Category Archives: Mexico

Mexico trade spat raises fears in farm belt as Latin American nation looks to ‘Plan B’

Getty Images A farmer harvests corn in Burlington Iowa.

There’s growing concern in agriculture industry about fallout from anti-Mexico rhetoric in the Trump administration hurting American farmers.

The prospect of a trade war with Mexico is particularly troubling for some in the nation’s farm belt given low-commodity prices last year hurt U.S. farm incomes and this year also looks to be tough. Furthermore, many of the key farm states where President Donald Trump found the strongest support in the election could suffer the effects of a trade war with Mexico.

“Mexico is a huge market for the agriculture economy of the United States,” said Kurt Hora, who grows corn and soybeans on about 1,800 acres in southeast Iowa and raises thousands of hogs. “We want to make sure we continue to get market access down there.”

Read the full story on CNBC

Motorola brings Talkabout radios to Latin America

Motorola Solutions has announced the launch of two models in its Talkabout family of radios in Latin America. Designed to enable instant communications between group members without consuming mobile phone airtime or worrying about signal strength in remote areas, the radios are aimed at families and outdoor enthusiasts. The T400 model features a built-in LED flashlight, hands-free capability, a range of up to 56 kilometers and a weatherproof design. The smaller T200 has a range of up to 32 kilometers, dual micro-USB connectors, 2 channels and 121 privacy codes.

Motorola said the radios will be available at small and large stores in Argentina, Brazil, Chile, Colombia, Mexico, Panama, Paraguay, Peru, and Uruguay.

Megacable and Televisa pledge to end anti-competitive practices

Mexican pay-TV operators Televisa and Megacable have pledged to end their monopolistic practices in a plan submitted to the country’s Federal Telecommunications Institute (IFT), according to local press.

The IFT agreed to close its probe after the companies promised to abide by a series of mechanisms put in place to ensure competition. The agreement comes after Megacable was fined MXN 33.5 million and Televisa’s unit Cablevision MXN 8.73 million back in February 2014 on the grounds of collusion in the distribution of pay-TV and triple play services to consumers in the state of Mexico.

6 reasons why Ford and other international firms are investing in Mexico

The announcement of Ford’s decision to build a new plant in Mexico created a political firestorm this month, yet it forged ahead anyway.

The automaker has been in the political spotlight from the left and right since last summer when it said it planned to move production of the Ford Focus from Michigan outside of the U.S. by 2018.

The reaction on Tuesday was swift and predictable after Ford said it would invest $1.6 billion to build a new plant in Mexico on the day voters headed to the Wisconsin polls in a heated presidential primary.

Ford — which says it wants to increase profit on small cars — was undeterred.

Ford in Mexico
Mexico has overtaken Brazil as the leading auto manufacturing country in Latin America. (PHOTO: Panamericanworld.com)

Here are six reasons why:

1. Mexico’s numerous free-trade agreements provide flexibility: We’re not talking just about the North American Free Trade Agreement, which was signed into law in December 1993 by President Bill Clinton.

NAFTA is just one of several trade agreements Mexico has with other countries. In addition to NAFTA, Mexico has 10 other free trade agreements covering 43 countries, according to ProMexico, an economic development arm of the Mexican government.

This gives Ford the flexibility to ship cars from Mexico to the U.S., Canada and to countries in South America.

2. Efficient logistics: Automotive executives also say Mexico’s ports and rail systems make it easy to export cars out of the country. Joe Hinrichs, Ford’s vice president and president of the Americas, said Mexico’s robust transportation logistics are among the reasons Ford is expanding in Mexico.

3. Lower wages: Ford’s labor costs in Mexico have always been much lower than in the U.S.

U.S. autoworkers made, on average, just under $30 per hour compared with just more than $5 per hour in 2014, according to Kristin Dziczek, director of the labor and industry group at the Center for Automotive Research in Ann Arbor.

In November, the UAW pushed Ford as well as General Motors and Fiat Chrysler Automobiles to agree to essentially eliminate an entry-level wage structure put in place in 2007 that lowered the automaker’s U.S. labor costs and led to the addition of thousands of jobs in the U.S.

Over time, all of Ford’s entry-level workers in the U.S. will see their wages increase to about $29 per hour. While the UAW has touted the raises as a huge win for U.S. workers, it also widens the labor cost gap with Mexico.

