SEGMENT 1
MEXICO SHUTS DOWN FOR CORONAVIRUS- In all, 18% of firms in Mexico are considered essential and are allowed to stay open. Alcalde said that of the remaining nonessential firms, 87% had closed and 13% had refused to do so.
President Andrés Manuel López Obrador also said he didn’t like businessmen going out to seek loans from international lending agencies, further angering the business sector.
Under U.S. pressure, Mexico pledged Friday to reopen automotive plants in a “gradual and cautious” process. On Monday, Labor Secretary Luisa Maria Alcalde praised some automakers for reducing or stopping nonessential parts of their operations.
The U.S. government launched a campaign to get Mexico to reopen plants, suggesting the supply chain of the North American free trade zone could be permanently affected if they didn’t resume production.
Mexico’s border assembly plants are key to the U.S. supply chain, including those of autos and defense contractors, and employees at some of the facilities have staged walkouts and protests because of fears over the coronavirus.
Ellen Lord, U.S. undersecretary of defense for acquisition and sustainment, had voiced similar concerns Monday in Washington.
“We are seeing impacts on the industrial base by several pockets of closure internationally. Particularly of note is Mexico, where we have a group of companies that are impacting many of our major primes,” she said Alcalde publicly shamed some textile and footwear firms, as well as a department store chain, for not obeying closure orders for nonessential businesses.
SEGMENT TWO
Private business group arranged a huge loan to help small and medium size businesses affected by the coronavirus pandemic. AMLO objects.
López Obrador appeared to oppose a $3 billion credit arrangement that a leading business association announced with an investment arm of the Inter-American Development Bank to supply loan-type products for small and medium firms in Mexico hit by the effects of the pandemic.
Inter-American Development Bank and Mexican Business Council (60 of Mexico’s largest businesses) Loans for up to 30,000 businesses.
$12 billion a year IDB says there are 4.1 million small and medium sized businesses in Mexico; they contribute 42% of Mexico’s Gross Domestic Product and 78% of all jobs in Mexico.
Meanwhile, AMLO is cutting the Mexican federal budget and up to 17,000 small and medium sized businesses are expected to take a hit.
The austerity-minded López Obrador had vowed not to acquire new debt, and said the loan arrangement would not be backed by public funds or government guarantees. He said he also didn’t like that business groups had arranged the deal behind his back.
AMLO has no problem on writing off billions of dollars when he shut down construction on Mexico’s new airport and pledging millions of pesos to build a new oil refinery in his home state, or in starting a “Maya Train” in Yucatan or in founding a national bank for poor people -- but he objects to private people arranging a private loan to help small and medium businesses survive the great national shutdown of business the country has suffered.
AMLO said --“I don’t very much like the way they reached an agreement and want to impose their plans on us,” the president said. “Wha...
