As every country figures out their own way to best deal with the global pandemic, cooperation between nations will soon become increasingly important.
According to a recent report from the Detroit Free Press, any plans for the American auto industry to kick back into gear will depend heavily on Mexico. The article points out that roughly 40% of imported auto parts come from Mexico. Additionally, plenty of auto parts made in the U.S. are, in turn, exported south of the border for auto manufacturing down there. As the Free Press puts it, ” the interdependency between the two countries cannot be overstated.”
No one is saying that globalization is a bad thing. We’re all one human race, after all. However, when different national governments have differing plans of when to allow businesses to re-open, this kind of conflict will be common. For example, the Big Three from Michigan are hoping to start production in mid-May. However, Mexico has declared everything will stay closed until at least May 30. Those timelines clearly don’t align.
One saving grace, though, might be the Mexican government making an exception. The Free Press reports that Mexico may allow its automotive industry to re-open, if the United States and Canada do the same.
“Automotive, like many industries, is an interconnected global supply chain, in particular for the car manufacturers located in North America,” said Joe Petrillo. He is the director of business development and advanced engineering for Meridian Lightweight Technologies, a company that supplies cast metal parts to the auto industry. “Portions of this chain through NAFTA (and continuing with USMCA), have welded key links of the chain together over the past several decades, such that they are no longer links on a chain but a rod that cannot be broken.”
The risk, of course, is that reopening businesses to soon kicks off a spike of infections. That would put us right back into lockdown. The auto industry, like everyone else, needs to proceed with caution.