Hinrichs declined to comment directly on the impact of that new contract when he spoke with the Free Press on Tuesday but did acknowledge that “labor costs” were among the factors.

4. Keeping up with the competition:

Ford is hardly alone in its decision to invest more in Mexico, and Ford cannot allow political pressure to interfere with its ability to compete with other automakers that are also expanding in Mexico.

In recent years, General Motors, Honda, Hyundai, Nissan, Mazda, Toyota and Volkswagen have all announced plans to either expand existing plants or build new ones in Mexico. Fiat Chrysler Automobiles also has said it is considering an expansion of its production there.

Currently, four other automakers produce more vehicles in Mexico than Ford. They are: Nissan, GM, Fiat Chrysler and Volkswagen Group.

Ford to build a new car plant in Mexico, sources say (Photo: inautonews.com
Ford Motor Co. plant in Mexico (Photo: inautonews.com)

5. Existing presence in Mexico: Ford has been building cars in Mexico since 1925, and it’s been working pretty well.

Ford already operates two assembly plants, two stamping plants and an engine plant in Mexico. It builds the Fiesta, Fusion, Fusion Hybrid, Lincoln MKZ, Lincoln MKZ Hybrid, four-cylinder and diesel engines in Mexico, and the quality of those products has long been on par with its American-made products.

6. Still committed to the U.S.: It’s not like Ford is pulling up stakes and moving to Mexico. The automaker is still investing heavily in the U.S., and It’s worth noting Ford’s talking points on this issue.

Last year, Ford built 2.5 million cars and trucks in the U.S. — more than any other automaker.

Since 2011, Ford has invested $10.2 billion in its U.S. plants. And over the next four years, will invest $9 billion more. That investment is expected to create or retain 8,500 U.S. jobs.

Last year, Ford invested $168 million at its Ohio Assembly plant to build heavy-duty trucks at that plant that were previously made in Mexico. The investment helped to keep more than 1,000 hourly workers employed. The UAW and Ford negotiated the move of the truck production to Ohio way back in 2011, as part of their last round of contract talks.

This post first appeared on Detroit Free Press.

America Movil profit drops as Mexico competition grows

The America Movil logo is seen on the wall of the reception area in the company’s corporate offices in Mexico City August 12, 2015. REUTERS/Henry Romero 

America Movil said on Wednesday first-quarter profit fell more than 40 percent from a year ago, as mobile competition from AT&T Inc intensified in Mexico and it started paying rent on cell towers after a sweeping regulatory overhaul.

The 2013 overhaul was aimed at curbing America Movil’s 70 percent market share in Mexico by forcing it to share cell towers and other equipment with rivals, and letting them connect calls to its network for free.

The company, which had long dominated Latin American telecommunications, was pressured to spin off its cell towers in 2015 into a new company, which it now pays rent to. AT&T, which had been America Movil’s partner for more than two decades, entered Mexico’s market on its own in late 2014 by buying up the No. 3 and No. 4 carriers.

America Movil, controlled by the family of billionaire Carlos Slim, said in a statement that the margin on its Mexico earnings before interest, tax, depreciation and amortization (EBIDTA) hit a new low of 35.7 percent in the first quarter. The margin has fallen every quarter since the reform.

Read the full article on Reuters.

Outside experts condemn Mexico’s inquiry into 43 missing students

Inter-American Commission on Human Rights cites errors and omissions in official investigation and points to signs of torture used against suspects

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Outside experts investigating the September 2014 attacks on 43 trainee teachers delivered a devastating final report on Sunday, finding inconsistencies, errors and omissions in the government’s official investigation, along with evidence of suspects being tortured.

The five-member expert team from the Inter-American Commission on Human Rights (IACHR) also accused the federal government of failing to fully cooperate with their investigation and of allowing a smear campaign to assail their work in an attempt to discredit the final report and harass them out of the country.

“In a context of strong polarization in Mexico, the [IACHR team] has become an object utilised by some to generate greater polarisation,” the team said in its final report, delivered to a packed audience of the students’ families and civil society groups. The audience shouted back: “Don’t leave!”

