May 8, 2020 / 11:02 PM / 19 days ago

Mexico to unveil economic restart next week after coronavirus lockdown

MEXICO CITY (Reuters) - Mexican President Andres Manuel Lopez Obrador said on Friday he aims to present plans next week to reopen the economy, as key sectors like carmaking look to begin business again after over a month of quarantine measures to curb the coronavirus outbreak.

“They’re going to present me with an initial proposal on Monday,” Lopez Obrador told reporters during a regular news conference. “And we want to announce it to you and to the Mexican public on Wednesday or Thursday.”

The government has been under pressure at home and abroad to set out plans for a return to normal as it battles the pandemic that has killed nearly 3,000 people in Mexico.

One sector facing heavy pressure is the automotive industry, which is the backbone of Mexico’s manufacturing sector and closely integrated with the rest of North America.

Mexico’s auto production and exports collapsed in April as the pandemic shut car manufacturing plants and sapped consumer demand for new vehicles.

This week, General Motors Co (GM.N), Fiat Chrysler Automobiles NV (FCA) (FCHA.MI) (FCAU.N) and Ford Motor Co (F.N) said they were targeting resuming production in North America on May 18, but suppliers would need time to prepare.

Industry sources say May 18 is also seen as the tentative date for reopening the sector in Mexico, provided it gets a green light from Lopez Obrador.

“For now the plan is to (restart) May 18. This isn’t official and so far automakers have not made any announcements on this because they need the federal government’s endorsement,” said Cuitlahuac Perez, head of the automotive cluster in the central state of Aguascalientes which promotes the industry.

“If we do get the endorsement, then the ramp-up will be gradual because the production requirements we have received (from clients) show a reduction of over 30% compared to three months ago,” Perez said.

General Motors de Mexico is telling workers at its Silao facility in nearby Guanajuato state to get ready for a possible May 18 restart, according to two plant workers.

GM has sent safety tips to employees, which include taking their temperatures at the plant entrance and keeping a distance of 1.5 meters from other people, a company document showed.

GM Mexico said operations in Mexico cannot restart until the government gives them the OK.

“There is no confirmed date yet and we will not start until the Economy Ministry confirms the date when we can return to work,” the company said in reply to a query from Reuters.

Carmakers are being asked to fill out a self-assessment from the Mexican Social Security Institute (IMSS), which will then be used by the government to decide if workers can safely return to work and plants can reopen, two industry sources told Reuters.

The survey asks firms to rate their compliance with engineering, administrative, personal protective equipment and training standards aimed at keeping workers healthy.

FILE PHOTO: Mexico's President Andres Manuel Lopez Obrador holds a news conference at the National Palace in Mexico City, Mexico, March 17, 2020. REUTERS/Henry Romero

“It is self-evaluation but it’s also the measuring stick with which we will be measured,” said Perez.

Mexico on Thursday reported 1,982 new confirmed cases of the novel coronavirus and a record 257 fatalities, bringing the total to 29,616 cases and 2,961 deaths. The government says the true number of infected people is significantly higher, however.

The virus has deepened the mild recession that Mexico entered last year, and analysts are now forecasting the economy could shrink by up to around 10% this year.

Reporting by Anthony Esposito, Sharay Angulo and Daina Beth Solomon; Editing by Dave Graham, Jonathan Oatis, and Sonya Hepinstall

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