car manufacturer
Reuters

Hundreds of thousands of Mexican automotive workers will soon lose their jobs because some of the international automotive manufacturers that are based in Mexico will suspend operations according to a recently published article out of Mexico.

AUTOMOTIVE INDUSTRY IN MEXICO

The automotive industry is one of the sectors in the country that has a high value. The industry is contributing 3.6 percent Gross Domestic Product every year. This makes the level of competition and its quality comparable to China, India, South Korea, and Brazil.

There are many international automotive plants that are based in Mexico and this somehow helped employ hundreds of thousands of Mexicans. However, with the economic effect brought by COVID-19, it seems that many Mexican families will get hungry in the coming days due to the suspension of operations.

Moreover, the country produced more than 3.9 million cars every year and making Mexico as the 6th largest producer of cars in the world. Mexico is below Germany but above South Korea.

Here are some states who benefited in the automotive industry in the country in terms of employment:

  • Aguascalientes
  • Nuevo Leon
  • Morelos
  • Guanajuato
  • San Luis Potosi
  • Coahuila
  • Puebla
  • Sonora
  • State of Mexico
  • Jalisco
  • Baja California

There are around 43 plants that are based in Mexico and it has employed more than 500,000 jobs. If these automotive manufacturers will suspend its operation even just for a month, it means that around 2 million Mexicans will be affected.

SUSPENSION OF AUTOMOTIVE INDUSTRY

It was previously reported by Latin Post that car manufacturers in Mexico may suspend its operation due to lack of key parts that are shipped from China.

It was also reported that the minister of economic development for Aguascalientes Manuel Gonzales said that he did receive reports and calls from his office that some of the car manufacturers are now running out of supplies.

Recently, BMW said that they will reduce their workforce into half. Their employees will be divided into two. The first half will work for one week and a half while the other half will rest at their home. Meantime, at the end of their post, the other half will work and the first half will rest also at their home.

General Motors Co. also have their own scheme of suspending their operation. According to the company, they will have an orderly suspension of work due to the negative economic impact brought by COVID-19.

President and Chief Executive Officer of General Motor's Mary Barra said: "GM and UAW have always put the health and safety of people entering GM plants first, and we have agreed to a systematic and orderly suspension of production to help combat COVID-19".

The suspension of automotive manufacturers in the country is very alarming because it could lead to a recession. Mexico has the second-largest economy in Latin America and was expected to have big economic development this year before the country was hit by COVID-19.

However, it is believed that Mexicans can survive in this situation because of their culture that values family. They could either ask help from their relatives and borrow some money and have it paid once everything goes back to normal.

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