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GENERAL SITUATION IN MEXICO

Weekly Review # 58 I June 9, 2021

MANUFACTURING INDUSTRY LABOR SPECIALISTS WILL MEET WITH KAMALA HARRIS DURING HER VISIT TO MEXICO Mexican labor experts will meet with Vice President Kamala Harris as part of the working groups agreed upon during the visit to Mexico and represent the first opportunity to analyze the development of the labor chapter in the framework of the USMCA.

It should be recalled that Mexico is in the process of responding to a request from the U.S. government, under the rapid response mechanism, regarding the denial of labor rights of workers at the General Motors plant in Silao, Guanajuato.

Among the issues to be addressed under Chapter 23 of the USMCA are the 2019 labor reform and its implementation, as well as specific aspects such as child labor and gender equality.

According to union sources, a date has not yet been agreed upon for the new vote to legitimize the collective bargaining agreement, as requested by the Ministry of Labor and Social Welfare (STPS), despite the fact that 30 days have been given for this purpose, and the deadline for which expires this week.

MANUFACTURING INDUSTRY

USMCA BOOSTS MEXICO’S PROGRESS IN AUTO PARTS In addition to attracting new foreign capital for 662 million dollars during the first quarter of 2021, Mexico’s auto parts industry consolidated its position as the main supplier of vehicle parts and components to the United States, growing 0.29 percentage points in market share concerning the previous year’s volume, reflecting the opportunities offered by the USMCA to replace imports and the trade war with China, said Alberto Bustamante, director of Foreign Trade of the National Auto Parts Industry (INA). The challenge is for Mexico to exceed 102 billion dollars in terms of auto parts production value and to position itself as the world’s fourth-largest producer of parts and components by 2023, taking the place of Germany, under the new rules of origin of the Mexico-United States-Canada Agreement (USMCA), which seeks to strengthen the North American bloc by substituting auto parts imports. For the next two years, it is estimated that foreign direct investment in the auto parts sector in Mexico will amount to between 5 and 8 billion dollars, which would almost double the highest amount reported by the industry in recent years, he said.

4.90 (+28.4%)

4.84 (+13.6%)

4.22 (+2.5%)

In a virtual press conference, the INA executive said that Mexico reached a 38.11% share as an auto parts supplier in the U.S. market in the first quarter of 2021 when at the end of 2020 it had 37.82%; while Canada advanced to 10.38% from 10.18% last year; China has a 10.09% share from 9.98%.

0.45 (-89.4%)

2020

F 2021

KEY POINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S Morning Press Conference June 2-8, 2021

COVID-19 The Secretary of Health, Jorge Alcocer Varela, commented that Mexico has been reducing the indicators of the pandemic for 20 consecutive weeks. For her part, the head of the Secretary of Education, Delfina Gómez, reported about the return to classes in which 1,631,235 students will return to classrooms; 24,406 schools in 730 municipalities in 16 states returned to face-to-face classes, and 259,722 workers will return to classrooms. Chancellor Marcelo Ebrard reported that the Johnson & Johnson vaccine will be applied to the population between 18 and 39 years of age in border municipalities. For his part, the president said that the government’s goal is to vaccinate the entire population over 20 years by October to prevent an increase in COVID-19 cases in winter. ECONOMIC RECOVERY The president highlighted that the Bank of Mexico increased the growth forecast in Mexico to 7%. He indicated that he perceives a macroeconomic balance and that the branches most affected by the pandemic are already recovering. MIDDLE EAST CONFLICT The president stressed that the government supports the statement made by the representative of Mexico to the UN, Dr. Juan Ramón de la Fuente, reiterating that Mexico’s position is to invite the parties to privilege dialogue.

