SIM REPORT: Latin America & the Caribbean, Issue 5
In mid-April, factory workers in several Mexican border cities staged protests over unsafe working conditions following the deaths of colleagues from suspected coronavirus (COVID-19). Protests were held in cities including Tijuana, Ciudad Juárez, Mexicali, Matamoros, and Reynosa, with images published in the press showing employees standing outside their workplaces and holding handwritten signs detailing their concerns. The demonstrations were staged after workers at several companies’ facilities were reported to have died from respiratory illnesses, likely including COVID-19. Affected companies include Honeywell International, Lear Corporation, Regal Beloit, and Poly. Workers have also criticised some firms for continuing operations perceived as non-essential, while a report from labour rights group Border Committee of Workers (CFO) described reports of inadequate sanitary conditions, including a lack of soap in bathrooms and dining halls.
Manufacturing facilities along the Mexican side of the US-Mexico border, or maquiladoras, are a major part of Mexico’s export-oriented economy and integrated North American supply chains, employing well over a million workers in the border area. Across North America, multiple economic sectors’ supply chains feature manufacturing plants along the Mexican border, including aerospace and defence, healthcare, and the automotive industry. Mexico’s manufacturing sector has long relied on the predictable functioning of the US-Mexico border for the movement of people and cargo, stable economic conditions and labour rights, as well as amicable political and commercial relations between Mexico, the US, and Canada, whose annual trilateral commerce is worth around USD1.2 trillion. In the past four years, however, such stability has been partly upended by US President Donald Trump’s unpredictable stance on trade and harsh rhetoric on immigration, as well as uncertainty regarding the economic policies of Mexican President Andrés Manuel López Obrador.
Although the cross-border flow of goods has not been restricted during the COVID-19 pandemic, measures to contain the spread of the virus have exacerbated supply chain fragilities. A particular problem for the region’s integrated supply chains is the divergent public health responses from the governments of Mexico, the US, and Canada. For example, unlike the US and Canada, Mexico did not classify companies in the aerospace and defense industries as ‘essential’ when it imposed a nationwide health emergency in late March. This prompted disruption to supply chains in those industries in the US and Canada, and led the US government and Mexican aircraft producers to urge Mexican authorities to re-open facilities, particularly in the aircraft supply chain. Companies in the healthcare sector have also been impacted, with producers of heavily in-demand ventilators reporting problems acquiring motors. Mexico’s government has, however, announced the re-start of operations in the automotive sector under strict sanitary and social-distancing guidelines.
In the one-month outlook, there is a moderate-to-high likelihood of further protests against factory operations in northern border cities. This is particularly the case in industries that workers perceive as non-essential, and in factories where social-distancing and sanitary guidelines is not possible or facilitated. Workers are also likely to demand increased access to personal protection equipment, including facemasks and rubber gloves, on site. There will also likely be calls for further coordination in the public health responses of the region’s countries, in order to minimise the impact of factory closures on supply chains.
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