INSITUATIONGENERALMEXICO Weekly Review #121 I September 14, 2022
“If there were a real change in the trend of accelera ting nearshoring for Mexico, we could be talking about growth closer to 3 percent and that would give the go vernment much more room to maintain fiscal accounts at orderly levels and stable debt metrics at levels better than peers,” said the master’s degree in economics from New York University.
“There are other more structural issues, such as energy supply, the type of energy that can be supplied in the regions, particularly in the north, where we see compa nies that want to invest in nearshoring,” he stated.
3%MEXICO’SINDUSTRYMANUFACTURINGECONOMYCOULDGROWBYALMOSTIFNEARSHORINGINCREASES.
The companies attracted by nearshoring now have more predilection for green renewable energies: “And as was being discussed, now in the Pemex panel and the ener gy sector is not, let’s say, Mexico’s energy matrix and is not aligned with that,” he added.
Renzo Merino, Moody’s Investors Service senior analyst for Mexico, said that an acceleration in the arrival of companies from Asia to Mexico, a phenomenon known as nearshoring, will cause the gross domestic product (GDP) to advance close to 3% annually.
There are trust, structural, and infrastructure issues that are limiting the flow of new companies coming to Mexi co, he considered.
“We want the nearshoring dynamics to remain as we are currently seeing them, and that would be congruent with a medium-term growth of 2 percent,” he said.
2
The nearshoring is happening in northern Mexico, and some companies are moving from the Asian continent to the country, he recalled in a press conference.
The arrival of foreign direct investment has been slowed down by the uncertainty registered in the last year due to the energy reform proposal of Andrés Manuel López Obrador’s government, said Renzo Merino.
“But it is not happening (the arrival of investment at tracted by nearshoring) at a level that we believe can change the growth trend, which is close to 2 percent,” commented Moody’s Vice President of Sovereign Risk.
Source: Forbes Mexico
• Elections in the State of Mexico: The President pointed out that candidates are already being cho sen and there is political effervescence and com plaints. He commented that the best thing is that governments do not intervene and allow freedom of choice on the part of citizens to elect their au thorities democratically.
3
• Federalization of education and health systems: The president mentioned that the federalization of the education system is being analyzed, which was halted due to the pandemic situation and the economic crisis, but the plan is already being tak en up again. On the other hand, progress is being made in the federalization of the health system, which is already in three states: Tlaxcala, Colima, and Nayarit. I affirm that by the middle of next year there will be a free quality health system through out Mexico, with no lack of doctors and specialists.
• Independence Day: President López Obrador in formed that the commemoration of the Indepen dence will be held on September 15 at night, with the participation of the Tigres del Norte. On Sep tember 16, the parade will be dedicated to the Na tional Guard and the people in charge of Public Security will participate. The lottery will be pre sented, where the land in Sinaloa will be raffled as part of the national holidays; the proceeds will be invested in Sinaloa for dams and infrastruc ture for irrigation, domestic water supply, and the operation of a hydroelectric plant. He mentioned that ¡ among the guests at the September 16 cer emony will be Evo Morales, José Alberto Mújica, the family of Dr. Martin Luther King, the family of César Chávez, the family of Julian Assange, and
Morning Press Conference
the daughter of Che Guevara. Among the guests are also the priest James Martin; the Prime Minis ter of India, Narendra Modi, and the linguist Noam Chomsky.
KEY POINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S
• Zero impunity: The Undersecretary of Public Se curity, Ricardo Mejía, informed that from Septem ber 1 to 7, 8,166 people were arrested for common and federal crimes. He expressed his concern that by invalidating preventive detention, the constitu tionality of Article 19 would be altered. He stated that the Supreme Court of Justice cannot reform, unapply, repeal, or modify a constitutional article; only the permanent constituent power can do so.
