By on March 12, 2020

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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39 Comments on “Mexican Production Under Threat As China Struggles to Come Back Online...”


  • avatar
    cprescott

    There is some joy seeing that the companies who fled America for China’s cheap labor are now paying for their decisions. Hopefully this will teach the world that globalism does have a steep price – go where cheap labor is and you will reap a harvest that will bite you later. Cheap labor states also don’t care about the environment or their people. We in the West have standards for labor, safety, and environment that do add to costs of production. Cheap labor states aren’t cheap -they are not caring about jack.

    • 0 avatar
      FreedMike

      Right, because we all know viruses just love to originate themselves in countries where labor is cheaper. It’s in their nature.

      Seriously, dude…if you can’t come up with anything coherent, just be quiet.

      • 0 avatar
        JimZ

        you should see the decrepit oldsters on Facebook. they’re all convinced this is the fault of the Democrats just trying to take away their toys and/or make Trump look bad.

        funny how people who think they’re really smart are usually the easiest people to dupe.

        • 0 avatar
          hreardon

          Well, I’ll agree with you there, that anyone who is trying to politicize this and point fingers is flat out ridiculous.

          • 0 avatar
            FreedMike

            @hreardon:

            There’s a difference between stupid conspiracy theories about how this virus originated, and criticizing the way the White House is handling virus, wouldn’t you say?

        • 0 avatar
          dukeisduke

          Meanwhile, the Chinese government is busy trying to blame it all on the US. I’m just ready for it all to be over with.

        • 0 avatar
          Lie2me

          “funny how people who think they’re really smart are usually the easiest people to dupe.”

          Unfortunately they still get to vote

          • 0 avatar
            Zoomers_StandingOnGenius_Shoulders

            “funny how people who think they’re really smart are usually the easiest people to dupe” -QFT

            Here’s a mirror.

            Best and brightest y’all!

        • 0 avatar
          Hummer

          “ funny how people who think they’re really smart are usually the easiest people to dupe.”

          The fact remains that swine flu was much more deadly and little to no response was given by the US government until after around 1,000 deaths occurred. The media has taken to task to frame every Trump response as negative, and the rubes suffering TDS are eating every bit of it up. These people will believe anything the constant news cycle tells them – to support their opinions provided to them by said journalist.

        • 0 avatar
          Zoomers_StandingOnGenius_Shoulders

          You should see the the self important baby ragers on TTAC, making an overrated virus political while their boy Biden pees himself and mutters incoherently. LMFAO. The BEST…AND the BRIGHTEST. You all.

          • 0 avatar
            Hummer

            Actually I think Joe said it best,

            “Look fat. Corn Pop was a bad dude. He killed over 150 million people using his AR-14 which can hold 100 rounds. Those men and women were created under the, you know, you know the thing. Why am I stopping? No one else stops. You’re full of sht, you lying dog faced pony soldier.”

      • 0 avatar
        hreardon

        FreedMike –

        I think he’s referring to the fact that so many organizations have hitched major portions of their supply chain to one country due to the allure of cheap labor and lower regulatory burdens. They did this ignoring the potential downside risks when things (inevitably) would go sideways, as they are now.

        I’m all for companies re-evaluating their reliance on China and moving supply chains out of that country. The current pandemic is only going to speed that process along.

        • 0 avatar
          highdesertcat

          “have hitched major portions of their supply chain to one country due to the allure of cheap labor and lower regulatory burdens.”

          Did you forget this outsourcing really took off during the Clinton administration, and was further encouraged during the last administration?

          The Shrub administration had their hands full with the 9/11 aftermath and retaliatory wars against Iraq and Afghanistan. Little trade policy there.

          So this all happened BT (Before Trump) but Trump has already initiated many long-overdue changes.

          Some people make light of the many American citizens moving to foreign countries to get away from the previous madness that overtook America, BT.

