Weekly Report 102

GENERAL SITUATION IN MEXICO

Weekly Review #102 I April 27, 2022

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MANUFACTURING INDUSTRY NEGOTIATIONS TO BUILD A SEMICONDUCTOR PLANT IN TLAXCALA

Javier Marroquin Calderon, Secretary of Economic Development of Tlaxcala, reveals that negotiations are underway for the construction of a semiconductor plant in the state to supply the country’s automotive industry.

“We have been in contact with a semiconductor company interested in setting up in the state of Tlaxcala, and we are currently in the negotiation process and everything that is involved for its arrival,” says the official of the government headed by Lorena Cuellar Cisneros, a member of the Morena party.

The semiconductor industry has been experiencing problems since the beginning of the COVID-19 pandemic due to high demand from the automotive industry and the manufacturing of household appliances and computers, he says.

The approach with semiconductor companies is important to detonate investment, which is long term and not short term, says Marroquin Calderon.

“We have also been seeing companies in the automotive industry for the supply of plants installed in our country,” says the Secretary of Economic Development of Tlaxcala.

According to a Barclays report, automakers were exposed to semiconductor shortages during the COVID-19 pandemic because they did not anticipate the sharp upturn in demand.

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MANUFACTURING INDUSTRY

The consultancy says chip shortages have been a problem throughout the COVID-19 pandemic, so the Russian military’s invasion of Ukraine threatens to extend the problem for months longer.

The textile industry is of utmost importance for Tlaxcala’s economy, and 50 automotive supply companies are supported, says Javier Marroquin Calderon.

Work is also being done to attract new investments in the automotive sector to the state of Tlaxcala, which offers maritime connectivity with Veracruz through 400 kilometers of Kansas City and Ferrosur trains, says the Secretary of Economic Development.

Orders from semiconductor assemblers are smaller compared to those placed by electronics manufacturers.

The semiconductor shortage results from the rapid recovery in demand, which clashes with supply schedules and disruptions from natural disasters, the financial institution adds.

“The lead time for semiconductors is currently 21.9 weeks; some parts such as power management components is of 25 weeks, and microcontrollers is 38 weeks, which are critical in the automotive supply chain, report much longer lead times,” the British bank expounds in its report.

Ukraine is the source of 70% of the neon gas output, which is needed in the production of semiconductor chips, according to TrendForce.

SOURCE: Forbes Mexico

He adds that another of the advantages for industrialists is the 2,400 kilometers of highways, which make it the heart of Mexico: “We are privileged in connection with different states, and that gives us the plus that they are interested in investing in our state.”

In the first 100 days of the government of Lorena Cuellar Cisneros, investments for 4 thousand 663.5 million pesos were received, and a Walmart distribution center also arrived, which is the second largest in Mexico and the first in technology, adds the Secretary of Economic Development of the State of Tlaxcala.

Companies have invested in several expansions, and there are important capitalizations that help generate employment in Tlaxcala, he emphasizes.

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MANUFACTURING INDUSTRY

PANASONIC WORKERS IN MEXICO ELECT INDEPENDENT UNION, DEFEATING TOP LABOR GROUP

Workers at a Panasonic auto parts plant in northern Mexico elected an independent union this week, marking another defeat for one of the country’s biggest labor organizations as Mexico seeks to strengthen worker rights in line with a new trade deal.

Union SNITIS, which grew out of worker dissatisfaction with traditional labor groups in the northern state of Tamaulipas, won 75% of ballots in a two-day election in which 2,150 people were eligible to vote, Mexico’s federal labor center said late on Friday.

The competing group, SIAMARM, part of the 86-yearold Confederation of Mexican Workers (CTM), won 25%

SOURCE: Forbes Mexico

at the factory, which makes car audio and display systems, mostly for U.S. and Canadian markets.

