Weekly Report 131

GENERAL SITUATION IN MEXICO

MANUFACTURING INDUSTRY

EXTENDING VACATIONS WILL INCREASE PAYROLL COSTS BY 2%

Labor costs will increase 2% once the reform on “de cent vacations” comes into force, said Alberto Alesi, director of ManpowerGroup for Mexico, Central Ame rica, and the Caribbean, after pointing out that it was essential for Mexico to review its legislation on the matter since even Latin American countries have had 30-day vacation periods for 50 years.

The executive said that the costs to be assumed by employers will take a year and a half on average to reach a balance; “it is a fact that (the reform) will be approved, we see that all parties in Congress are in favor of this increase from 6 to 12 days of progressive vacation, accumulated and with pay, which will increa se the total cost of labor by 2%, this in general; but (the approval) we see it well because this will help a lot to improve productivity,” he said.

It is a reality that workers are currently looking for sustainable jobs, that are in line with their values, that have a sense of belonging, and “part of this is defini tely a function of improving that sense of belonging, in the case of Mexico going from 6 to 12 would seem a lot, but if we look at Latin American countries for more than 50 years they have had 20 or 30 days of vacation,” he said.

He explained that it will depend on the sector or size of the company as to whether there is a greater impact or not, especially in small and medium-sized companies that take a little longer to adapt the legislative chan ges; “we would have to see how its implementation unfolds. If it is put into effect in January, it is impor tant to monitor the amount of employment registered in the IMSS and if this has an impact on formal hiring.

As we know, because of the pandemic, informality in creased”.

Alesi exemplified that in the technology sector, which has profitability levels of up to 60%, then 2% of the vacation cost means nothing; but in those who cannot absorb the total cost, “then we could see an impact on the final prices”.

Mexico is one of the countries with one of the shortest vacation periods guaranteed by law and, in fact, after the reform, it will still be behind the 18-day period re commended by the International Labor Organization (ILO).

Alesi, who was accompanied by the managers of ManpowerGroup’s brands: Manpower, Talent Solution and Experis IT, presented the new business strategy focused on specialized talent, since after the outsour cing reform, the different business areas suffered a strong impact.

KEY POINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S Morning

Press Conference

November 9-15, 2022

POLITICAL AGENDA

• March in defense of INE: Regarding the Presi dent’s opinion about the march held on Sunday in defense of INE. Lopez Obrador mentioned that an estimated 50-60 thousand people attended, which is a small number. He pointed out that the arguments of the march are unfounded as they re flect the conservatism and classism of the popu lation. Likewise, he invited people to march again, as he welcomed the formation of the conservative bloc and the abandonment of the underground. The President reiterated the importance of the re form since it is necessary that the councilors be elected by popular election from a list of 60 can didates; 20 proposed by each power since it is essential that the entire population be fairly rep resented. He mentioned the need to reduce the budget since it is exaggerated; 30 billion is spent between INE and the state electoral bodies.

• Law of the Administrative Justice Tribunal: When asked by a reporter about the comments on the initiative of the Organic Law of the Administrative Justice Tribunal sent by the Federal Executive, which seeks to favor Magistrate Natalia Tellez, the President said that it is an initiative so that more

people have the opportunity to be inside, and to avoid corruption in courts. The President acknowl edged the coordination and leadership of the Gov ernor, with whom the state has performed well. He mentioned that his relationship with all governors is good, even if they are from different political currents, prioritizing the common good. He point ed out that Mauricio Vila is a better presidential candidate than the other opposition candidates.

• Water Concessions: President Lopez Obrador said that yesterday he was upset because water concessions were granted during the 4T Govern ment in Cananea and subsequently, the former of ficial who granted the concessions went to work for Grupo Mexico. For this reason, he reiterated that the purification of public life has not yet been completed, as these types of practices are deeply rooted.

• Four-year government balance sheet: The Chief Executive indicated that on December 1 at 5:00 p.m. he will give a report on the achievements of his government, which has made great progress in assisting people living in poverty.

• Welfare Gas: The President mentioned that the project is on pause because of analyzing other tasks, it was proven that the service works and

KEY POINTS

OF PRESIDENT

ANDRES MANUEL LOPEZ OBRADOR’S

benefits the people by paying less for the cylin ders and with a longer duration of the product. He explained that the price increase was controlled, and the next step is to expand the project, but for the time being, it has achieved its purpose.

