Since 1970, Weston, Wisconsin-based Wise Harness Solutions has assembled wire harnesses, battery cables and control panel assemblies to support its customers’ wire harness needs. The company prioritizes offering high-quality products, delivered on-time, at an excellent value and sees its expansion into Mexico as one more way to deliver upon this promise.

The decision to expand into Mexico came as Wise Harness Solutions executives sought a solution to the ongoing labor shortage plaguing manufacturers across the U.S. The company had found itself struggling to grow its Wisconsin workforce to support the demand from its customers. With more of its competitors moving into Mexico, the company recognized that the lack of a Mexican presence, combined with this workforce shortage, would make it more difficult to provide the highest quality products, on-time delivery, at the competitive price its customers expected.

Michaud adds, “We selected Empalme as the location for our new facility due to its proximity to the U.S. and the availability of an experienced workforce.” Empalme is a mere four-hour drive to the U.S. border. However, it’s location along the sea of Cortez, the second largest port on the Pacific Coast, provides manufacturers with additional options for cost-effectively reaching global customers in a timely manner.

The 25,000-square-foot facility will begin producing complex OEM vehicle wire harnesses, battery cables and control panels by early April 2021. Wise Harness executives expect that the additional capacity this facility affords will help the company to bid on more projects, allowing for additional expansion in product offerings over the next few years.

Source: CISION PR Newswire

( https://www.prnewswire.com/news-releases/wise-harness-solutions-expands-into-emplame-sonora-mexico-301254507.html)

In an arid valley in central Mexico, one of the world’s largest automotive suppliers is preparing to open a new plant to produce components for North America, underpinning the export business that has kept the country’s struggling economy ticking over.

The new Continental AG plant in Aguascalientes state should benefit from the new United States-Mexico-Canada (USMCA) trade deal and U.S. President Joe Biden’s $1.9 trillion stimulus plan to revive growth after the coronavirus pandemic.

The confidence expressed by local executives of the German parts maker echoes growing optimism among analysts that a global recovery will lift Mexico’s economy more than previously expected, despite ongoing weakness in domestic demand.

“We’ve got high (auto) output coming, high volumes for everyone, and that’s what we’re getting ready for,” said Ina Seterbakken, the manager of plant still under construction.

Continental expects business to revive after delays caused by pandemic-related disruptions, Seterbakken said, noting the facility was a strategic bet given Mexico’s proximity to the United States, the world’s biggest economy.

The new plant, which will employ about 1,000 people, joins a thick belt of automotive factories clustered in central Mexico, whirring with machinery focused chiefly on satisfying export demand that the market access of USMCA provides.

“If (USMCA) hadn’t been agreed, it would have really changed this country’s economy,” said Gustavo Puente, economy minister in the central state of San Luis Potosi, which recently unveiled a separate 60 million euro Continental investment.

Mexico’s economy last year suffered its worst slump since the 1930s, with gross domestic product (GDP) shrinking by 8.5%. Robust foreign demand ensured the outcome was not worse.

President Andres Manuel Lopez Obrador has resisted calls to splash out to prop up the economy, arguing that bailouts and deficit spending tend to line the pockets of the rich.

But his country has benefited from stimulus spending in wealthier countries, especially the United States, which soaks up around 80% of all Mexico’s goods exports.

The automotive industry forms the core of manufacturing output, which makes up almost a fifth of Mexico’s economy.

Buoyed by the prospect of a revival north of the border, Mexico’s government is revising up its 2021 growth forecast to 5.0-5.5%, and Finance Minister Arturo Herrera said the U.S. stimulus plan was “very important” to the country.

Private sector analysts are doing the same, with JPMorgan recently raising its 2021 estimate for the second time this year to 5.6%.

“If it weren’t for such a strong program in the United States this year, Mexico might be growing 2.5% or 3%,” said Gabriel Lozano, the U.S. bank’s chief economist for Mexico.

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Mexico has committed funds worth about 1.3% of GDP to reviving its economy, according to International Monetary Fund (IMF) calculations. In Brazil, by contrast, it is 6.2%.

Yet despite that, Mexico’s economy is expected to grow by 4.3% this year versus 3.6% for Brazil, the IMF estimates.

Export exposure is one reason.

Worth some $360 billion before the pandemic, according to U.S. official data, Mexican annual exports to the United States are equivalent to about a third of GDP. Brazil’s U.S. exports were worth under $31 billion in 2019.

The difference between Latin America’s two biggest economies also shows up in financial markets: while the Mexican stock exchange has gained 4.9% so far in 2020, the Brazilian exchange has lost 8.2%, when measured in dollars.

