Weekly Review I July 12, 2023

GENERAL SITUATION IN MEXICO

Weekly Review I July 12, 2023

RELEVANT NEWS

PRIVATE SECTOR REQUESTS THE LEGALIZATION OF MIGRANTS TO TRAIN THEM SO THEY CAN WORK IN MEXICO OR THE U.S.

Francisco Cervantes Diaz, president of the Business Coordinating Council (CCE), asked the government of Andres Manuel Lopez Obrador to legalize migrants, who are fleeing the violence and economic crisis in Central and South America, so that industry can train them and they can work in companies in Mexico and the United States.

“Mexico is a migration bridge from many countries (from Central and South America) to the United States, but how to take advantage of (this phenomenon)? That the government legalizes the migrants and we can train them together with the academy,” he stated.

The businessman said that there is a plan to train migrants so that they can be employed in the industry, since “that labor force is needed in Mexico and the United States”.

If we can legalize migrants, we will move from informality to formality, he said during the signing of the Collaboration Agreement between the Business Coordinating Council and the Federal Telecommunications Institute (IFT).

U.S. companies could also hire talented migrants so that the informality of people without immigration documents would cease to exist, said the president of the CCE.

According to Francisco Cervantes Diaz, Mexico has a great opportunity in the labor sector, but we also

have a major challenge and it is insufficient and we need more talent and to convert workers in the face of digital transformation.

“There is a great opportunity, which for humanity we must contemplate, (and it is to legalize) migration,” he added.

Regarding the agreement signed between the CCE and the IFT, the business leader considered that this will strengthen the digital ecosystem and boost connectivity throughout the country.

He added that digital transformation can be a powerful engine for economic growth and the generation of well-paid employment and that it is essential that this process is carried out in a responsible and ethical manner, focusing on respect for human rights and the construction of a business culture with a social and sustainable dimension.

“The Federal Telecommunications Institute, as an autonomous regulatory body, will play a key role in ensuring that there is a level playing field and adequate infrastructure to make the digital transformation processes viable in Mexico,” he said.

The CCE added that digital transformation will also allow micro, small and medium-sized companies to have access to the necessary technological tools to improve their productivity and competitiveness, thus closing the gaps that exist with respect to large companies, he said.

“It is important to highlight that business organizations have a key role as facilitators in the adoption of digital technologies by micro, small and medium-sized enterprises,” he concluded.

SOURCE: FORBES MEXICO

KEYPOINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S MORNING PRESS CONFERENCE

July 05-11, 2023

POLITICAL AGENDA

• Oppositions project: The president responded to questions regarding the opposition’s project and the progress of his administration. He argued that a conservative victory is morally impossible and accused Jose Angel Gurria of being involved in the FOBAPROA. He also mentioned that the 4T is prepared for the opposition’s potential resort to violence. The president criticized politicians for becoming advisors to big businessmen, using Jorge Tello Peon and Jesus Reyes-Heroles as examples.

• Adan Augusto: In response to a journalist’s inquiry about the potential return of the former Secretary of the Interior if he fails to secure Morena’s presidential candidacy, the president stated that the results of Morena’s internal election should be awaited. He highlighted the experience and honesty of all participants and affirmed that his government maintains an open-door policy for everyone.

• Candidates for Mexico City: The president highlighted that Santiago Taboada, the Mayor of Benito Juarez, has become the opposition’s candidate for the Chief of Government in Mexico City after Xochitl Galvez was no longer considered for the role. The president pointed out that Santiago Taboada

received a significant number of votes in the previous election, as the people of Benito Juarez tend to have a stronger inclination towards the right wing. He reminisced about a previous election where Bernardo Batiz, despite having an impressive background, lost to the PAN candidate due to the ideological preferences of the residents.

• Central America and Caribbean Games: Andres Manuel Lopez Obrador congratulated the athletes who participated in the Central American and Caribbean Games in San Salvador. They won a total of 353 medals, including 100 bronze, 108 silver, and 145 gold. He emphasized that this is a record for Mexico.