INTERNATIONAL

• US Elections: The President mentioned that the Republican Party won the majority in the House of Representatives; in the case of the Senate, it will remain as the Republicans and Democrats were. He insisted that Mexico gets along well with for mer President Donald Trump because he was respectful with Mexico; and very well with President Joe Biden, who is a good person and is well liked. He celebrated there was no major imbalance due to the elections. He recalled when the Governor of the Bank of Mexico, Agustin Casterns, declared in

anticipation of the US presidential election results that, if Trump won, there would be a category 5 hurricane, which he considered irresponsible.

• International Opinion: In the ranking he present ed, President Lopez Obrador is the second-best rated President with 69%, only behind Narendra Modi, Prime Minister of India. He considered that, in Spain, Franquism was maintained without Fran co; that in England they have had several crises and that the new Prime Minister is having a good acceptance. In Europe, the problem is inflation, the reason Hitler rose in his time. He commented that in Brazil the factor that was favored in the elections was the nobility of the poor people who knew how to be grateful and loyal to Luiz Inacio Lula da Silva.

ECONOMY

• Buen Fin: Hector Tejada, President of CONCANA CO, highlighted the importance of the Buen Fin for the economic development of the country, which will take place from November 18-21. To promote trade, CONCANACO has developed an application that will allow people to make hotel, restaurant, and shopping reservations online. The expect ed economic spillover is 195 billion pesos. Raquel Buenrostro, Secretary of Economy, indicated that the Buen Fin was created between the private sec tor and the government to promote the country’s economy.

• T-MEC Consultations: A reporter asked about the T-MEC consultations, Secretary Raquel Buenrostro stated that there are four blocks of questions, and it has been agreed to go in working blocks. She added that they have been working hand in hand with the energy sector and this week they will be looking for a working group to move forward.

KEY POINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S

• Economic growth: Regarding economic expecta tions, the Secretary of Economy, Raquel Buenros tro, indicated that Mexico’s situation is unbeatable; the pandemic and war in Europe has strengthened regional markets. She pointed out that there is currently a list of 400 companies that wish to re locate to Mexico, anticipating greater investments and an improvement in the labor market, which would lead to reaching the economic growth goal of 6%.

• Inflation: President Lopez Obrador indicated that inflation is on a downward trend, the current av erage is 8.4%, compared to September which was at 8.7%. He compared Mexico’s inflation with that of the U.S., where they do not have a problem with high food costs, but gasoline prices have gone up. He informed that Mexico was able to control the price of gasoline due to subsidies. The Mexican Government continues to seek measures to re duce product inflation, through agreements with stores and producers, he highlighted the agree ments with stores such as Walmart, Chedraui and Soriana.

INFRASTRUCTURE

• New head of the Ministry of Infrastructure, Com munications and Transportation: President Lopez Obrador announced that Mr. Jorge Nuño Lara, cur rent Undersecretary of Infrastructure, will be the new head of the Ministry of Infrastructure, Com munications and Transportation, replacing Jorge Arganis, who is in poor health. The change will take place on November 15 or by the end of the month. On the other hand, Jorge Arganis will be an advisor to the Presidency to take charge of the reconstruction of the SCOP Center.

• Mayan Train: Javier May Rodriguez, General Direc

tor of FONATUR, pointed out that the Tren Maya is the largest generator of jobs with 100,000 jobs in the 5 entities where it will be present. The con struction of the trains is being carried out in Cd. Sahagun, Hidalgo, and has generated 11 thousand jobs. He announced that the first train will be de livered on July 9, 2023, there will be 4 and 7 car trains, most of the 42 trains of the Mayan Train will have a hybrid system to reduce polluting emissions and will use VA type diesel, which is a cleaner fuel and its use will also be promoted by the industry in the peninsula.

• Mexicana: The President announced that he is in dialogue with the workers of the defunct airline so that the name Mexicana de Aviacion can be rein stated. The objective is to generate competition and lower prices. He added that there is opposi tion to the issue, but it is something that must be

KEY POINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S

done. He mentioned that the presidential plane will be given to Mexicana de Aviacion for commercial transatlantic flights.

HEALTH

• World Diabetes Day: Ruy Lopez Ridaura, General Director of the National Center for Preventive Pro grams and Disease Control reported that one of the main problems of this disease is that a large part of the population is unaware that they suffer from it. He added that food is one of the main factors of this disease, so government actions have focused on the regulation of ultra-processed foods such as the establishment of front labeling and the restric tion on the sale of products with low nutritional value in schools that increase the risk of obesity and diabetes.