POLITICAL AGENDA
September 7-13, 2022
KEY POINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S
• The President emphasized that he presented the idea of integrating the entire American continent and creating a region in the world, similar to the European community, which includes the United States, Canada, and all of Latin America. Regard
BILATERAL RELATION
• Meeting with business leaders: The President in formed about the meeting with the business lead ers of the CCE and the Mexican Business Council, he assured that it was a very good meeting, where
• High-level economic dialogue between Mexico and the United States: The President indicated that there is interest in maintaining a good rela tionship between the governments and agreed to continue working together. In energy matters, the President requested that the country’s sovereign ty be respected. He affirmed that the particular issues of the companies will be taken care of.
• Ken Salazar’s statements: Regarding Ken Salazar’s statements that the future of the United States and Mexico is not with China, the President indicated that there is a treaty with the United States and Canada to create an economic alliance between all the countries of the Americas, as he is in fa vor of integration with respect for sovereignty, as was the process of the European Union. Finally, he informed that trade between Mexico and the US reached a record 449 billion dollars between Jan uary and July 2022.
• Also, the possibility of joint actions for the devel opment of energy and the automotive industry and its electrification and the development of the project for solar and gas-fired power plants was discussed. The nationalization of lithium and the project to create a national company for the ex ploitation of this mineral were reported.
4
ing the USMCA consultations, the President is con fident that it will not be necessary to advance to the panels and that an agreement can be reached.
ECONOMY
• Mexico-US Relations: He explained that there will be a High-Level meeting to address TMEC issues that already have an agreed agenda. In response to a consultation on the energy issue, he explained that the issues that come up will be dealt with and recalled a letter he received from President Biden where “a policy of good neighborliness” is sought. He considered that between Mexico and the US there is an attitude of respect for sovereignty and equality between nations. However, President López Obrador considered that the approach to the electricity issue was not the right way and considered that there is no point in continuing to encourage differences with adversaries. He men tioned that they are seeking to resolve cases of controversy of binational companies.
• Taxes: President López Obrador assured that there is a commitment not to increase taxes, he will con tinue to have an austere government without in debting the country.
SECURITY
HEALTH
5 they exchanged points of view on investment and the economic situation. He also indicated that there is good communication with the business men and that the conclusion was reached that “we are on the right track” in economic matters. He as sured that what worries him most is the increase in the price of tortillas because it directly affects the population, for which reason, he advanced that he will reinforce the anti-inflationary plan.
• Minimum Wage: The head of the Federal Execu tive reported that in 2022 the purchasing power of the minimum wage increased 65% concerning 2018, in addition, he said that in November 2018 the minimum wage was enough for 6.5 kg of torti lla and now it is enough for 9 kg, despite inflation.
• Inflation: President López Obrador pointed out that inflation is a worldwide phenomenon, which has been brought under control in Mexico thanks to the decision taken to subsidize gasoline and die sel. Likewise, the president indicated that Mexico is one of the countries with the lowest increase, it is below Canada, the United Kingdom, the United States, Colombia, Spain, and Brazil, among others.
• National Guard: President López Obrador men tioned that he is in favor of the Congress of the Union legislating (Constitutional reform) to ex tend the term from 2024 to 2028 the presence of the Army in support tasks for the National Guard. He mentioned that 22 Governors have already ex
• Cuban medical specialists: Zoé Robledo, Head of IMSS, reported the signing of a collaboration agree ment with the Cuban Ministry of Health regard ing the program for recruiting and hiring medical specialists and showed the general progress made in the states where IMSS-Bienestar is already op erating. In Nayarit, 12 hospitals, 3 UNEMES, and
KEY POINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S
245 health units are working at 100%, the reha bilitation of 15 hospitals has been completed and 80% of the rehabilitation of INSABI health centers has been completed, and significant progress has been made in the purchase of medical equipment in the first and second level of care. In Tlaxcala we are present in 100% of the hospitals and health units, 75% progress has been made in equipping first level units, and 50% progress has been made in second level units. In Colima, there is a presence in 100% of the units, and significant progress has been made in the acquisition process for 3,606 pieces of medical equipment.