The result follows other recent votes against CTM at a General Motors plant in the central state of Guanajuato and at auto parts plant Tridonex in Tamaulipas, both sites that faced U.S. scrutiny for potential worker rights abuses under the United States-Mexico-Canada Agreement (USMCA) trade deal, which came into force in 2020.

SNITIS won the Tridonex election in February with nearly 87% of the vote, in what union leaders hoped would set off a ripple effect.

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MANUFACTURING INDUSTRY

“This has been overwhelming, like the result at Tridonex, and we hope it’s the same way at all factories that continue to join this new era of independent unionism,” SNITIS founder Susana Prieto said in a social media video after the Panasonic vote results.

Panasonic said in a statement that it respected and supported its employees’ right to free association and looked forward to working with SNITIS once it is officially registered as the factory’s new union.

CTM did not immediately respond to a request for comment, and SIAMARM could not be reached immediately.

SIAMARM head Alberto Lara said on social media ahead of the vote that he would protect vulnerable workers and that his union would offer the best contract.

SNITIS last week urged the U.S. government to investigate the Panasonic plant for alleged worker rights abuses, the latest in a series of disputes seeking to leverage the USMCA to improve workplace conditions in Mexico.

This week’s union election at Panasonic stemmed from a vote last year in which workers rejected their prior union contract.

Such votes are required by a recent Mexican labor reform to end the once widespread practice of unions and companies signing “protection contracts” without workers knowledge.

SOURCE: Reuters

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KEY POINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S Morning Press Conference April 19th–26th, 2022

ENERGY • Subsidies to the payment of the electricity bill in Sonora: He confirmed that the subsidy will be maintained in Sonora and that work is being done to avoid the fact that this agreement must be extended every year and that it will have a longer extension. As soon as the proposal for the new agreement is available, it will be announced, he said. He called on the population not to waste and take care of this resource.

• Lithium: Lopez Obrador insisted that the Mexican State will manage lithium, and a public company will be created, which already has two proposed names: 1) Mexican Lithium Agency (AMLITIO) or 2) Mexican Lithium (LITIOMEX). Electricity industry and SCJN resolution: The President stated that it was an exaggeration what was published yesterday on the front page of the Reforma newspaper, which said that the President of the SCJN miscounted the votes. In this regard, he mentioned that the 11 ministers unanimously held that the votes were not miscounted yesterday. He said that the resolution of the SCJN does not suit the sponsors of the Reforma newspaper or the OXXO. He affirmed that with the declaration of the constitutionality of the LIE 2021, the CFE is strengthened.

He assured that, even with the rejection of its con-

stitutional reform, the CFE will now be able to put all its plants into production, which it could not do before, and dispatch energy; going from 38% to 55% is what was achieved in the first legal stage.

ECONOMY • Inflation: Regarding inflation, President Andres Manuel Lopez Obrador stated that the Mexican economy continues to generate jobs, and the peso remains stable. He announced that a program will be put in place to address inflation and that the current policies to support the countryside and producers will be emphasized. He stated that food is where the public sector has less control, and that is why it is there where we have to act by seeking agreements with producers. It is necessary to be self-sufficient in food, and that is what we are trying to do: strengthen production and provide facilities so that there is a free market, there are no tariffs, and it is possible to acquire what is convenient abroad, especially products of the basic food basket.

• Investments in the Southeast: President Lopez Obrador stated that investment and installation of companies in the country’s southeast are being promoted; public investment is around 30 MMDD, which implies development in Veracruz, Oaxaca,

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KEY POINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S INTERNATIONAL • Central America Tour: He announced that the trip to Central America will begin in Puebla on May 5.

Afterward, they will go to Guatemala on a commercial plane and then travel to El Salvador, Honduras, Belize, and Cuba, on a military plane.

• United States: When asked about the statements made by former President Donald Trump, President Lopez Obrador responded that he has a good relationship with the former President. He also mentioned that all Latinos residing in the United States should protect each other and vote against candidates who have anti-Latino policies.

