Sweeping Mexican factory shutdown strains U.S. production of critical supplies

American companies making crucial goods like ventilators, face masks and military equipment are unable to get parts and materials they need because the Mexican government has shuttered hundreds of factories and is refusing to reopen them during the pandemic.

Canada and the United States have deemed many manufacturers of parts and materials essential and kept them open during the coronavirus outbreak. But Mexican President Andrés Manuel López Obrador is only allowing companies to operate if they’re directly involved in critical industries such as health care, food production or energy — and not if they supply materials to companies involved in those industries. So Mexican firms along the supply chain that make everything from cleaning products to motors have shut down.

So far, López Obrador has refused to bow to entreaties from the Trump administration and U.S. manufacturers to change his mind, a move that could cost U.S. firms billions as they search for supplies elsewhere around the world and give new ammunition to trade hawks in the administration who want more domestic manufacturing.

“I’m doing all I can to save the U.S.-Mexico-Canada supply chains that were created over the last decades,” U.S. Ambassador to Mexico Christopher Landau wrote on Twitter last week. “It’s possible and essential to take care of the health of workers without destroying these chains. The economic integration of North America requires coordination.”

A range of U.S. companies — from N95 mask supplier 3M to defense contractors — say they’re affected by the factory shutdowns in Mexico. Agriculture and food companies report struggling to get the equipment they need for production and distribution of goods. Ventilator makers are reporting trouble getting motors. Companies seeking cement for construction or generators for energy security say they’re also having difficulties.

Mexican President Andres Manuel Lopez Obrador speaks after visiting facilities at a Mexican Social Security Institute (IMSS) hospital that will be converted to receive patients suffering from Covid-19, in the Coyoacan district of Mexico City, Friday, April 3, 2020. Lopez Obrador said Thursday that sections of 80 public hospitals were being isolated and prepared with an average of eight beds and respirators to care for an expected influx of patients with the new coronavirus. (AP Photo/Rebecca Blackwell)
Mexican President Andres Manuel Lopez Obrador speaks after visiting facilities at a Mexican Social Security Institute (IMSS) hospital that will be converted to receive patients suffering from Covid-19, in the Coyoacan district of Mexico City, Friday, April 3, 2020. Lopez Obrador said Thursday that sections of 80 public hospitals were being isolated and prepared with an average of eight beds and respirators to care for an expected influx of patients with the new coronavirus. (AP Photo/Rebecca Blackwell)

More than 320 U.S. manufacturers wrote to López Obrador last week asking him to declare businesses essential if they are producing materials key to the supply chain for critical industries, such as health care — like both the U.S. and Canada do. They asked him to reopen some of Mexico’s factories with strict safety standards that protect the health of workers. The U.S. State Department has also been in talks with the Mexican government to advocate on behalf of U.S. businesses, a State spokesperson told POLITICO.

Source: POLITICO



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