• COVAX: The President said that UNOPS was un able to supply all the drug keys it had agreed to procure and revealed that the UN COVAX mecha nism still owes the country COVID19 vaccines.

LABOR

• Self-employed workers: Zoe Robledo, General Di rector of the IMSS, announced the scheme for the incorporation of self-employed workers, empha sizing that coverage and payment is voluntary and is made by the workers themselves. He informed that a reform on this matter is pending. Since Au gust 2020 there has been an IMSS pilot program that guarantees access to social security benefits for self-employed workers. With this new program, the worker has the coverage of five insurance pol icies without restrictions and the possibility of paying the insurance on a monthly, semi-annual,

or annual basis.

• Domestic workers: The Secretary of Labor and Social Welfare, Luisa Maria Alcalde, informed that 88% of the people who work in the home are wom en. This sector has had limited labor rights, for which reason the Secretary of Labor and the IMSS have initiated actions to create a special modali ty for domestic workers, going from a voluntary incorporation scheme to a mandatory regime. He informed about the results brought about by the incorporation of domestic workers. He reported that there is a report of 53,755 people insured with an average salary of $232.5 pesos per day and ac cess to the general benefits of insurance, among them: medical attention without limitations, cov erage for occupational risks, disability, pension, day care centers, for the family and housing cred its (coming soon).

• Flight Attendants Union: The Chief Executive Of ficer stated that he is pleased with the election of Ada Hermelinda Salazar Sosa as General Sec retary of the Aviation Flight Attendants Union As sociation (ASSA), reiterating that he did not have

KEY POINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S

a preference among the candidates. However, she celebrates democracy and the election of a wom an as leader.

ENERGY

• Plan Sonora: The President informed that there is sufficient investment for a gradual development of the project. He indicated that a greater invest ment will be sought with the participation of the U.S. government. He informed that the Peñasco Solar Plant, the rehabilitation of the Port of Guay mas, the handling of cargo and passengers at the Obregon Airport by the Secretary of the Navy, the concession for the operation of the Guaymas Air port and the rehabilitation of land customs in San Luis Rio Colorado and along the border, are con solidated projects in the State.

• Lithium: He commented that lithium is already a national asset and that all investment projects must be generated in collaboration with the pri vate sector; the goal is to keep the production of lithium and batteries in Sonora. He informed that the investment amounts to more than 50 billion pesos during the first stage of the project, which if expanded would double.

NEWS BY STATE

BAJA CALIFORNIA

The president of the Tijuana Economic and Industrial Development Association (Deitac) shared that it seeks to strength en the aerospace and automotive sector by attracting investment from European countries. He also mentioned that busi ness opportunities between South Ko rea and Baja California are seen in inno vative industries such as electromobility, semiconductors, and biotechnology, for which reason promotional organizations seek to strengthen collaborative ties.

SONORA

The Sonora Plan for Sustainable Ener gies is presented at COP27 in Egypt. They explained the competitive advan tages of the state to be the main gen erator of clean energy in Mexico and its wealth in raw materials such as lithium and graphite.

NEWS BY STATE

NUEVO LEON

More than 25,000 citizens marched through the streets of Monterrey in de fense of INE to demand opposition par ties to reject the Electoral Reform, fear ing that Morena will take control of the electoral body.

COAHUILA

Emerson will expand in Ramos Arizpe and build a new plant in Arteaga, Coa huila. The Ramos Arizpe plant current ly manufactures more than 10 million air conditioning compressors, and the new Arteaga plant will assemble compres sors for residential and commercial air conditioning equipment.

TAMAULIPAS

Companies in Tamaulipas opened 155 jobs at Regional Fair in Altamira. Beat riz del Toro Cazares, director of the Na tional Employment Service (SNE) in the state, confirmed a variety of placement possibilities in the event not only con centrated in Tampico, Ciudad Madero, and the industrial city itself but also for the state, in other regions of Mexico and even abroad.