• Preventive prison: President López Obrador men tioned that he made the decision not to present an
6 pressed their support and he expects others to join in support of this measure. He considered that the National Guard still has to be consolidated, there fore the Army’s support is key. Should the Con stitutional reform not be carried out, the National Guard would not cease to depend on SEDENA, but the Navy or the Army could no longer be used for public security tasks. Should there be a Constitu tional controversy, it would have to be resolved by the Supreme Court of Justice of the Nation. The Federal President commented that the entire Na tional Guard plan will be announced next Wednes day, September 14.
• Security in Zacatecas: The Secretary of Defense, Luis Cresencio Sandoval, mentioned that homi cides linked to organized crime represent 81%, while 19% are of another nature, so the strategy is focused on addressing homicides linked to or ganized crime. There is support from CONACE to combat kidnapping, and another program is about to be implemented, called “Networks for the pre
initiative to reform the Judicial Power as he seeks to be respectful of such power. He explained that he would like the Judiciary itself to be the one to promote its reform. Additionally, he commented that an amnesty bill is pending in Congress.
KEY POINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S
• SEDENA’s meeting with Alejandro Moreno: The Secretary of National Defense, Luis Cresencio San doval, stated that he spoke with the PRI leader Ale jandro Moreno, about the proposal to be present ed by the Executive and how the National Guard works in other countries. They talked about all the concentrated effort of the administrative and op erational actions, in addition to the army and navy educational system so that they can collaborate in the formation of the National Guard; he was made to see the education structure.
• Social programs in Zacatecas: The President in dicated that an investment of around 7 billion pe sos is being made in social programs as part of the strategy to guarantee peace because coercive measures are not enough. He also mentioned that priority attention is being given to young people. In addition, he pointed out that 56,000 produc ers receive their support to cultivate the land and they are being helped so that fertilizer is delivered free of charge, it is a great support, and they will continue to support rural producers, as well as housing improvement actions, the regularization program for foreign cars is also going to continue.
KEY POINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S
vention of violence and addictions”, which will be focused on young people in secondary and high school. By the end of the year, the state will have 14 National Guard company installations.
INFRASTRUCTURE
7
INTERNATIONAL
• Mexico - United Kingdom Relations: The President commented that condolences for the passing of Queen Elizabeth in the United Kingdom were ex pressed on Twitter and Facebook and in the book
• Ukraine - Russia War: The President said that in his speech on September 16 he will talk about his proposal to set up a Peace Committee to face the Russia-Ukraine war and to seek an international truce. He indicated disagreement with sanctions arising from the Ukraine-Russia war.
• Mayan Train: Diego Prieto, general director of the National Institute of Anthropology and His tory (INAH), informed about the archaeological salvage works in the Mayan Train project. In this regard, he indicated that excavation progress on sections 1, 2, and 3 is at 100%. And section 4 is at 96.81%. He showed a video on the progress of the Archaeological Zones Improvement Program (Promeza), which corresponds to section 2 of the Mayan Train. It was informed that for tourists an introductory room and a museological script will be enabled in Edzá, Campeche to appreciate the Mayan culture.
• Mining: President López Obrador commented that the matter of the mine in Sabinas, Coahuila, where the trapped miners who could not be rescued were announced as “dead”, is being addressed. He of fered that he will try to get the Attorney General’s Office to inform as far as possible and commented that an arrest warrant has already been issued for three of those responsible.
of condolences. He mentioned that the funeral will be attended by the Secretary of Foreign Affairs, Marcelo Ebrard.
8
The shortage of semiconductor chips and resins has affected different sectors in the state of Sonora. The automotive industry is the most affected, with more than 20 suppliers that work at a low er capacity. The forecast is that it will be regularized until March of next year. As of this month, the supply of semi conductors is expected to begin to in crease, but until the second quarter of the year, the situation is expected to be regularized, informed Jesús Gámez García, head of the National Chamber of the Export Manufacturing and Maquila dora Industry (Index Sonora).
