wage in the rest of the country in force in 2020. The other profession is agricultural worker, who will receive a 30% increase over the current minimum wage.

With this increase, Mexico climbs eight positions internationally in terms of the minimum wage, ranking 76 out of 135 countries. The aspiration in the current administration is to achieve a position among the first 60 countries with the highest salary perceptions.

For more information please visit: http://dof.gob.mx/nota_detalle.php?codigo=5608587&fecha=23/12/2020

The UK has signed a continuity trade deal with Mexico worth more than £5 billion to avoid tough tariffs on exports after Brexit, the government has announced.

International Trade Secretary Liz Truss said the agreement will allow the two countries to “take our trade to new heights” as it seeks to negotiate a further trade deal next year.

The UK-Mexico Trade Continuity Agreement is expected to benefit the automotive, pharmaceutical, textiles, agriculture, food and drink sectors, as well as other manufacturing industries.

The deal will keep tariffs on car and UK drinks exports at 0%, saving tens of millions of pounds in duties which would have been applied under World Trade Organisation terms.

The countries have also agreed to start negotiating a new free trade agreement next year which hopes to go further than the existing deal.

Ms Truss said: “This deal supports a trading relationship worth more than £5 billion and locks in access to each other’s markets.

“We look forward to working together with our Mexican friends and allies on a new and ambitious trade agreement in 2021. This will allow our two countries to go much further in areas such as data, digital trade, investment, intellectual property and services.

“This is also the seventh trade deal we’ve secured with a member of CPTPP, the grouping of 11 dynamic economies around the Pacific. So, it’s another really important stepping stone toward the UK joining CPTPP, and I look forward to making our application to do just that early next year.

“Together we’ll enjoy even more success by seizing this opportunity to take our trade to new heights. International trade will help us to overcome the challenges of coronavirus and drive economic growth across our United Kingdom.”

It comes as the UK continues post-Brexit trade talks with the European Union – with just over two weeks until the transition period ends.

It is unclear whether a deal will be struck as the clock runs down and crucial issues remain to be resolved.

Three topics are yet to be agreed on – governance, the ‘level playing field’ and fisheries.

It is understood concessions may be being made by both sides in a last-ditch attempt to come to a deal.

Source: LBC

( https://www.lbc.co.uk/news/uk-signs-post-brexit-trade-deal-mexico-avoid-no-deal-tariffs/)