          But with President Trump in charge, some of those millions of ex-pat American citizens living abroad are re-thinking their earlier decisions, and “comin’ home to Mama.”

          The Philippines is currently experiencing a massive exodus of resident-Americans returning to the States, a Viet Nam-era friend of mine being one of them. He came back to San Jose, CA.

          • 0 avatar
            FreedMike

            “The Philippines is currently experiencing a massive exodus of resident-Americans returning to the States…”

            Well, yeah, when you’re living in a country that’s dealing with a serious ISIS problem, and is functioning under martial law, I’d say it’s time to book some tickets for home, wouldn’t you?

          • 0 avatar
            highdesertcat

            FreedMike, to those who voluntarily left the US for foreign places where to live, today’s America with President Trump is a much better place than when they left it.

            Americans residing full-time in Ensenada, Baja California, Old Mexico, a place where we have property and spend much of each year, have told us that they view America as better today than during the previous two administrations.

            Many of those actually take trips back to the US to visit friends and relatives, instead of the other way around.

          • 0 avatar
            bd2

            “Outsourcing” was led by the Republican Congress as they benefited from the largess that came their way from Walmart and other huge corporations.

            And guess who was pushing for NAFTA as well.

      • 0 avatar
        dukeisduke

        I don’t have any joy about this at all. However it started, and regardless of who might have dropped the ball, people are sick, and some are dying. There’s no “win” here at all.

      • 0 avatar
        Garrett

        FreedMike –

        I think if you look at recent disruptive diseases that have made the news over the last few decades, you’ll note that they all seem to have the common denominator of coming out of lesser developed countries or China.

        When evaluating foreign investment, you contemplate various risks, such as the government, local regulations, etc. At this point, companies would be failing in their due diligence if they did not begin to consider the prosperity for significant public health issues that occur in China.

        The death rate in China is likely far higher than reported due to overall poorer health conditions (smoking prevalence, pollution, etc). Basically, look to Italy to get an idea of how bad it really is, but that is probably a baseline.

        Companies would be wise to diversity their suppliers when it comes to their geographic footprint. There are a lot of countries in the world – concentrating production in China seems to be a risky move.

        • 0 avatar
          FreedMike

          I appreciate the thoughtful response, but the fact of the matter is that viruses simply originate the way they originate. Coronavirus could just as easily have originated here; it just happened to develop elsewhere.

          https://www.scientificamerican.com/article/experts-where-did-viruses-come-fr/

      • 0 avatar
        Hummer

        “ Right, because we all know viruses just love to originate themselves in countries where labor is cheaper. It’s in their nature.”

        Well it’s not coincidental that areas with cheaper labor do have more virus outbreaks and are often ground zero for these viruses, be it swine flu, SARS, etc.

        • 0 avatar
          FreedMike

          That’s due to higher population densities, not the price of labor. Viruses don’t discriminate based on how little or how much you make. Don’t believe me? Ask Tom Hanks.

          • 0 avatar
            Lie2me

            Not only is Tom Hanks and his wife rich they’re well liked liberal democrats. So much for stereotyping

          • 0 avatar
            Hummer

            Your comment completely avoids my point, Dallas is a huge city and I don’t see virus originating from within its city limits.

            WuFlu exists because China is a 3rd world country and does not have the sanitation, individual wealth, and education of the average 1st world citizen. Interacting with animals without the proper precautions is bound to have adverse effects.

          • 0 avatar
            FreedMike

            It’s about population density, not localities.

            If tomorrow during lunchtime, you put one infected person in downtown Dallas, and one in midtown Manhattan, where would the virus spread more quickly?

            Viruses spread more quickly in densely populated areas. That’s why it spread so fast on a cruise ship, and an old age home – higher population density.

          • 0 avatar
            Hummer

            Again, I understand, more people interacting means higher transmission rates – but that does not address your sarcastic statement “ we all know viruses just love to originate themselves in countries where labor is cheaper”.