SOURCE: https://www.youtube.com/channel/UCxEgOKuI-n-WOJaNcisHvSg

EXTENSION OF MANDATE The president confirmed that he will not extend his position at the presidency since he is a man of ideals and is opposed to reelection. He assured that he will retire in September 2024. HYDROELECTRIC Asked about the renewal of various hydroelectric plants, the president commented that there are around 60 hydroelectric plants in the country. Most of them have very old turbines, and they must be changed to modern ones to generate more energy. The replacement of the turbines has been awarded to foreign companies with the aim, not only to renew them, but also to make them more resistant to the previous ones. ELECTORAL PROCESS The president presented the electoral results based on the INE’s Preliminary Electoral Results Program (PREP). He thanked the citizen participation and highlighted that MORENA had obtained key spaces. He said that with the results, MORENA and allies will have a “loose” majority, 50% + 1, which will allow them to approve the budget and continue with the Wellbeing programs. VISIT KAMALA HARRIS The president said that the central theme of the visit of the US Vice President is immigration, development projects for the region, and preventing people from leaving their places of origin due to socio-economic problems.

MEASURES TAKEN BY STATES IN MEXICO

BAJA CALIFORNIA WCalifornia is considered in the lowrisk tier or green light, except for the municipality of Mexicali, which is considered in the medium risk or yellow light. Official reports confirmed that there are 366 active cases on a state level, with hospital occupancy at 26.61%, with 434 hospital beds available, as well as 240 respirators available for Covid-19 patients. In the last week, it was reported that 20 persons lost their lives due to Covid-19. With the vaccination plan continuing, it´s reported that 696,599 people have been successfully vaccinated in the State. In the following weeks, vaccination will be open for younger groups starting from 18 years old. State elections were held on June 6th, which saw the President´s party, MORENA, win all positions in Baja California, from State Governor to all municipalities, and from federal to local congress positions.

SONORA With an increase in Covid-19 cases, Sonora has the vast majority of its municipalities in medium risk tier or yellow light, and only six municipalities out of 72 in the low-risk tier, including San Luis Rio Colorado, Puerto Peñasco, Nogales, Agua Prieta, Cananea and Empalme. According to the official report on June 7th, the State has 1,051 active Covid-19 cases, increasing from the 890 active cases reported last week. Reports also confirmed that there are 86 current hospitalized Covid-19 patients, also an increase, with 53 patients are considered acutely ill and 23 critical patients using respirators. There were also reported 52 new confirmed cases, and one patient lost its in the past 24 hours. State and municipal elections held on June 6th saw the President´s party, MORENA and its allies, win 30 municipalities as well as State Governor.

MEASURES TAKEN BY STATES IN MEXICO

COAHUILA Coahuila has remained at the Green Traffic Light for more than nine weeks, so Governor Miguel Angel Riquelme Solis urged the population to continue setting the example of responsibility. Riquelme Solis recalled that on March 25, the federation sent the official letter confirming the change to green at the epidemiological traffic light for Coahuila, which meant another area of opportunity to rejoin the activities that had yet to reopen. TAMAULIPAS This Wednesday, the vaccination of 40 to 49 years will begin in the municipality of Altamira, confirmed the federal delegation in Tamaulipas, as well as in Nuevo Laredo, San Fernando, Burgos, Cruillas, and Mendez.

NUEVO LEON After the conclusion of the electoral process in Nuevo Leon, the federal government announced the reactivation of the vaccination process against Covid-19. The vaccines will be applied to people from 50 to 59 years old, pregnant women, and the beginning of the first doses for adults from 40 to 49 years old in nine municipalities of Nuevo Leon announced. From the week of June 8 to 11, the vaccination will be done in the municipalities of San Pedro Garza Garcia, Garcia, Abasolo, Mina, Hidalgo, Lampazos, Vallecillo, Paras, Bustamante and Villaldama, on their respective dates.

MEASURES TAKEN BY STATES IN MEXICO

JALISCO In total, said the state agency, 29,499 vaccines were applied in Guadalajara and Zapopan, of which 22,060 were second doses for senior citizens in Zapopan and 7,439 for people between 50 and 59 years of age and pregnant women in both municipalities. The vaccination will continue this week, which will complete the regular vaccination days for people over 60 years of age in the 125 municipalities of the State. In addition, those who have not yet been immunized will have the opportunity to be vaccinated with other age groups, said the Jalisco Health Secretariat.