Campeche, Chiapas, and Quintana Roo. Today a meeting will be held with business people from the US, Canada, and Mexico to promote investment in the Isthmus through the creation of industrial zones. The meeting with US and Canadian business people will be attended by Ambassador Ken Salazar, as well as governors and representatives of the southeastern states. Ten industrial parks will be created throughout the Isthmus corridor, which will be presented to US and Canadian investors.

• Brewery Plant in Veracruz: Andres Manuel Lopez Obrador indicated that private investment is being promoted. For example, in Veracruz, the Constellation Brands brewery will be installed on a 300 m3 plot of land in the community of Vargas (Port of Veracruz), investing around 1,300 MDD and will be concluded in 2024.

ENVIRONMENT • Environment: The President assured that his government will not give any concessions to companies that damage the environment; he gave the entry of transgenic corn and fracking as an example.

• Mayan Train: The President mentioned that the environmentalists who are against the Mayan Train are not authentic, and those corrupt technocrats put an end to the passenger railroad. When speaking of real environmental problems, he mentioned the Calica mining company, where they are no longer allowed to extract material and could be closed down and converted into a tourist park, or the government could buy the land.

• He indicated that he would not participate directly in the meeting with the environmentalists but would designate a representative. He commented that he would receive in the National Palace the celebrities that appeared in the video, but not all of them from the CIDE, Aguilar Camin, or Krauze’s groups.

• Lopez Obrador assured that he respected the judges’ decisions regarding the suspension of Section 5. He specified that there are no injunctions filed

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KEY POINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S by those directly affected; they are filed by other people, such as the supposed environmentalists that suddenly appear.

• Pig farms: When asked about the actions taken by SEMARNAT regarding the existing situation in pig farms. He emphasized that the Peninsula and all its environmental wealth must be taken care of, seeking balance in the area and promoting sustainable development.

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• FREE SPEECH • Twitter: The President expressed his desire for Elon Musk to “clean up” Twitter after his acquisition, specifically referring to bots, the purchase of advertising without transparency, censorship, and manipulation.

• Journalists: He detailed the properties of Carlos Loret de Mola and his family. He mentioned that the great majority of journalists live with very little income, and that is why 25% of the advertising budget will be destined to support these journalists in order to grant them social security and pensions. He also announced the creation of a committee with journalists to act as advisors.

• Social networks: When asked by a reporter about the campaigns against infrastructure projects, the President mentioned that he favors freedom of expression. However, he pointed out that before, there was no replication, and now with the “blessed social networks,” there is more possibility to communicate, although there is more manipulation.

SECURITY • Public Security in Veracruz: Admiral Rafael Ojeda, head of the Secretariat of the Navy, informed that most crimes are decreasing in Veracruz, while transportation theft is on the rise. He assured that

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there is a deficit of 22 575 elements of local law enforcement with respect to what the UN suggests.

Monthly Security Report: The Secretary of Public Security, Rosa Icela Rodriguez, presented the following data: we are at the lowest levels of the last 7 years; in March, there was a reduction in most of the federal crimes. Regarding the prevention of toll booth takeovers, the Plan Caseta Segura (Safe Tollbooth Plan) was implemented.

Drug trafficking: The case of the arrest of Ewardo Galindo “El Bolqueso,” a Colombian drug trafficker in Mexico by the Secretary of the Navy, who was deported yesterday thanks to international cooperation, was presented.

Violence against women: The President warned that the origin of this problem is the neoliberal model that prevailed in the country for a long time and that implied a loss of moral and spiritual values. When a reporter mentioned that he visits baseball stadiums but not the victims’ families, he was upset and dismissed the accusation.

Debanhi Escobar case: The President assured that the case is being investigated. He said that the governor of Nuevo Leon authorized a federal government team to collaborate in the investigation. Lopez Obrador pledged to provide information on the crime at the appropriate time. He announced that every Thursday during the conference, there will be a report on homicide and murder cases in the country; the section will be called “Zero Impunity.”