• Meetings in the south: President Lopez Obrador held a meeting with the governors of Chiapas, Tabasco, Campeche, Oaxaca, and Veracruz to discuss migration-related matters in the southeastern region of Mexico. The government is focused on strengthening assistance programs, such as Sembrando Vida and Jovenes Construyendo el Futuro, which aim to provide support to Central America and the Caribbean. Mexico’s significant aid efforts, surpassing even some major powers, amount to approximately 200 million dollars and have helped control migratory flows while ensuring the safety of migrants.

KEYPOINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S MORNING PRESS CONFERENCE

• Foreign Policy: President Lopez Obrador commented on the new Secretary of Foreign Affairs, Alicia Barcena, stating that she is a highly experienced professional in foreign policy with a background in international organizations such as the United Nations. He emphasized that there have been no formal complaints from the United States about her appointment, reiterating Mexico’s sovereignty in choosing its officials without considering the opinions of other countries. The president discussed the ongoing work on migration, drug issues, and arms trafficking with the United States, highlighting the tendency of the U.S. to involve Mexico in these matters. He expressed disappointment with the United Nations, criticizing its perceived failure to effectively address global inequality and prevent conflicts. Lastly, the president reiterated his plan to retire from politics after his term ends.

SECURITY

• Insecurity in Guerrero: During a press conference, a reporter raised concerns about detained law enforcement officers. The Secretary of Public Security emphasized their commitment to non-violence and maintaining peace while addressing the situation. The president assured that the issue would be resolved peacefully, urging the people not to be influenced by criminal gang leaders. He also mentioned the continuation of social programs to support vulnerable groups. Additionally, he apologized to travelers using the Acapulco Road for any inconveniences and expressed confidence in his government’s actions.

• Nayarit: The president expressed his condolenc-

es to the families and journalist colleagues for the unfortunate killing of one of the three kidnapped journalists in Nayarit, while the other two were released.

INFRASTRUCTURE

• New airline: Recent developments revealed that a judge dismissed the objections raised by lawyers and some workers regarding the sale of assets and the brand of by the union’s legal representatives. The president announced that the workers would receive a payment of approximately one billion pesos from the sale proceeds, after a valuation process. He highlighted that this achievement was significant, considering the previous administration’s mishandling of the airline under close association. The president also mentioned the sale of Aeromexico during Calderon’s government, linking it to campaign support and electoral fraud. He expressed that the acquisition of the brand would enhance the new airline’s image, which is scheduled to commence operations on December 1, 2023.

• Tren Maya: The Director of Fonatur announced the successful transportation of the first four-car train to Cancun. Carso provided an update on the prog-

KEYPOINTS OF PRESIDENT

ANDRES MANUEL LOPEZ OBRADOR’S MORNING PRESS CONFERENCE

as the Dos Bocas Refinery and the Tren Maya. He emphasized that important advancements have been made and underscored his government’s commitment to a more inclusive and balanced development strategy, contrasting it with the previous neoliberal approach that prioritized economic growth in specific regions.

ress of the second section of the Tren Maya, stating that the northern track is complete and the southern track is on schedule. ALSTOM shared that this train is the first of 42 trains to be delivered, with production ongoing. The governor of Campeche highlighted the significance of the Tren Maya as the largest ongoing project globally. The president mentioned the legal challenges in the Riviera Maya due to unauthorized construction and the upcoming government report in Campeche, followed by a Tren Maya tour.

• Isthmus: The president clarified that he visits the Isthmus region on a monthly basis and actively monitors the progress of major projects such

• Oil Production: The president emphasized the significance of the Dos Bocas Refinery’s production of 80,000 barrels per day and outlined the principles guiding the rescue of PEMEX and CFE, with corruption eradication being paramount. He highlighted the positive outcomes of shifting focus to shallow water oil production, resulting in increased crude output at lower costs. Drawing attention to the impact on consumers, he explained that selling crude and purchasing gasoline leads to higher prices, making the case for domestic crude processing to lower fuel costs, generate employment, and benefit the population. The president underscored the importance of achieving energy and food self-sufficiency to uphold national independence and sovereignty. Notably, significant investments of 80 billion pesos have been dedicated to modernizing six refineries, resulting in increased production of gasoline, diesel, and jet fuel by PEMEX since 2021. With the establishment of new coking plants, the acquisition of the Deer Park refinery, and the forthcoming Dos Bocas Refinery, the country’s reliance on imported fuel is projected to decrease substantially by 2024. Addressing infrastructure for workers, the president highlighted the creation of approximately 35,000 jobs during the refinery’s construction and confirmed plans for an extensive Urban Development Plan that will encompass essential infrastructure and services to support the workforce.

KEYPOINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S MORNING PRESS CONFERENCE

HEALTH

• Health Federal Plan: The Lic. Lopez Obrador convened the governors of states that have signed the agreement to federalize public healthcare services. The goal is to provide coverage for those without social security. Nearly half of Mexicans lack healthcare coverage, so the IMSS-Bienestar healthcare system is being created. Half of the states have already federalized these services, resulting in improved medicine supply, new hospitals, and sufficient medical personnel and equipment. The aim is to have one of the world’s best healthcare systems this year, providing free medicines and quality medical care with specialists. A meeting was recently held with certain governors to discuss the progress of specific hospitals.

• IMSS Bienestar: When asked directly about signs of corruption in the appointment of the Coordinator of Finance and Infrastructure at IMSS Bienestar, Luis Fernando Tagliabue Rodriguez, who faces criminal complaints related to the “Blood Cartel,” and the rehiring of previously disqualified companies in bidding processes, the president stated that he will seek information from Zoe Robledo and Roberto Salcedo to address these concerns. The president emphasized that, under his administration, there has been only one corruption case, which involved SEGALMEX.

ECONOMY

• Exchange rate: The president projected an exchange rate of 16.99 pesos per dollar and assured that this had not happened in decades. He added that in the first 54 months of his government, the peso has appreciated by 13.2%, whereas in the

same period of past administrations, the peso experienced devaluations: -43.6% during Enrique Peña Nieto’s presidency, -5.3% during Felipe Calderon’s presidency, -15.5% during Vicente Fox’s presidency, -182.4% during Ernesto Zedillo’s presidency, -36.7% during Carlos Salinas’ presidency, and -2,454.2% during Miguel de la Madrid’s presidency. The president highlighted that his administration is the only one where the peso has not been devalued against the dollar.

• Development in the Southeast: President Lopez Obrador discussed several key points during his statements. He emphasized the significant water resources in the southeastern region of Mexico, particularly in relation to the construction of the Tren Maya. To ensure sufficient water supply, an aqueduct will be built from Escarcega to Calakmul. The president also addressed the challenges of public-private partnerships, highlighting past instances of corruption and asset sales. He men-

KEYPOINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S MORNING PRESS CONFERENCE

tioned efforts to recover sold assets in the oil industry. Cancelling contracts and engaging in legal battles were considered but deemed challenging due to the current judicial system. Negotiation was identified as a more viable option. Additionally, the president acknowledged the numerous contracts awarded in the previous administration, including the canceled Texcoco Airport project, and assured that all contractors were paid. Lastly, he mentioned a substantial annual subsidy provided to the media.

• Wellbeing Bank: During the discussion, a journalist brought up concerns about alleged disappearing pension funds and theft targeting elderly individuals by employees. The president denied any knowledge of the issue and dismissed it as part of a campaign to discredit the Bank of Well-Being. This bank was established to distribute funds for welfare programs, as the previous banking sector was privatized. The government made agreements with private banks for fund distribution, leading to the creation of the Bank of Well-Being, which now has the most branches nationwide. The president emphasized the government’s aim to have a branch in every municipal center. He attributed criticism of the public bank to opposition from neoliberals who advocate for privatization and reducing the state’s involvement in social and developmental matters. The president underscored the distinction between corporate administration and public administration.

NEWS BY STATE

BAJA CALIFORNIA

The Governor of Baja California highlighted the investment by companies that will arrive or expand their facilities in the State and mentioned the results obtained on her trip to the Paris Air Show, which was attended by rectors from universities and representatives of the sector industrial. She also pointed out the integration between the educational system, universities, government and private initiative since together they help development.