Nevertheless, some analysts and bosses in Mexico have their doubts. They note that appetite for manufactured goods abroad contrasts with flagging domestic demand, with Mexican fixed capital investment plummeting more than 18% last year.

How well Mexico recovers will depend in part on the government’s ability to overcome tensions with business and encourage investment in manufacturing, which could profit from a drive to regionalize supply chains away from Asia under USMCA.

Drawn to lower-cost Mexico to get a competitive edge, companies are watching nervously to see if the government’s moves to strengthen state control of the electricity market will affect energy-intensive sectors like carmaking.

“(The electricity sector) is decisive for the Mexican economy to grow steadily, but for this, the state must guarantee the principles of free competition and legal certainty,” the American Chamber of Commerce (AmCham) in Mexico said last month.

Source: REUTERS

( https://www.reuters.com/article/us-mexico-economy-analysis-idUSKBN2BB2BO )

Honda Motor Co said late Tuesday supply chain issues will force a halt to production at a majority of U.S. and Canadian auto plants for a week.

The Japanese automaker added the issue will result in some production cuts next week at all U.S. and Canadian plants, citing “the impact from COVID-19, congestion at various ports, the microchip shortage and severe winter weather over the past several weeks.”

“In some way, all of our auto plants in the U.S. and Canada will be impacted,” Honda said.

Some U.S. and Canadian plants are expected to have smaller production cuts next week, but a spokesman for Honda added “the timing and length of production adjustments could change.”

The company declined to specify the volume of vehicles impacted but said “purchasing and production teams are working to limit the impact of this situation.”

The company added when production is suspended Honda workers “will continue to have the opportunity to work at the impacted plants.” Honda workers were notified of the production cuts Monday.

Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions, said Honda typically produces about 30,000 vehicles a week in the United States and Canada.

The production issues are hitting Honda plants in Ontario, Ohio, Alabama, and Indiana. Honda said its Mexico operations have not announced any production cuts.

The chip shortage, which has hit most of the global automakers, stems from a confluence of factors as carmakers, which shut plants for two months during the COVID-19 pandemic last year, compete with the sprawling consumer electronics industry for chip supplies.

General Motors Co has cut production at many plants and warned it could shave up to $2 billion from this year’s earnings.

GM’s U.S. rival Ford Motor Co previously said the shortage could hurt 2021 profit by up to $2.5 billion and said it had curtailed production of its flagship F-150 pickup.

Source: REUTERS

(https://www.reuters.com/article/idUSKBN2B9042 )

The chairman of top Apple Inc supplier Foxconn said on Tuesday that its plant in the U.S. state of Wisconsin was a potential site to make electric vehicles, but added that Mexico was another possible site.

Asked by reporters in Taipei whether the company would produce a car with Apple, Chairman Liu Young-way said that was speculation.

Taiwan-based Foxconn, formally called Hon Hai Precision Industry Co Ltd, is the world’s largest contract electronics manufacturer.

Source: REUTERS

( https://www.reuters.com/article/idUSB9N2IW026  )

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 )

France-based aerospace company Latécoère has purchased Bombardier’s Electrical Wiring and Interconnection Systems (EWIS) business in Querétaro, Mexico.

The acquisition has an enterprise value of $45m.

The Querétaro site provides electrical harnesses and sub-assemblies required to produce EWIS systems. It has an estimated annual revenue of approximately $60m.

With this acquisition, Latécoère will be able to serve additional customers, including Airbus Canada, MHIRJ and Avcorp.

Besides expanding its customer portfolio, Latécoère will be able to boost its order book.

As part of a long-term supply agreement reached between the two companies, EWIS from this site will continue to be provided for all Bombardier platforms, including its Global and Challenger aircraft.

Latécoère chief executive officer Philip Swash said: “We are pleased to finalise this acquisition and at the same time enter a long-term supply agreement with Bombardier.

“With this transaction, Latécoère strengthens its industrial presence internationally and increase its proximity to its customers. It also signals our continued participation in the global consolidation of the aerospace industry.”

Following the acquisition, Bombardier’s remaining Querétaro operations will remain unaffected.

The rear fuselage of the Global family of business jets, including the Global 7500 aircraft is manufactured in Mexico.

Bombardier operations and operational excellence executive vice-president Paul Sislian said: “The Bombardier team looks forward to working with Latécoère toward a seamless integration as we continue to build on the successes of both our companies.”

Source: Aerospace Technology

( https://www.aerospace-technology.com/news/latecoere-bombardier-ewis-mexico/ )

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/)