SAN LUIS POTOSI

The Secretary of Economic Development, Juan Carlos Valladares Eichelmann, high lighted the support that San Luis Potosí has received from the Ministry of Foreign Affairs to make possible the promotion of the State with a national success sto ry. Mexican Foreign Minister Marcelo Eb rard Casaubón held a meeting during his working tour of San Luis Potosí with busi nesspeople and executives of BMW Mo tor Company. The meeting was headed by State Governor Ricardo Gallardo Cardona, accompanied by Secretary General of the Government, J. Guadalupe Torres Sánchez, and members of the economic cabinet. In his opportunity, Valladares Eichelmann explained to Chancellor Ebrard Casaubon that San Luis Potosí stands out for being one of the most thriving entities in terms of sustained economic development and concerted investments. “We have been able to reach up to 1.2 billion dollars this year and maintain a 2.3 percent growth in the economy, which has made possible the generation of more than 7,100 jobs, de spite the consequences left behind by the Covid-19 pandemic, which meant a global economic disaster and in which San Luis Potosi has shown recovery rates above the national average,” he explained. During his visit, Ebrard Casaubon pledged 100 per cent support from the Federation to at tract more investments to San Luis Potosí and guaranteed that this State is the only

one in the country that is fighting to at tract BMW’s electric car plant.

QUERETARO

The head of the Ministry of Sustainable De velopment (SEDESU), Marco Antonio Del Prete Tercero, held a meeting with the ex ecutive director of Quebec International, Eric Marquis, in order to present the state’s economic capabilities for attracting invest ment, During the meeting, an exchange of strategies was held to strengthen the pro motion of investment, as well as to gener ate new opportunities for bilateral coop eration for the benefit of Queretaro and Quebec. The Queretaro delegation also visited the facilities of the National Muse um of Fine Arts of Quebec, a space that houses 25,000 works by artists from this province, some of which date back to the 18th century. During these activities, the state official was accompanied by the Con sul General of Mexico in Montreal, Alejan dro Estivill Castro; the Director of Industri al Promotion, Alejandro Sterling Sánchez; the President of CANACINTRA Querétaro, Esau Magallanes Alonso; the President of the Club de Industriales, Verónica Valverde Montero; the President of FECAPEQ, Vir idiana Nava Rodríguez; the CEO of DALE Desarrollos, Jorge Rivadeneyra Díaz; and the Director of CARGOSER, Manuel Ruiz López.

GUANAJUATO

The agri-food sector is a strength of Gua najuato’s economy; it is the second most important cluster with a 17.5 percent share of the state’s GDP. It is the primary sec tor that provides employment to more than 206 thousand people. 8 out of every 100 jobs are in the countryside, said the Governor of the State, Diego Sinhue Ro dríguez Vallejo, when inaugurating Expo Agroalimentaria 2022. “It is an honor to welcome visitors and exhibitors of Expo Agroalimentaria to Guanajuato, the maxi mum business platform for agribusiness in our country and Latin America,” said the State Governor. He said that this exhibition had its first edition in 1996, and it is now 27 years of functioning as a “window to the future” allowing our producers to be up to date in terms of technological devel opment, ideas, visions, and perspectives for our countryside. And today, more than ever, this great Expo continues to be a fun damental protagonist in the development of Guanajuato, now also integrated into mindfacturing, the Governor emphasized. For example, he said, in the area of technol ogy, last August 14 drones were delivered for crop spraying. It is cutting-edge tech nology for the more efficient use of fer tilizers, insecticides, and fungicides, which is benefiting more than 26,000 produc ers, improving their competitiveness and yields. Rodriguez Vallejo acknowledged the organizers of this Expo because here the culture of innovation is promoted and

trend topics for the sustainable develop ment of the field are disseminated.

JALISCO

In the framework of the Meeting for Mex ico 2022, organized by the Employers’ Confederation of the Mexican Republic (COPARMEX), the Governor of the State, Enrique Alfaro Ramírez, reiterated Jalis co’s leadership in economic development and growth, investment attraction, job creation, and foreign direct investment, as well as in issues related to equal opportu nities in the productive sector, the reduc tion of the wage gap between women and men, and the promotion of the green econ omy, where the state has made significant progress in projects such as the defor estation-free agave or the green burning of harvests. “We were the leading state in economic growth in the secondary and ter tiary sectors, we are a state that is demon strating its ability to diversify its economic structure, consolidating its strength in sec tors in which we have worked for decades to form productive ecosystems that have allowed us to maintain a very important national and Latin American leadership. We are proud that today Jalisco is reduc ing working poverty while in the country it has not been reduced, or that we are re ducing national poverty to twice the na tional average, this is the best example of what we understand as inclusive develop ment,” said the Jalisco Governor.