SOURCE: EL VIGIA

SONORA

The German ambassador in Mexico and representatives of more than two thousand companies from that country met with the Governor of Sonora to learn about the economic opportunities offered by the Sonora Sustainable Energy Plan. And the promotion tour of Asia of the Council for Sustainable Development allowed direct communication with 28 world-class companies for the promotion of Plan Sonora.

SOURCE: GOVERNMENT OF SONORA

NUEVO LEON

The state Secretary of Economy, Ivan Rivas Rodriguez, began the implementation of Agiliza Nuevo Leon, which aims to simplify and streamline up to 40 procedures related to the arrival of new investments, through a digital window.

The objective of Agiliza Nuevo Leon is the creation of the Digital Investment Window, which will facilitate the opening of local or foreign companies, by reducing the bureaucratic burden.

SOURCE: EL ECONOMISTA

CHIHUAHUA

With a 5.5% increase in industrial activity in the state of Chihuahua in the first quarter of 2023, compared to the previous month, the state ranked 17th in the national context, according to the Monthly Industrial Activity Indicator prepared by INEGI.

For our state, the sector that presented the highest growth was construction with 15.4 percent; then manufacturing industry with 4.6%; then electric power generation (3.4%), and mining (-1.6%), according to the Private Sector Competitive Intelligence Platform (PICsp) with data from INEGI.

SOURCE: HERALDO DE CHIHUAHUA

TAMAULIPAS

The cities of Tamaulipas have made a commitment to participate in the United Nations (UN) project to achieve harmonious coexistence between urban areas and the environment. This initiative, in which the Ministry of Foreign Affairs (SRE) also participates and is part of the 2030 Agenda, aims to prevent the impact of climate change.

Recently, the “Smart Cities” project was launched in Ciudad Victoria, the state capital. The main focus of this initiative is to develop more equitable and inclusive societies, foster economic development and preserve the environment in each region. Tamaulipas will have its own chapter and will involve civil society, including entrepreneurs and activists.

The Sustainable Cities in Tamaulipas project is a step towards a more equitable, inclusive and environmentally friendly future. With the participation of diverse actors of society, it is expected to promote concrete actions that promote sustainable development and contribute to the construction of more resilient and prosperous communities throughout the state.

SOURCE: CONTRA REPLICA

COAHUILA

With the new electric car cluster, over the next 15 years, the automotive industry in Coahuila will be generating twice as many jobs because these vehicles will be joined by the fact that internal combustion vehicles will be maintained for about that time, which will double the production of automobiles.

Governor Miguel Angel Riquelme assured this, pointing out that Tesla’s electric car plant to be built in Santa Catarina, Nuevo Leon, will be added to this, which is why the state’s economic future is promising.

SOURCE: EL SOL DE LA LAGUNA

SAN LUIS POTOSI

In March 2023, San Luis Potosi’s industry reported its third consecutive growth by advancing 6.7% compared to the previous month, revealed the National Institute of Statistics and Geography (INEGI) in its Monthly Indicator of Industrial Activity by Federal Entity (IMAIEF).

Together with Mexico City, Potosi’s industry showed the fifth-best performance.

SOURCE: LIDER EMPRESARIAL

AGUASCALIENTES

During the month of March, industrial activity in Aguascalientes grew .11 percentage points, with respect to the same month of the previous year, which places it at 7.8%; it should be noted that the sector in which the entity registered the most growth is in manufacturing.

SOURCE: EL SOL DEL CENTRO

GUANAJUATO

The 15th edition of Expo Mipyme, held on June 20 and 21 in Irapuato, exceeded expectations by reaching commercial agreements for 151 million pesos, more than initially announced.

Juan Francisco Martinez Arredondo, president of the Business Coordinating Council of Irapuato (CCEI), said that during these two days of business activity with buyers and suppliers, 1,275 people and 870 companies were brought together.

During these two days, there was the coexistence of different sectors such as: commerce-services; agri-food, chemical-pharmaceutical-cosmetology; ICT’s, handicrafts and developing industry, automotive, auto parts-metallurgy.

SOURCE: AM

QUERETARO

The local export industry is projecting double-digit annual growth this year, driven by market conditions and factors such as the relocation of suppliers (nearshoring).

