One in 10 jobs on Mexico’s northern border is in danger due to the historic strike against large automakers in the United States, according to the National Chamber of the Processing Industry (Canacintra).
Thor Salayandía Lara, vice president of Maquiladora and Border Strips of Canacintra, told EFE that along the northern border of Mexico the automotive industry has a great weight, representing close to 10% of formal employment, based on data from the Institute. Mexican Social Security System (IMSS).
For this reason, he expressed his concern after the strike declared last week by the United States Auto Workers Union (UAW) to demand better wages and labor benefits from Ford, General Motors and Stellantis, known as the Three Detroit Greats.
“All of this employment is at risk because, although only three plants will stop initially and in the United States, this can affect the operations of hundreds of suppliers around the world, and also the few Mexicans that have settled, mainly, in the entire border“Warned Salayandía Lara.
THE AUTOMOTIVE INDUSTRY, MEXICO’S MOTOR
The importance of the automotive industry for Mexico lies in the fact that it represents almost 4% of the gross domestic product (GDP) national and 20.5% of manufacturing GDP, more than any other sector, according to the Mexican Association of the Automotive Industry (AMIA).
Mexico, in addition to assembling cars, is also a supplier of parts, so the National Auto Parts Industry (INA) estimated that the strike will cause a loss of 76 million dollars due to the drop in production during the first seven days.
The representative of Canacintra warned of effects in Ciudad Juárez, a maquiladora city bordering Texas, as well as in the rest of the border.
“In Juárez more than 200 of the 320 maquiladora plants that exist manufacture parts for the automotive industry and, if for one plant, many of them are affected. Here we are talking about three plants being shut down. There will be an impact, that’s for sure, and the same throughout the border“, he commented.
He added that throughout the border the maquiladora industry manufactures parts ranging from a simple screw or plastic for the dashboard of a car, to complex electronic systems such as Tesla computers.
It is estimated that 40% of the plants in Juárez would suffer the effects of the strike, declared the president in the city of the National Council of the Maquiladora and Export Manufacturing Industry (Index), Sergio Colín Chávez.
“Derived from the UAW’s decision-making at the Minnesota and Detroit plants, there could be a domino effect effect of different magnitudes for the industry in Ciudad Juárez and Mexico,” he considered.
A CALL FOR LABOR RIGHTS
The Index representative also predicts a blow for small and medium-sized companies (SMEs) that manufacture small parts or provide services for automotive companies in Mexico and the United States.
“In Juárez, only 40% of the industry is related to the supply chain in the automotive segment for different brands and assemblers, although this is a great risk of being affected. We will continue to pay attention to the negotiations to better act in the industry established in the country”, Indian.
Salayandía Lara said that this strike should also be considered a wake-up call to employers to review working conditions.
He said cost cutting has been too harsh on employees around the world.
“And if they are like this in the United States, how will we be in Mexico, where we have the lowest labor costs?”he questioned.
“This current model is no longer sustainable, it is necessary to find a better balance, so that workers earn well, if workers do not earn enough to live, companies put themselves at this type of risk”he concluded.