Toll booths: The President pointed out that one of his government’s main objectives is to put an end to corruption, noting that on this particular issue, they have been able to combat it: the toll booths taken in Nayarit, Sinaloa, Puebla, and Hidalgo have already been freed.

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NEWS BY STATE

BAJA CALIFORNIA The State of Baja California remains lowrisk or green light with 126 active cases in the past 14 days and one new case in the past 24 hours. The vaccination plan to the adult population continues this week in all municipalities with the AstraZeneca and Pfizer application. The Governor of Baja California announced that starting this Monday, April 25, after nine weeks as low-risk, the use of face masks will be optional in open and closed spaces due to a notable drop in infections. The Scientific Committee announced that the sanitary filters and protocols continue for daily activities and massive events, where the sectors may optionally request or not the use of the face mask to allow access to their users and workers.

SONORA The State of Sonora is considered a lowrisk or green light. Official reports confirm 0 new cases in the last 24 hours.

This week, the vaccination plan continues with the first, second, and AstraZeneca booster application to the adult population. The Governor of Sonora commented on the large investment of 2.1 billion dollars in the start of the Gas Liquefaction Project for the State, which will fundamentally transform the economy of Guaymas, with benefits such as the generation of more than 3 thousand jobs, security, and energy independence.

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NEWS BY STATE

NUEVO LEON Nuevo Leon eliminates the mandatory use of face masks indoors. However, the mask will continue to be mandatory at the airport, bus stations, hospitals, schools, retirement homes, public transport, pharmacies, and daycare centers.

COAHUILA The Secretary of Health in Coahuila, Roberto Bernal, announced that the measures on the use of face masks in work centers with specific conditions will be analyzed this week, and the conclusions must be presented the following week.

TAMAULIPAS After the approval of the Secretary of Health of the Federal Government of the fourth dose against COVID-19, the institutions of the Secretary of National Defense (Sedena), ISSSTE, and IMSS, as well as the State Secretary of Health, will apply this vaccine between the population of the southern zone of Tamaulipas.

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NEWS BY STATE

GUANAJUATO The automotive industry is of major importance in Guanajuato, where around 11% of the population is employed in the sector. The recovery of manufacturing employment advanced during the second month of 2022 under the main impulse of growth in the automotive industry. According to data from the National Institute of Statistics and Geography (INEGI), the figure represents more than one-fifth of the personnel employed in the sector. In February 2022 and with seasonally adjusted data, the Monthly Manufacturing Industry Survey (EMIM) showed that the total employed personnel in the manufacturing sector increased 0.4% at a monthly rate. The number of workers grew 0.7% and the number of employees 0.2%. Of the 21 activities that make up the manufacturing industry, 16 reported an increase in payroll. Among them, the following stand out: the manufacture of transportation equipment, which reported a monthly increase of 1.4%. Others are the manufacture of computer equipment, communication and electronic accessories with an increase of 1.3%. Meanwhile, the manufacture of metal products and machinery and equipment reached 1.1% and 1.0%, respectively. These four activities account for around 40% of the employed personnel in the manufacturing industry.

JALISCO

Jalisco Governor Enrique Alfaro presented the new offices of Casa Jalisco in Washington. The objective is to generate a greater promotion of the state and a greater attraction of investments. The office will be in operation as of May and will be located near the White House.

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NEWS BY STATE

STATE OF MEXICO The Secretary of Health of the State of Mexico informed that during the last day, no new cases of COVID-19 were reported, a trend that has been occurring mainly on Mondays for at least three weeks n the last report, the state also informed that 110,734 people have overcome COVID-19 and have received their health discharge, after the efforts of the different health systems in this entity.

CDMX The federal government announced the opening of registration for those 12 years of age and older to receive the COVID-19 vaccine on Tuesday. The Undersecretary of Prevention and Health Promotion, Hugo Lopez-Gatell, informed that not only girls and children with comorbidities but also all healthy and unhealthy children 12 years old could register for their vaccination.