The president of the Mexican Business Council for Foreign Trade, Investment and Technology (Comce), Queretaro chapter, Oscar Peralta Casares, explained that 2023 is advancing with good growth opportunities for the sector.

The relocation of suppliers and production centers is expected to translate into new industrial investments in the state, which, in turn, will have an impact on exports.

SOURCE: EL ECONOMISTA

JALISCO

Jalisco is the second state with the second highest growth in economic activity, growing 8.23% in seasonally adjusted figures, according to the latest report of the National Institute of Statistics and Geography (INEGI), on the Quarterly Index of State Economic Activity (ITAEE).

During this same period, the national growth rate was 3.9%, which means that the state presented a growth of more than double the national rate.

With original figures, Jalisco is the second state that contributed the most to the growth of the country’s real economic variation in the third quarter of 2022, by presenting a variation of 0.56 points.

SOURCE: GOVERNMENT OF JALISCO

CDMX

President Andres Manuel Lopez Obrador affirmed that the current mayor of Benito Juarez, Santiago Taboada, will be the opposition candidate for Mexico City mayor. The President once again affirmed that the opposition reached an agreement to choose Xochitl Galvez as their candidate for the presidency. However, this time he added that in such alleged meeting Taboada was also chosen for the capital city.

SOURCE: ARISTEGUI NOTICIASA

STATE OF MEXICO

Delfina Gomez, the governor-elect of the State of Mexico, and Alfredo del Mazo, the outgoing governor, officially began the transition process in preparation for the change in state administration. The first meeting took place at the Government Palace in Toluca, where the officials and their teams discussed governance, internal politics, and public security to ensure peace, order, and tranquility for the people of Mexico State. Both Gomez and Del Mazo expressed their willingness to work cooperatively and transparently for the well-being of the people. The transition process will consist of seven thematic meetings leading up to the government change on September 16. The teams aim to facilitate an orderly and transparent transition for the benefit of the residents of the state. Del Mazo emphasized that this exercise promotes democratic conditions of cooperation and dialogue necessary for a smooth transition.

SOURCE: PROCESO

INVESTMENT NEWS

NORTHEAST

BORGWARNER

US-based BorgWarner, a leading Tier 1 mobility solutions provider, broke ground on its new plant in San Luis Potosi with a $198 million investment and 380 new jobs for the manufacturing of electric motors, power electronic components, and electronic circuits for electric vehicles.

JOHN DEERE

John Deere, a renowned American company specializing in the production of machinery for agriculture and construction, is set to make a significant investment of $150 million in its plants located in Saltillo and Ramos Arizpe. This strategic move is expected to generate between 350 and 500 new jobs in the region.

SHANDONG WEIDA MACHINERY

The Chinese company Shandong Weida Machinery announced an investment of $15 million for the establishment of its operations in the Laguna Industrial Park, located in the municipality of Matamoros, Coahuila, Mexico. This move is expected to create approximately 100 new job opportunities in the region.

NORTHWEST KENWORTH

Kenworth Mexicana has allocated $40 million this year to improve its facilities at its plant in Mexicali, Baja California. Additionally, the company has invested over $18 million to expand its dealership network, renovate service workshops, and open new sales outlets for units and parts.

CENTRAL MEXICO

WALMART

To celebrate their 50th anniversary in Puebla, the American company Walmart will be opening 21 new branches in the state, making an investment of $52 million that will create approximately 860 new jobs in the state.

SAFRAN

French company Safran is investing $80 million in the expansion of its operations in Queretaro, Mexico, creating 800 high-skilled jobs and establishing a new aircraft engine test bench plant. This investment demonstrates Safran’s commitment to the Mexican aerospace industry.

CDMX

ULTRA AC DESARROLLOS

ULTRA AC Desarrollos presented its project to the State Government of Mexico, which is expected to generate approximately 15,000 new jobs in the capital area of the State of Mexico. An investment of $26 million is said to be made in the construction of this industrial park.

SOURCES: CLUSTER INDUSTRIAL, EL DIARIO DE COAHUILA, TELEDIARIO, MAGAZZINE, MILENIO, MEXICO INDUSTRY