General Motors is hoping it can resume building vehicles in Mexico as soon as next week, but Mexico on Thursday sent mixed signals about when full auto production will be allowed.
Mexico’s leading spokesman for the coronavirus contingency, Assistant Health Secretary Hugo Lopez-Gatell, said the automotive industry could begin preparations next week but not fully restart operations until June 1, according to media reports Thursday. The period from May 18-31, he said at a press conference, was for plant modifications and safety courses to ensure physical distancing and other measures.
Likewise, the federal government published guidelines in its Official Gazette on Thursday that defined the two-week period prior to June 1 as a time for the elaboration of safety protocols. The financial newspaper El Economista quoted a top industry leader as saying automotive suppliers would resume on June 1.
In response, a GM spokesman said: “We are still evaluating the direction of the Mexican Government, but our plan remains to restart the majority of our U.S. and Canadian plants on May 18.”
Reopening manufacturing facilities throughout North America is important for the Detroit 3 automakers and foreign brands that produce vehicles in the U.S. Carmakers rely on Mexico for critical parts and GM and Fiat Chrysler Automobiles manufacture trucks there that generate a big chunk of their profits.
GM’s three vehicle-assembly plants in Mexico, including a full-size truck factory in Silao, could start up as early as next week in compliance with conditions set by the government, said people familiar with the matter told Bloomberg earlier on Thursday before the government revised its position.
Restarting pickup production in Mexico would be a big boost for GM. The automaker planned to ramp up output of its redesigned Chevrolet Silverado and GMC Sierra trucks last fall but was forced to halt output during a 40-day strike in the U.S. Then, just as sales momentum and inventory were building early this year, the COVID-19 pandemic hit and forced GM to shut down North American production in the middle of March.
GM also operates assembly plants in San Luis Potosi, which makes small crossovers including the Chevrolet Equinox, and Ramos Arizpe, where mid-size crossovers such as the Chevy Blazer are manufactured.
Mexico’s general health council on Wednesday added auto manufacturing, construction and mining to its list of essential activities, enabling those three sectors to resume operations starting May 18 if they meet certain safety protocols. GM initially believed its plants meet those standards and has shared its practices with local suppliers, one of the people told Bloomberg.
Many automakers will benefit from the country’s lifting of production suspensions, as about 80 percent of the wiring harnesses used in U.S.-made vehicles cross the border with Mexico, according to the Center for Automotive Research.
Laurence Iliff, Hannah Lutz and Bloomberg contributed to this report.