GUANAJUATO The Federal Government confirmed the application of the biological Pfizer BioNtech for people of this age range and pregnant women over 18 years of age in the municipality of Irapuato would begin on June 8 in four different locations. One million 650 thousand 241 anti-covid vaccines have been applied in the State, which means that 26 percent of the population already has at least one dose, and there are 600 complete vaccination schedules in the State. Last week, 32,832 vaccines were applied to people between 40 and 49 years of age in the municipalities of Celaya and Ocampo. Progress was also made with the application of the biological vaccine in 18 municipalities for people between 50 and 59 years of age and pregnant women. The Secretary of Health also informed that the back-to-school pilot plan will be extended with more than 200 schools joining the test this Monday, June 7. Furthermore, the Secretary pointed out that the educational institutions will meet with the General Directorate of Protection against Sanitary Risks to supervise that they carry out the sanitary protocols to avoid contagions.

MEASURES TAKEN BY STATES IN MEXICO

QUERETARO The Federal Government invited citizens between 60 and 69 years of age and pregnant women over 18 years of age in the municipality of Queretaro to receive the first dose of the vaccine against COVID-19 from Tuesday, June 8 to Saturday, June 12. This updated call replaces the one scheduled to be held at the Corregidora Stadium this Saturday, June 5, and is to receive the second dose.

AGUASCALIENTES People between 40 and 49 years of age and women 18 years and older who are nine weeks pregnant or more and live in the municipalities of Jesus Maria, El Llano, Tepezala, and San Francisco de los Romo and are interested in receiving the first dose of the vaccine against COVID-19 must prepare their vaccination dossier to present it together with their CURP and INE credential when they go to the respective modules. With sanitary protocols to prevent the spread of covid-19, on-site classes resumed in Basic Education in the State of Aguascalientes this Monday. “We have indicated it to be a safe, gradual, staggered return,” commented the director of the Institute of Education of Aguascalientes, Ulises Reyes. Ulises Reyes said that 650 schools were scheduled to open and about 370 next Wednesday, which were polling stations this Sunday, while 200 schools still do not have conditions for returning to classes. However, they will be incorporated gradually.

MEASURES TAKEN BY STATES IN MEXICO

STATE OF MEXICO The State of Mexico changed to green light of the epidemiological traffic light for the first time since the pandemic started. Also, as in Mexico City, face-toface classes began this week at some schools. All schools that open need to comply with health measures.

CDMX Mexico City changed to green light of the epidemiological traffic light for the first time since the pandemic started. Faceto-face classes began this week at some schools. Authorities said that the return to face-to-face classes is voluntary. All schools that open need to comply with health measures.

VACCINATION PROGRESS

As of June 7th, 34,600,289 doses had been applied. Thus, 14,172,467 people have the complete scheme. As of now, 43,347,665 doses have been received. The vaccines applied in Mexico are Pfizer BioNtech, AstraZeneca, SinoVac, Sputnik V, and Cansino.

TOWARDS THE “NEW NORMAL”

DISTRIBUTION OF DEATHS PER STATE DUE TO THE PANDEMIC

INFORMATION UPDATED ON JUNE 7, 2021 AT 19:00 HRS LOCAL TIME.

NEW CASES REPORTED: 881

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

CONFIRMED CASES: 2,434,562

NEW DEATHS REPORTED: 34

CONFIRMED DEATHS: 228,838

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 rate 1887.66

0 to 500 (1 states) 501 to 1,000 (2 states) 1,001 to 1,500 (12 states) 1,5001 to 2,000 (8 states) >2,000 (9 states)

Elaborated by Prodensa with information from the Health Ministry of Mexico

PANDEMIC’S SITUATION IN THE WORLD • As of June 7, 2021, globally there have been reported confirmed 173,005,553 cases (368,456 new cases) of COVID-19 and 3,727,605 deaths (8,661 new deaths*). Lethal rate: 2.2%. • In the last 14 days, the number of new cases accounts for 4% (6,302,386) of the total of accumulated cases. *https://www.who.int/docs/default-source/coronaviruse/situation-reports/20200323-sitrep-63-covid-19.pdf?sfvrsn=d97cb6dd_2