SOURCE: BOLETINES GUANAJUATO, GOVERNMENT OF JALISCO

AGUASCALIENTES

The Secretary of Economic Development, Science and Technology (SEDECYT), Man uel Alejandro González Martínez, empha sizes that, in accordance with the guidelines of the Governor of Aguascalientes, they will implement a more proactive strategy in the search for international companies with an attractive profile for our state. Therefore, incentive packages will be redesigned with financial responsibility. “We will strength en the articulation of the state’s economic actors, including agencies of the three lev els of government, universities, clusters, chambers, and business associations. We will innovate in our competitive strategies to continue being a highly attractive enti ty for foreign investment,” he explains. He emphasizes that they will continue to di versify both economic sectors and coun

tries of origin for FDI, favoring new invest ments in information technology, web 3.0, industry 4.0, robotics, electronic compo nents, logistics, agribusiness, aeronautics, energy, and environment. In addition, the automotive sector will continue to consol idate, where it shines as a national leader.

“We are very interested in countries such as the United States, Canada, China, India, and, of course, those of the European con tinent, in addition to Japan,” he remarks.

He adds that in terms of FDI, there are 18 projects in the pipeline with the poten tial to consolidate by the end of this year and the first quarter of 2023. In addition, he stresses that in 2022 the projects that were finalized involve the creation of ap proximately two thousand jobs. Most sig nificant investments made in 2022: Xtend Ops, Marelli R&D,

CDMX

This Sunday, November 13, a march was held in favor of the National Electoral Institute (INE), against the political elec toral reform of President Andres Manuel Lopez Obrador, attended by various po liticians from the National Action Party (PAN) and the Institutional Revolutio nary Party (PRI). The march unleashed a number crunching, as the Secretary of Government of Mexico City, Marti Ba tres, reported that between 10,000 and 12,000 people attended, while the orga nizers of the march indicated that there were more than 200,000.

STATE OF MEXICO

According to a survey conducted by El Financiero from October 28 to 30 in the State of Mexico, 46 percent of citizens’ preferences for the elections for the go vernorship of the State of Mexico are in favor of the PAN, PRI or PRD, while Mo rena and its allies account for 43 per cent. The difference is minimal, three percentage points, but it is the first time since last June that the parties that have formed the opposition alliance appear above the party of President Andres Manuel Lopez Obrador.

ECONOMIC RECOVERY

NORTHEAST

- EMERSON

On Tuesday, November 8, announced a double invest ment in Coahuila, one will be expansion of facilities in Ramos Arizpe, and the other construction of a new plant in Arteaga. The amount of the investment was not mentioned, and 1200 new jobs will be generated in both plants in the last stage.

- NIDEC

On Tuesday, November 8, the Chinese company star ted operations at its plant in Monterrey, Nuevo Leon. The investment amount is 18 million dollars. Company dedicated to the manufacture and commercialization of refrigeration solutions.

- ETRON

On Tuesday, November 8 they inaugurated their plant in Apodaca, Nuevo Leon. The investment amount is 5 million dollars and 40 new jobs will be generated. Company dedicated to the manufacture of electrical switches.

- AMBU

On Monday, November 7, they inaugurated their lar gest plant in Ciudad Juarez, Chihuahua. The amount of the investment was not mentioned; however, it is expected that 3,000 new jobs will be generated in the coming years.

- ASK CHEMICALS

On Monday, November 7, they inaugurated their plant in Carmen, Nuevo Leon. The amount of the invest ment was not mentioned, however, they are looking to increase their production in Mexico.

ECONOMIC RECOVERY

- DAYCO

On Monday, November 14, they began construction of a second plant in San Luis Potosi. It will invest 11.5 million dollars, generate 100 new jobs and start ope rations in the first quarter of 2024. The plant will ma nufacture state-of-the-art belts for the automotive industry.

CDMX - NEOLPHARMA GROUP

On Friday, November 11, construction began on three projects in the Coyoacan district of Mexico City. An investment of 800 million pesos will be made and 1200 new jobs will be created. A biotechnology plant, an injectables plant and a center for pharmaceutical development and procedures will be created.

CENTRAL MEXICO - MARTINREA

On Friday, November 11, the company announced an expansion of operations in Queretaro. The amount of the investment is 748.2 million pesos and will genera te 108 highly specialized jobs.

- BRP

On Tuesday, November 10, the company announced an expansion of operations in Queretaro. The amount of the investment was 127 million pesos and will ge nerate 600 new highly specialized jobs in the next 2 years.

SOURCE: CLUSTER INDUSTRIAL, MEXICO INDUSTRY

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