The industrial activity of Baja Califor nia registered an annual increase of 4.9 percent during May compared to May of 2021, with seasonally adjusted figures, according to the National Institute of Statistics and Geography (INEGI). The manufacturing industries register an an nual increase of 9.4 percent; generation, energy distribution, water, and gas sup ply did not report progress, and con struction fell 5.7 percent annually.
BAJA CALIFORNIA
SONORA
NEWS BY STATE
9 NEWS BY
NUEVOSTATELEON
The industrial production of the state of Coahuila registered an increase of 1.3% in May compared to the previous month.
The governor of Nuevo León, Samuel García Sepúlveda announced that as of this Sunday, September 11, the Cerro Prie to dam will be pumped to extract around 1,200 liters per second, more than what other surface and underground sources contribute, to provide 15,000 liters per second to the Monterrey metropolitan area.
COAHUILA
QUERETAROSTATE
the second option for companies to invest, the fourth state in performance and com petitiveness, the fourth in the sustainable cities index, and the AAA rating for having solid finances. So far this year, Querétaro is the seventh state that has generated the most jobs, with 32,529, mainly in the man ufacturing, business services, and com merce sectors, with an average salary of 526.47 pesos per day, the fourth highest in the country, as of the second quarter of 2022; 63.6 percent of workers are in the formal sector, and it is the second state with the highest rate of formality, only be hind Mexico City. Likewise, the state official informed that as of the first semester of 2022, 654.8 million dollars of Foreign Di rect Investment (FDI) have been received, 50.7 percent more than in the same period of 2021, having as main commercial part ners the United States, France, Spain, Ja pan, Germany, and Canada.
10 NEWS BY
As part of the presentation of the first ac tivity report of the administration headed by Governor Mauricio Kuri González, the head of the Secretariat of Sustainable De velopment (SEDESU), Marco Antonio Del Prete Tercero, appeared before the mem bers of the LX State Legislature. During his presentation, the Secretary highlight ed the demographic indicators that make Querétaro a national leader, such as the distribution of the Gross Domestic Prod uct, where the tertiary sector represents more than 58 percent, the secondary sec tor 38.5 percent, and the primary sector 2.8 percent; regarding the state’s econom ic activity, he specified that the state is among the five entities in the country with the highest physical volume index, that is, it is the fourth strongest economy. He mentioned different competitiveness indi cators in which Querétaro is recognized as the first place with a stable credit profile,
The Economic Development Department of the San Luis Potosí City Council and the Business Alliance began meetings to pre pare for the Suppliers Fair next November, a space where small and medium-sized en terprises (SMEs) will be able to offer their products to the automotive sector. Jaime Chalita Zarur, director of Economic De velopment of the municipality, explained that the presidents or representatives of the business chambers of San Luis Potosí were present at this meeting. He pointed out that this fair will meet the supply de mands of the main companies that make up the automotive industry in San Luis Po tosí by facilitating the integration of SMEs into value chains through a program based on strengthening. In addition to certifica tions and suppliers based on the needs and quality control requirements of the companies. “The Suppliers Fair will give a greater boost to small and medium-sized companies, which will be able to become suppliers of other companies that are part of the automotive sector,” said the munic ipal official.