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

TOWARDS THE “NEW NORMAL” INCIDENTS OF CONTAGIONS IN THE POPULATION BY REGION AS OF JUNE 8

DEATH INCIDENTS IN POPULATION BY REGION AS OF JUNE 8

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

EHS

RECOMMENDATIONS RECOMMENDATIONS FOR FULLY VACCINATED PEOPLE Fully vaccinated people with COVID-19 symptoms Although the risk that fully vaccinated people could become infected with COVID-19 is low, any fully vaccinated person who experiences symptoms consistent with COVID-19 should isolate themselves from others, be clinically evaluated for COVID-19, and tested for SARS-CoV-2 if indicated. In addition, the symptomatic fully vaccinated person should inform their healthcare provider of their vaccination status at the time of presentation to care. Fully vaccinated people with no COVID-like symptoms following an exposure to someone with suspected or confirmed COVID-19 Most fully vaccinated people with no COVID-like symptoms do not need to quarantine, be restricted from work, or be tested following an exposure to someone with suspected or confirmed COVID-19, as their risk of infection is low. However, they should still monitor for symptoms of COVID-19 for 14 days following an exposure. Exceptions where testing (but not quarantine) is still recommended following an exposure to someone with suspected or confirmed COVID-19, include: Fully vaccinated residents and employees of correctional and detention facilities and homeless shelters. Fully vaccinated people with no COVID-19-like symptoms and no known exposure to someone with suspected or confirmed COVID-19 It is recommended that fully vaccinated people with no COVID-19-like symptoms and no known exposure should be exempted from routine screening testing programs if feasible.

DAVID ANTUNEZ Environmental, Health, and Safety Director.

PUBLIC AFFAIRS

RECOMMENDATIONS HOW TO COMMUNICATE DIGITAL TRANSFORMATION?

The success of the implementation of Digital Transformation depends on the organization’s capacity on how it is communicated. The message and objectives must be clear, pacifying, and positive; otherwise, they can be perceived as an imposition. The organization leaders have a critical responsibility for this communication. They must inspire people to follow the implementation. The first step is to identify who are the leaders convinced about Digital Transformation. They will be the ambassadors and ensure that the organization well receives the message. First, the leaders must communicate the Digital Transformation benefits, so the people will get involved and ensure its success. Therefore, the main task is to create a digital transformation leaders’ team. Second, the responsibilities and objectives of each individual on this transformation must be clear and agreed upon by each party so everybody can efficiently perform their tasks. Third, each individual’s ideas and voice must be heard to build together the implementation plan; this way, everybody will develop a sense of belonging, which is a key element to success. According to a McKinsey poll, the probabilities of success increase 5 to 8 times when the CEO is capable of communicating a good story of change and why the organization must embrace Digital Transformation.

YOELLE ROJAS Public Affairs & Communications Director

LABOR

RECOMMENDATIONS NEW CRITERIA FOR VACCINATED VULNERABLE WORKERS Recently, due to the progress of the national vaccination program, the federal government updated the criteria for the segment of the population considered vulnerable based on IMSS technical guidelines to establish new measures applicable to the reopening of economic activities in workplaces. The new criteria establish that workers considered vulnerable and vaccinated against the complete COVID-19 will be able to return to work 14 days after completing the vaccination schedule at any of the epidemic risk traffic light levels. Care and preventive measures for vulnerable workers who have already been vaccinated and who return to work should be the same as those currently followed for the rest of the workers.

ALVARO GARCIA HR, Vice President

BASIC PROTECTIVE MEASURES AGAINST COVID-19

1 2 3 4 5 Wash your hands frequently with soap and water for 20 seconds.

When coughing or sneezing, cover your nose and mouth with a disposable tissue or use the inside corner of your arm.

Avoid shaking hands and kissing.

Keep your workspace clean and don't share personal items and utensils.

If you show symptoms of a cold or flu, go to a doctor. Do not self-medicate and inform your supervisor and Human Resources department.