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AN LUIS POTOSI, Mexico – To reach productivity benchmarks at its Mexico factory, BMW AG will embrace a new and innovative supply chain and logistics plan.

The German luxury maker won’t simply transfer its supply base from its other North American factory, which opened 22 years ago in Spartanburg, S.C. And it won’t demand that suppliers serving the South Carolina plant set up shop in Mexico, says Oliver Zipse, BMW board member for production.

Instead, it will create a new North American supply base.

“We will see all the latest state of the art here,” Zipse promised.

Those innovations will include:

• Assembly of parts modules for sequential delivery by BMW employees, operating apart from the vehicle production line.

• A GPS-based logistics web “geo-fence” that will track components coming into the plant and alert BMW about delays or problems.

• A nearby supplier park that can ship products in sequence as they are needed.

The factory will begin production in 2019, making BMW’s best-selling car in the United States, the 3-series sedan. It will be capable of building any of the automaker’s rear-wheel-drive vehicles that use BMW’s new flexible Cluster Architecture on one line. At capacity, the plant will be able to produce 150,000 vehicles annually and has been designed for easy expansion, Zipse says. It will include body and paint shops and an assembly line, but not metal stamping. The press shop will be outsourced.

The Mexico factory also has been designed so components come in at one end of the plant — a logistics advantage over the Spartanburg layout. The South Carolina plant layout has evolved over the last 22 years as the plant expanded. It now has what the company calls “fingers” of activity protruding along three corridors for 80 percent just-in-time deliveries to the assembly line.

In Mexico, BMW has the luxury of making parts delivery more streamlined from the beginning.

“You will have a substantial amount of direct assembly, where trucks end up at the delivery line,” Zipse said.

The venture also will make BMW a bit chummier with General Motors. The 300-acre San Luis Potosi site is adjacent to an established industrial park where many suppliers make components to serve a nearby GM plant, in operation since 2009.

Spartanburg does not have an adjoining supplier park, or even one in the near vicinity. And when that plant started from scratch in 1994 making the 3-series sedan, it also did not have the luxury of taking advantage of a neighbor’s established local supply chain. Compared with Mexico in 2016, Spartanburg of 1994 was a remote spot on the North American automotive supply chain map.

BMW began the search for a second production site in 2011, when the German automaker foresaw the global car market expanding quickly. BMW has ridden the wave of that market growth since launching North American manufacturing. Spartanburg started with the capacity to build about 70,000 cars a year. It is now the company’s largest auto plant, with expectations to produce 450,000 crossovers this year.

By comparison, with an initial capacity of 150,000 vehicles a year, San Luis Potosi is beginning at more than twice the scale that Spartanburg had.

MEXICO CITY (Reuters) – Mexico has imposed provisional duties on flat-coated steel imports from China and Taiwan as part of an anti-dumping investigation, the government said on Friday, in its latest move to protect the Latin American nation’s steel industry.

In a statement published in the government’s official gazette, the economy ministry said the duties on the steel from Taiwan would be for $0.563 per kg.

For China, the duties were set at varying levels for certain companies: $0.4385 per kg for Tangshan, $0.1926 per kg for Baoshan Iron and Steel Co , $0.3468 per kg for Beijing Shougang Cold Rolling Co, $0.4188 per kilo for Shougang Jingtang and $0.4385 per kg for the other exporters.

In recent months, Mexico has taken several steps to protect its struggling steel industry, including new import duties, anti-dumping quotas and enhancing customs controls to enforce the quotas.

The investigation was requested by the Mexican unit of steel producers Ternium, the government said.

Kansas City Southern’s operations in Mexico have experienced shipment delays since July 11 due to teacher protests occurring there.

The protests are directed towards Mexico’s government, but have occurred on or near Kansas City Southern de México S.A. de C.V. tracks stopping regular public freight rail transportation. Other Mexican railroads and transportation companies also are affected by the protests, according to a press release.

A southern line from Lazaro Cardenas through Morelia to Toluca is “impassible,” according to the company’s website. This has caused delays in Sanchez, Monterrey, Escobedo and Queretaro.