            Frankly it’s inherit to labor being cheaper – you remove safety standards, environmental ethics, human ethics, and sanitation expectations, and issues like this happen. Similar situations existed in pre-modern European cities.

            While I’m sure some virus can still be traced back to a modern city, the likelihood of a virus originating in a modern 1st world country is significantly lower than in a 2nd or 3rd world country.

          • 0 avatar
            Art Vandelay

            While population density aids in the spread, and certainly viruses can pop up in places like the US, lets not pretend that it is luck of the draw and Covid-90 could have just as easily popped up here. We don’t have unregulated meat markets selling bush meat while regulators look the other way. The worst you get here is E.Coli when some bad runoff gets on your lettuce. And we can typically trace that back to the farm and limit the spread. Failures in the US food industry are handled, fixed, and don’t shut the planet down. This is a direct result of the Chinese Government failing to do their [email protected] job, and frankly I think they should pay up for the clean up and damage they have done to the economies of the world.

    • 0 avatar
      redapple

      Cp Rescott
      You speak truth. I retract my previous salvo and apologize.

      Hummer
      Corn POP ……. Thx- best laugh today.

      High Desert
      Hussongs is great. Do the TJ ‘police’ still shake you down 1 out of 10 trips? They did me. What they ever do with the movie studio where they filmed Titanic.?

      • 0 avatar
        Art Vandelay

        Ah the TJ police. When I was in A school in San Diego one of our classmates was a moron and drive his truck down there. Hey had to pay many bribes, but he did eventually get it back.

  • avatar
    hreardon

    There’s an old saying on Wall Street: The trade works…..until it doesn’t.

  • avatar
    Jeff S

    Outsourcing of manufacturing happened long before the Clinton administration. During the Reagan administration the shoe industry moved most of their manufacturing overseas. To try to blame any individual political party for the outsourcing of manufacturing is inaccurate, outsourcing has been going on for at least 40 years. In the past the Republican party has been the party of free trade and the Democratic party has been the party of protecting the US worker. Trump is the first Republican President in recent history that has advocated to protect US jobs. Manufacturers have lobbied for less trade restrictions for the most part because of cheaper labor and as most of us know the lobbyist for these manufacturers are the ones who buy the influence on Capitol Hill.

    • 0 avatar
      bd2

      The company that spear-headed (manufacturing) outsourcing to China en masse was WALMART and where they went, pretty much everyone had to follow.

      And guess who paved the way for Walmart (the Walton family being huge Republican donors) and other big corporations?

      The “free trade” Republicans – who were then joined by the New Democrats (but roundly opposed by the Democratic old guard, who, btw, were also against NAFTA), nonetheless, have largely been able to escape blame by their base.

      As for Trumputin, he really good give a darn about “protecting jobs” aside from the bloviated bluster to appeal to his base.

      Most of his policies have back-fired (and really just took from certain industries, not to mention the tax-payer, to give to other industries) and he certainly hasn’t “walked the walk” when it comes to his business practices.

      Aside from repeatedly cheating small businesses/contractors from full-payment for work done, there’s the constant hiring of foreign workers (including construction workers from Poland – who lived in horrible conditions, in the building of Drumpf Tower), not to mention numerous illegal workers (for his resorts/golf clubs), the manufacture of all the crappy Drumpf-branded apparel and merchandise in China and the latest Drumpf real estate projects in Chicago and Vegas having been built using CHINESE steel and aluminum.

      The Republicans like to wear the mantle of “national security” but that just basically engages in mindless overspending for the military industrial complex.

      Stated decades ago that the opening of trade and the influx of American businesses to China would just accelerate China’s economic growth (at the expense of the American middle class), which in turn, would fund China’s military.

      But then again, Republicans have been willing to look the other way when it comes to Putin’s Russia b/c Trumputin believes everything Putin tells him.

  • avatar
    Jeff S

    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.

  • avatar
    JDB78

    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.

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