“This incentive was created in unity and with the contributions of the Private Initia tive, we want to boost the creation of new jobs through the implementation of public policies that involve equality, sustainabili ty, and business development,” explained Xavier Orendáin De Obeso, Strategic Gen eral Coordinator of Growth and Econom ic Development of Jalisco. The companies interested in this support will go through a selection process, in which not only the investment made will be evaluated, but also aspects that guarantee that it is an investment with a focus on business de velopment, human talent, and sustainable development. There will also be an evalu ation subcommittee, which in turn will be validated by FIMJA’s Technical Committee to have a plural and consensual vision in the granting of support. Applications will
JALISCOSTATE
11 NEWS BY
To detonate productive investment as a tool for job creation, the Government of Jalisco, through the General Strategic Co ordination of Growth and Economic De velopment and the Secretariat of Eco nomic Development (SEDECO), launched the Program to Support New Investments that Generate Employment in Jalisco. This program has a purse of 15 million pesos (MDP) for this 2022 and seeks to provide liquidity to domestic and foreign compa nies that invest in the entity and commit to generating new jobs of at least two min imum wages as remuneration and, with a contract duration of at least 4 months.
be received from September 12 to 30 of this year. The program will be available in the 125 municipalities of Jalisco; however, to strengthen regional development, pri ority will be given to investment projects in the state interior.
SAN LUIS POTOSI
Marelli inaugurated its new Research and Development Center in Aguascalientes, which aims to support the development of the automotive industry, particularly in the areas of design and production of plastic auto parts. At the event, headed by the governor of the state, Martin Orozco Sandoval, and company executives, the president said that the research and de velopment centers of the Italian-Japanese firm are dedicated to innovation in light ing technologies and electronics for auto mobiles, as well as advanced driving as sistance systems, which include sensors, software engineering, artificial intelligence, and testing laboratories. He also shared that the entity continues to take firm steps in Industry 4.0 through projects of foreign companies that endorse their confidence in the entity and the talent of its people, thanking Marelli for the continued votes of confidence towards Aguascalientes. Wayne Bradbourn, senior regional direc
AGUASCALIENTESSTATE
12 NEWS BY
tor of design and development for Marel li Interior Experience, said he was pleased with the decision to open this center in the state due to the academic quality of the people of Aguascalientes, as well as their work ethic. He also commented that with this center, it will be possible to carry out the tests required in the region, becoming one of the main resources for the develop ment teams both abroad and in the inte rior. Manuel Alejandro Gonzalez Martinez, Secretary of Economic Development, in formed that the inauguration of this space adds to the state economic diversification since, with an investment of 25 million pe sos, the presence of companies dedicated to the areas of innovation and new tech nologies is increasing. He also emphasized that the competitiveness of local talent will be able to meet the global market needs since the company is committed to training young people who respond to the needs of the industry.
GUANAJUATOSTATE
International linkage is one of the main ob jectives for the State Water Commission of Guanajuato. For this reason, an inter-in stitutional synergy and exchange of best practices with global associations and or ganizations, visionary and innovative for the water sector is promoted. The Neth erlands is an example of this, a country at the forefront in many activities and sec tors of technology, so the water sector is no exception. They are characterized for being hydraulic agents that explore and develop new and better technologies that become factors that drive water sustain ability and water conservation for present and future generations, being recognized worldwide for their high technology and solutions for both agriculture and hydrau lic infrastructure. During their visit to the state and interest in exchanging success
13 NEWS BY
ful experiences and strengthening inter national and inter-institutional relation ships, the Delegation of the Netherlands highlighted Guanajuato as a leading En tity for its excellent strategies and public policies to advance the integral manage ment of water. They recognized the work and vision that has been developed to implement and apply actions to consol idate water sustainability and water con servation in a comprehensive manner in all sectors. It is worth mentioning that during this meeting it was possible to learn about the management of water treatment and management systems, irrigation, intelli gent resource management, technology, and process automation, mechanical and digital systems, software and data analy sis, as well as state-of-the-art technology for greenhouse and open-air horticultural management.
14 NEWS BY STATE
The conversations between “Va por Méx ico,” for an eventual electoral and government coalition in the State of Mexico next year “are moving forward”, but “it would be an agreement with local forc es and without including the National Direction of the PRI at all”, affirmed the national leader of the PRD, Jesús Zam brano. On the other hand, Alfredo del Mazo affirmed that the PRI has hopes for the electoral contest for the State of Mexico.