It is not possible to estimate the financial impact, if any, of the protests will have on the Kansas City-based rail company (NYSE: KSU) at this time, according to the release.

However, Kansas City Southern’s Mexican operations are a critical component of the company’s business. About 48 percent of the company’s annual revenue came from Mexico in 2015, according to the company’s annual report.

There is no resolution date to these interruptions, but the companies impacted have requested the relevant union and governmental authorities intervene.

Kansas City Southern, which is ranked No. 10 on the Kansas City Business Journal’s Top Public Companies List, is a transportation holding company headquartered in Kansas City. It has investments in the U.S., Mexico and Panama.

Michelin executives say a plant under construction in central Mexico will have no impact on South Carolina operations.

The French tire maker announced plans to build its 21st North American plant in Leon, Guanajuato, to produce tires for passenger cars and light trucks.

The $510 million plant is expected to commence production in late 2018 and initially make up to 5 million tires a year to supply auto factories in Mexico and the North American consumer market, according to Michelin.

Stephanie Tarbet, a spokeswoman for Greenville-based Michelin North America, said Tuesday that the Mexican plant won’t take anything away from the company’s operations in South Carolina.

In a statement to The Greenville News, she called the plant “good news for our company in Mexico, North America and globally.”

Tarbet said the Mexican plant would be part of Michelin North America and report to its president, Pete Selleck, in Greenville.

In a separate statement Monday announcing its second Mexican plant, Michelin said it chose the location because it’s a three-hour drive from 18 auto factories and that most of the tires made at the plant would be sold to automakers.

Being close to those customers will allow faster and more cost-effective delivery of product with less carbon emissions, Michelin said.

Numerous automakers have announced plants in Mexico in recent years, including BMW, which said last month it would make its 3 series vehicles at a $1 billion factory in San Luis Potosi beginning in 2019.

Michelin already employs about 580 people in Mexico, at its Mexican headquarters and a tire plant in Queretaro, according to a company fact sheet.

Michelin numbers its South Carolina workforce at 9,400, far more than any other U.S. state.

The bulk of those employees are at nine plants in Anderson, Greenville, Spartanburg and Lexington counties.

Michelin last year suspended operations at its earthmover tire plant in the Anderson County community of Starr, citing a slowdown in the global market for the giant tires.

Michelin says it allocated $2.1 billion for capital improvements in South Carolina over the past five years, 75 percent of what it spent in the entire United States over the period.

TORONTO — Bombardier Aerospace and its union have agreed on a plan for cutting 200 positions at the company’s Q400 manufacturing operation in Toronto so some work can be outsourced to other countries.

Some of the Bombardier employees currently in those positions will be offered training and transfer opportunities within the company. Others will be offered retirement packages under the agreement with Unifor.

A Bombardier spokeswoman says the agreement is part of a five-year plan, announced in November, to make the company’s products more profitable and competitive in the long term.

Bombardier plans to make the Q400 wings in Mexico and cockpits in China, for final assembly in Toronto.

The Toronto operation currently has about 3,500 employees — including 1,400 working on the Q400, a turboprop used by commercial airlines around the world. Toronto-based Porter Airlines and WestJet’s Encore service are among the Q400’s customers.

Besides the Q400s, Bombardier does final assembly of the Global Express 5000 and 6000 business jets in Toronto. The Downsview plant is also scheduled to work on the longer-range 7000 and 8000 Global Express jets.

Bombardier spokeswoman Marianella de la Barrera said it’s too soon to say how many of the Q400 positions will be eliminated through retirements and how many will be dealt with through retraining and other mitigation measures.

“We can’t speculate until we’ve done the exercise with the union,” de la Barrera said Monday.

Scott McIlmoyle, president of Unifor local 112, was unavailable for comment.

The Associated Press

MEXICO CITY.  Mexico’s ubiquitous Pemex gas stations now have competition along the country’s highways and city streets for the first time in nearly eight decades.

Two companies have collectively opened three gas stations under their own brands, breaking one of the state-owned petroleum companys last monopolies. Opening the retail sector to competition was part of energy reforms passed in 2014.