Absent from the presentation were the Mexican public officials responsible for human rights, whose chairs remained empty through the two-hour reading of the report. It was another a sign of the strained relations between the Mexican government and IACHR, which in recent months encountered a spate of unflattering stories in publications sympathetic to the president and his party. The group even had its executive secretary investigated by Mexican prosecutors for mismanaging public moneys, allegations that were later found baseless.

“The group has suffered a campaign trying to discredit people as a way to question their work,” the report read. “Certain sectors are not interested in the truth.”

Read the full article on The Guardian.

Mexico finmin, Pemex CEO to meet investors in New York

The chief executive of Petróleos Mexicanos and Mexico’s finance minister will travel to New York early next week to meet with investors, two officials said on Friday.

The trip follows the announcement this week of measures by Mexico’s federal government to improve the ailing finances at the state-owned oil company, which is widely known as Pemex, including a $4.2 billion liquidity injection.

“They will take part in a roadshow with investors,” said one Mexican official, adding that Pemex CEO Jose Antonio Gonzalez Anaya and Finance Minister Luis Videgaray will be joined by Juan Pablo Newman, the oil company’s chief financial officer.

Another official, also speaking on condition of anonymity, confirmed the meetings would take place and said they would be closed to reporters.

Pemex has faced two years of steep budget cuts as world crude prices plunged and its output has declined by over a third to an average of about 2.2 million barrels per day (bpd) from 3.4 million bpd in 2004.

Read the full article on Reuters.

Mexico announces over $4 billion in aid for struggling Pemex

MEXICO CITY (AP) — The government announced more than $4 billion in aid Wednesday for state oil company Petroleos Mexicanos, whose finances, production and exploration projects have been hit by the fall in crude prices.

The package will include a direct infusion of $1.5 billion to the company better known as Pemex, the Treasury Department said in a statement. The government will also provide over $2.6 billion to pay company pensions and retirements this year.

In return, the government wants Pemex to commit to reducing its liabilities and debt by the same amount.

“The adverse economic conditions that the hydrocarbons sector is going through on an international level and the depletion of different wells have weakened Pemex’s financial situation,” the department said in the statement.

Pemex reported in March that it had secured lines of credit to pay 85 percent of its vendors. The company closed 2015 with around $8.4 billion in debt, of which it paid $1.1 billion in the first quarter.

In late February, Pemex announced it was cutting about $5.5 billion from its 2016 budget, mostly in exploration and production.

Mexico’s oil production peaked in 2004 at about 3.4 million barrels a day but has since slid to about 2.2 million a day today.

President Enrique Pena Nieto sought to modernize the company and improve production by pushing through legislation that opened up Mexico’s energy sector to some private investment for the first time in decades. But the law was followed closely by the global plunge in oil prices, crimping the country’s oil ambitions.

Mexico replaces top U.S. diplomats, citing hostile climate

Mexico’s President Enrique Pena Nieto delivers a speech during the 78th anniversary of the expropriation of Mexico’s oil industry in Mexico City, March 18, 2016. REUTERS/EDGARD GARRIDO

Mexico’s government on Tuesday unexpectedly changed two of its top officials responsible for U.S. relations, citing concerns about an increasingly anti-Mexican climate across the border.

Carlos Sada, previously the consul in Los Angeles, was named ambassador to the United States while Paulo Carreno, one of President Enrique Pena Nieto’s communications chiefs, was appointed the deputy foreign minister for North America.

The new ambassador must still be approved by the Senate.

“We have been warning that our citizens have begun to feel a more hostile climate,” Foreign Minister Claudia Ruiz Massieu told local radio after the announcement.

Read the full article on Reuters.

Uber is now making one-way trips across the US-Mexico border

Uber announced this week  that it would start taking passengers across the US-Mexico border for the very first time, from San Diego to Tijuana. But getting back will be trickier, thanks to the regulations that govern ride-hail companies like Uber.

Before, ride-sharing passengers would have to take a car to the border, get out, cross into Mexico, and then call another car to take them into Tijuana or somewhere on the Baja peninsula. Now riders equipped with the necessary documentation — i.e., a US passport — can take the same car all the way into Tijuana. Uber calls it “a new way to foster cross-border business opportunities by facilitating accessible and reliable transportation.”

Read the full article on The Verge.