Mexico Stirs Confusion Over When the Auto Industry Can Reopen

(Bloomberg) -- Mexico sowed confusion over how quickly the car industry can resume operations in the country, with two ministers making potentially conflicting back-to-back announcements.

Hugo Lopez Gatell, Mexico’s deputy health minister said late Wednesday that companies in the automotive, construction and mining sectors can only work at full capacity after June 1. The pronouncement came hours after the nation’s economy minister initially said Wednesday that the industries would be deemed essential starting May 18 as part of a broader plan to reopen the economy.

Some automakers already have begun to slowly restart production in the U.S., though scaling up likely will require Mexico’s parts supply chain to get back up and running again. Companies including General Motors Co. and Fiat Chrysler Automobiles NV also have major vehicle factories south of the U.S. border.

Lopez Gatell said the industries will be allowed to work at complete capacity in June as long as health-safety standards are implemented. He said companies will be notified of the new requirements on Monday.

“It’s very important that there be clarity given to this situation so that the suppliers and the automakers can plan their production accordingly,” said Sig Huber, a consultant at Conway Mackenzie. “If in fact the suppliers are not allowed to come back up until June 1, then that is going to have an impact on the ability for suppliers and original-equipment manufacturers in the U.S. to be able to run.”

The confusion is the latest snag between the two countries, after U.S. companies complained last month that Mexico’s stricter definition of essential businesses had disrupted their supply chains.

A spokesman from Mexico’s automobile association AMIA said the group was in the process of seeking clarification from the government.

GM, which had hoped to start producing vehicles in Mexico as soon as next week, is still evaluating the government’s directive, spokesman Dan Flores said. The company is sticking with plans to restart the majority of its plants in the U.S. and Canada on May 18, he said.

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