The official presented a balance on vaccination progress against the coronavirus in the country and pointed out that an overall progress of 87% has been achieved.

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ECONOMIC RECOVERY

ECONOMY AND INVESTMENTS IN MEXICO • Governor Alfredo Del Mazo announced the investment and reinvestment projects of 12 industrial parks of CONCAEM, which will generate almost 30 thousand new jobs in the State of Mexico.

• Kohler laid the first stone of its fourth plant in Nuevo Leon; it will invest $200 million dollars and will generate around 1,600 jobs in the following years.

• LG Magna e-Powertrain confirmed that it will build a plant in Ramos Arizpe, Coahuila, which will invest 300 million dollars; construction is scheduled to be completed in 2023.

• Dentalia announced its investment and expansion plan to continue improving the dental health of

SOURCE: El Economista

Mexicans. With an investment of more than 95 million pesos, the company plans to increase its service capacity to more than 1.5 million appointments per year, as well as to open, remodel and relocate 10 dental clinics.

• With an investment of 200 million dollars, Kuka Home Mexico began construction of its new industrial plant in Nuevo Leon.

• Constellation Brands confirms an investment of $1.3 billion dollars for a beer plant in Veracruz.

• Amazon will open three delivery stations in Nuevo Leon, which will generate 1,500 jobs (in the state, it already has two ‘stations’ and 600 jobs).

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TOWARDS THE “NEW NORMAL”

DISTRIBUTION OF DEATHS PER STATE DUE TO THE PANDEMIC

INFORMATION UPDATED ON APRIL 25, 2022 AT 19:00 HRS LOCAL TIME.

NEW CASES REPORTED: 140

SOURCE: https://www.gob.mx/salud/

CONFIRMED CASES: 5,733,925

NEW DEATHS REPORTED: 5

CONFIRMED DEATHS: 324,134

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INCREASE OF CONFIRMED CASES SINCE THE FIRST REPORT MAP WITH THE DISTRIBUTION OF THE INCIDENCE RATE OF ACCUMULATED CASES OF COVID-19 BY ENTITY OF RESIDENCE.

National 3.10

0 to 10.0 (32 states)

40.1 to 50 (0 states)

10.1 to 20 (0 states)

50.1 to 60 (0 states)

20.1 to 30 (0 states)

60.1 to 70 (0 states)

30.1 to 40 (0 states)

>70 (0 states)

Elaborated by Prodensa with information from the Health Ministry of Mexico

PANDEMIC’S SITUATION IN THE WORLD • As of April 25 , 2022, globally there have been reported 507,501,771 confirmed cases (10,994,232 new cases since last week´s report) of COVID-19 and 6,220,390 deaths (43,036 new deaths*). https://COVID19.who.int/

SOURCE: https://www.gob.mx/salud/

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TOWARDS THE “NEW NORMAL” INCIDENTS OF CONTAGIONS IN THE POPULATION

BY REGION AS OF APRIL 25

DEATH INCIDENTS IN POPULATION

BY REGION AS OF APRIL 25

SOURCE: https://www.gob.mx/salud/

LABOR

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ALVARO GARCIA HR, Vice President

HEALTHY WORKPLACES April 28 is a relevant day for employers to commemorate the World Day for Safety and Health at Work. Unions and workers’ organizations also celebrate the International Day for Dead and Injured Workers.

Health promotion at the workplace is high priority attention for many organizations. As indicated by the World Health Organization (WHO), the health of workers is the promotion of the highest degree of physical, mental, and social well-being of all the people who collaborate in companies. Ensuring healthy working environments in the world of work is a key task.

A good way to promote healthy work environments is to have a strong Health and Safety Culture (HSC). An HSC is built through the meaningful involvement of workers in the ongoing improvement of safety and health at work. With a strong HSC culture, workers feel comfortable raising concerns about possible risks, and management is proactive in collaborating with workers to find appropriate, effective, and sustainable solutions.

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