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Reopening Mexico’s Manufacturing Industries During COVID-19

Reopening Mexico’s Manufacturing Industries During COVID-19

With the arrival of COVID-19 in North America the federal government of Mexico began issuing decrees in March of this year to prevent spread of the virus and protect its citizens. The first decrees dealt with keeping the vulnerable like the elderly, immunocompromised and pregnant women, at home. Just as with other countries around the world, when cases started to increase the government mandated the temporary closure of non-essential businesses. This included various sectors in Mexico’s manufacturing industries.

Mexico’s manufacturing industries employ hundreds of thousands of workers under their maquiladoras. From engineers to assembly line workers in the electronics, aerospace, medical device, and auto parts industries. Around 50% of manufacturing facilities or maquiladoras temporarily closed during the period of March to the end of May, with most reducing production and staffing in order to maintain safe distancing.

CPI assisted all of their shelter manufacturing program clients in obtaining “Essential Business” certification so they could remain operating with all of the health and safety measures required to keep employees safe. Only one of CPI’s clients was asked to temporarily close. In one week’s time CPI helped this client get permission to reopen.

Mexico’s Manufacturing June Restart

Between Monday June 1st through Friday June 5th about 78% of the maquiladora industry gradually began resuming operations with ramp up scheduling for the following 4 to 6 weeks so long as there is a correspondent gradual descent of COVID-19 related cases and deaths.

Most foreign manufacturing companies in Mexico that are beginning to reopen will operate at 25% - 65% capacity, dependent on the nature of their manufacturing process and the square footage to headcount ratio available to keep distancing at min 6 feet apart.

CPI Working with Manufacturing Clients During Closure and for Reopening

Prior to the temporary closure of non-essential businesses in Mexico, CPI began working with their manufacturing clients to maintain a safe environment for their staff. CPI issued best practices for running manufacturing facilities during the pandemic that included hygiene protocols, temperature checks, safe distancing, shift adjustments, production reduction, along with aggressive disinfecting and cleaning strategies in employee work areas.

When some of CPI’s clients were temporarily mandated to close, CPI’s HR team helped with payroll for furloughed workers. In regard to import and export between the U.S. and Mexico, CPI notes that there were some delays in customs processing during the height of the pandemic, but no shipments were canceled or returned.

Now mid-June, the Mexican government is allowing manufacturers to slowly reopen. CPI is actively and directly assisting our clients and shelter program clients with the formal documentation required for approval to reopen. In addition to hygiene best practices, CPI is providing our clients with the list of guidelines issued by our health authorities for their direct and indirect personnel.

CPI is also reviewing and vetting vendors that are qualified to provide PPE, accessories and consumables as well as technology (i.e. thermal cameras), ingress/egress infrastructure (i.e. sanitizing tunnel), indoor prevention (i.e. sanitizing via nebulization) and negotiating group pricing so that we avoid making purchases from unqualified or opportunity seeking providers of this equipment.

Impact on the Supply Chain, China, Reshoring

Prior to the COVID-19 pandemic, the U.S.-China Trade War spurred foreign manufacturers to diversify their supply chain with some reshoring production to North America. Mexico has been the top location for these facility moves and expansions due to the low-cost, highly skilled workforce, its proximity to the United States, and more favorable and stable trade relationships.

The COVID-19 health crisis is a worldwide issue and hasn’t put Mexico at a specific disadvantage. The benefits of manufacturing in Mexico still exist. Coupling the trade war and the supply chain issues from overseas, companies have begun to bring manufacturing closer to home.

The Future of Manufacturing in Mexico during COVID-19

The COVID-19 health crisis is still ongoing around the world. Mexico, like other countries, has developed a color-coded system based on reported positive cases and deaths due to the virus and the corresponding restricted activities. Mexico is currently in the Red. Full manufacturing operations will be permitted once Mexico reaches Green.

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ico flag usaUSA Corporate Office
Ph: 619.429.4344 / 855.480.0837
8716 Sherwood Terrace
San Diego, CA 92154 USA

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Ph: 855.480.0837
Blvd. Corredor Tijuana-Rosarito 2000
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Specialists In Establishing Manufacturing Operations In Mexico

8716 Sherwood Terrace
San Diego, CA 92154 USA
619.429.4344 / 855.480.0837