Mexican Production Under Threat As China Struggles to Come Back Online
Mexico, the birthplace of many lower-end automotive offerings, could see plants go dark by the end of the month if the global supply chain doesn’t sort itself out. Specifically, that means China, a prolific producer of parts.
Production in that country has been stymied since major lockdowns enacted in late January to halt the spread of the emerging coronavirus pandemic left factories idle. And while the country has begun relaxing measures that kept workers away from plants, China’s manufacturing heartland has been slow to rebound.
According to Reuters, Mexican officials say local plants could go offline if Chinese supply doesn’t return to strength in a hurry.
Manuel Gonzalez, economic development minister of the state of Aguascalientes, claims to have the inside word. “I’ve been in contact with some important companies: They tell me that they have inventory through the second or third week of March,” he told the outlet. “If that supply is not normalized, we will probably see firms suspending production.”
Aguascalientes is home to three prominent auto plants: two Nissan facilities and a joint Mercedes-Benz/Nissan plant, the latter being the birthplace of the unfortunate Mercedes-Benz GLA/Infiniti QX30 twins. Mercedes parent Daimler says everything’s running smoothly at its plant.
A spokesman for Nissan Mexico claimed the automaker has not “confirmed any significant impact,” though the automaker has admitted to flying in parts to its Mexican plants — a pricey practice that runs counter to the automaker’s emergency cost-cutting drive. However, the state’s auto cluster boss, Cuitlahuac Perez, tells a different story.
“If the shipment of components is not normalized in the next three weeks, then in more or less a month they’re going to begin suspending production here in Aguascalientes,” he said. Such a move would curtail production of the Sentra, Versa, and Kicks. The region also hosts a Nissan engine plant.
Other auto manufacturing regions, like Guanajuato and Chihuahua, are said to be in a similar basket, though General Motors said it was business as usual after being contacted. Ford could not be reached.
[Image: Nissan]
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I doubt outsourcing manufacturing will slow down anytime soon but there will be less manufacturing in China of apparel, toys, and items that are less expensive as those are going to even less expensive labor markets such as Vietnam, Malaysia, India, and lower labor countries. I use to buy Bostonian dress shoes back in the 1970's and 1980's especially the wingtips which would last and last unfortunately those old shoes wore out years ago after numerous replacement soles and heals. The newer Bostonian dress shoes are thin and have a veneer of leather that peels off and literally become unglued--they are made in China and the old ones were made in the USA. Allen Edmonds are still made in the US and still are quality made. Of course there are so few shoe repair shops not like there were 30 or more years ago. There are many other products that use to be really good like Maytag appliances, Sunbeam small appliances, Arrow shirts, Van Heusen shirts, and many other brand names that use to stand for excellent quality that have become just a name with poor quality. This is where GM and Ford are going and now Toyota is having quality issues. Some of the poor quality is outsourced manufacturing but much of it is also because the manufacturers are using much cheaper components. Much easier to lose a good reputation than to gain one. Nissan is an example of what was a quality manufacturer years ago and their quality has gone down the drain.
I enjoyed the review and I'm glad someone had something nice to say about the Titan XD. I only disagree with this statement; "The company complicated things by trying to make a truck segment that didn’t really exist." Based on my perspective and experience, there is a considerable market for the XD, but Nissan failed to market the truck properly and journalists failed to see the beauty of a 5/8 ton truck. The XD is perfect for weekend warriors living in high altitude mountain regions out west. I say this because towing between 7500-8000lbs with a standard half-ton is almost unsafe in my area. The steep grades, extreme temperatures, high winds, and twisty roads make for a white knuckle towing adventure! Not for lack of power, but lack of curb weight, suspension, and frame. The phrase "the tail wagging the dog" comes to mind. I know on paper, half-tons can "tow" 11000lbs or more....maybe on a flat road at sea-level in Florida...maybe. Towing is much more than HP and torque numbers. This is where the XD comes in. HD trucks ride like a wagon used on the Oregon trail and turn like one too! The XD is a better daily driver than an HD truck with better gas mileage and performance. Ford used to make an HD F150 with 7-lug wheels and heavy axles, but one would have better luck finding a unicorn, than an HD F150. Why? Because people love them and there is a market for 5/8 ton trucks. Bottom line, the Titan XD provides a more stable platform from the factory for towing, than any standard 1/2 ton truck.