STATE OF MEXICO
CDMX
An El Financiero poll, revealed that More na has a 40-point lead in the 2024 elec toral race for the Mexico City mayor’s office in the capital, with 40 points of ef fective voting intention. A poll by El Fi nanciero, published on Tuesday, revealed that Morena is leading in the 2024 elec toral race for Mexico City’s Chief of Gov ernment in the capital with 40 points of effective voting intentions. The poll also revealed that during this month Morena’s internal race closed, as Martí Batres, Rosa Icela Rodríguez and Omar García Harfuch have very similar levels of support in the preferences for the candidacy for Chief of Government in the capital. Batres and Rodríguez each obtained 18% of the pref erences among the general population of the capital city, while García Harfuch has 17%. Slightly lower is Morena’s national leader, Mario Delgado, with 14%. In the case of the opposition, when asked who they prefer as candidate of the alliance for head of government, Senator Xóchitl Gálvez had 19% support; the PAN may or of Benito Juárez, Santiago Taboada, 13%; the PRI mayor of Cuajimalpa, Adrián Rubalcava, 12%, and the PAN mayor of Álvaro Obregón, Lía Limón, 10%.
15
BMW GROUP
NORTHEAST
LAGUNA AEROSPACE- INDUSTRIAL PARK
CENTRAL MEXICO
Its purpose is to promote the development of the ae rospace and aeronautics industry in Laguna, which is located on the borders of Durango and Coahuila.
Sumimoto invested more than 12 million dollars in the construction of a new industrial plant in the mu nicipality of Juarez, Nuevo Leon. They will be able to increase the number of jobs they provide by 20%.
Artha Capital Frontier Industrial announced that it will invest 61 million dollars in the development of the Frontier Industrial Park in Toluca, which will ge nerate 15,600 jobs.
ARTHA CAPITAL-FRONTIER
The company will invest US$90 million to install hi gh-tech production lines at its manufacturing plant in Escobedo, Nuevo León. The company will gene rate 300 new jobs.
HERSHEYS
Looking to invest up to US$1 billion in Bajio.
CDMX
SUMIMOTO DRIVE TECHNOLOGIES
ECONOMYRECOVERYECONOMICANDINVESTMENTS
In a maximum of two months, the German brand will decide the location of a new car assembly plant with this composition.
CHINESE COMPANIES
IN MEXICO
Every company must take for granted that, at any moment, it will face a scenario that requires activating replacement mechanisms. It is not exclusive to large corporations to have defined succession charters; it is equally applicable to small organizations, family busi nesses, and any organization that needs to go through organiza tional changes smoothly, especially if it is the head of the company or any position of high responsibility.
An essential task for executives in companies is to identify and de velop who will take over their role. Although it is usually the per sonnel areas that document career plans and follow up on develop ment programs, it is the top management that is really responsible for training their replacement.
THE IMPORTANCE OF SUCCESSION PLANS
HR, Vice President
Today we can reflect on whether the company in which you collab orate is prepared to face a succession, or better yet, ask yourself if there is a replacement identified for your role. Do you know it? Have you developed it? If the answer to these questions is yes, you are doing something right. If the answer is no, it is time to take ac tion.
It is essential for organizations to have succession scenarios in place to ensure business continuity and avoid disruptions caused by un expected changes in key positions. Planned succession helps avoid making improvised decisions that jeopardize business operations and the achievement of organizational goals.
It is important to understand succession in the workplace as an event that is always imminent. Replacement plans are not there to be activated only in cases of retirement or old age. Today, the en vironment we live in forces us to be prepared at all times for suc cession. It is no longer only younger professionals who are leaving companies at a rapid pace; executives are also changing organiza tions more frequently in search of another position. The competi tion for talent reaches all roles.
ALVAROGARCIA
LABOR
16
www.prodensa.com contact@prodensa.com