Mexicos Hidrosina opened a re-branded Pemex gas station under its own name this week in Mexico City and Mexican company La Gas opened a station in Campeche and another in Merida. Both will sell Pemex gasoline.

With the collaboration of Pemex we signed an agreement to use a different brand and test the success that may or may not work for the clientele,” said Victor Ruiz Iriarte, director of operations for Grupo Hidrosina.

Hidrosina was founded in 1992, and as a concessionaire has since operated more than 30 gas stations in Mexico City and the rest of the republic under the Pemex name.

This is the first test we want to do with 20 stations this year and next year in Mexico City, Ruiz Iriarte added.

U.S.-based Gulf Oil announced it would open its first four gas stations in Mexico between June and July.

Mexicos oil industry was nationalized in 1938, but recent reforms aim to attract private investment to bolster the countries falling crude production.

The Chinese company at the helm of a consortium that won a $3.75 billion high-speed rail contract last year which was later revoked will be compensated almost 20 million pesos ($1.31 million), a transport ministry official said on Thursday.

The contract, for which the consortium led by China Railway Construction Corp Ltd (CRCC) was the only bidder, was abruptly revoked last fall shortly after it was awarded.

Earlier this year, after the Mexican government relaunched the bid and then canceled it for a second time citing budget cuts, the CRCC gave the SCT a list of costs incurred during the tender and requested compensation.

Yuriria Mascott, a deputy minister at Mexico’s Communications and Transport Ministry, told reporters on Thursday that the government had completed an analysis of CRCC’s costs.

“The legal team informed me that what is to be expected is almost 20 million (pesos)” in compensation, she said.

According to previous report by China Daily, Luis Videgaray Caso, Mexico’s secretary of finance and public credit, announced that the “indefinite suspension” was the result of falling oil prices and the need to cut public spending. The federal government derives about a third of its revenue from the oil sector. The minister added that the project to build a $9.2 billion international airport in Mexico City would not be affected.

“We feel really sorry about the decision. Chinese companies have invested much in bidding for the project,” said China’s National Development and Reform Commission (NDRC) in a statement.

China hopes the Mexican government will deal with the problems caused by the suspension of the project appropriately, effectively protecting Chinese companies’ legitimate rights, and adopt active measures to promote pragmatic cooperation between the two countries, the statement said.

“We note the Mexican government’s decision, and China hopes the Mexican government can properly deal with subsequent problems,” a Chinese foreign ministry spokesperson told Xinhua News Agency.

Also Mexico needs to “value and properly cope with the huge manpower and money Chinese enterprises invested in the project bid, and carry out measures for further bilateral cooperation,” said a spokesperson for the National Development and Reform Commission, China’s top economic planning body.

Gov. Scott Walker is planning to lead a Wisconsin business development mission to Mexico next month.

The trade mission, scheduled for June 12-17 with a first stop in Mexico City, is expected to be announced by Walker in Milwaukee Tuesday at the 52nd Annual International Trade Conference of the Metropolitan Association of Commerce World Trade Association at the Wisconsin Center.

“We will promote Wisconsin’s strong business climate, outstanding workforce and key industry sectors as compelling assets for successful business operations in Wisconsin during our trip to Mexico, just as we did during our trips to Europe, Canada, and the United Kingdom last year,” Walker said in a statement. “The state of our state is strong, and this is the perfect time for businesses in Mexico to consider investing in Wisconsin.”

The trade mission is part of Wisconsin’s ongoing effort to increase exports and encourage international companies to invest in the state, Walker’s office said.

Mexico is Wisconsin’s second-largest export destination, with state companies sending nearly $3 billion in goods to the country in 2015. Canada is first with more than $7 billion.

May 4, 2016 El Financiero – Mexico fell nine places in the Direct Foreign Investment Confidence Index, according to HV Kearney. It now ranks No. 18 on the index, its worst record since 2012.

www.elfinanciero.com.mx/economia/mexico-es-el numero-18-en-confianza-de-inversionistas.html