EL PASO, Texas (Border Report) — As the United Auto Workers strike enters its fourth week, border trade officials begin to worry about its impact on Juarez, Mexico, production plants and El Paso supply chains.
UAW workers walked off their jobs at General Motors plants on Sept. 16 over a contract dispute. The strike immediately halted production at GM’s American factories and, on Monday, resulted in one of its plants in Coahuila, Mexico, idling more than 400 workers.
Last week, assembly plants in Central Mexico cut back production from five to four days and, in some cases to three days a week, said Alan Russell, CEO of the Tecma Group, an El Paso company that operates about 50 factories in Mexico on behalf of dozens of companies.
“They have a program in which they give employees partial pay for the days they are off. That’s the first time we have seen (the GM strike) have an impact in Mexico, but so far nothing in the Juarez area,” Russell said.
Local officials describe Juarez — which is across the border from El Paso — as a “GM town.” Production in factories there continues, but managers are seeing inventories dwindle.
“The strike didn’t happen from one day to the next; everybody knew it was coming. With GM being a diligent company, they made sure it was stockpiling production input good for at least two months, so we’re halfway there” said Jerry Pacheco, president and CEO of the New Mexico-based Border Industrial Association. “One full month into the strike you’re going to see some concern, but right now everyone is still in production.”
Trade experts say General Motors generates thousands of jobs in Northern Mexico and contributes to the economic well being of parts suppliers, transportation and logistics companies, consultants and other professionals north of the border. If the production plants in Juarez go idle, the effect will be immediately felt in El Paso and Southern New Mexico.
“Every day that goes by they dig into their inventory and it’s going to affect our region more and more,” Pacheco said. “Here in Santa Teresa (New Mexico), there’s some concern because we’ve got several automotive production plants that are suppliers” to that automotive industry.
Russell, of the Tecma Group of Companies, said he is optimistic that the UAW strike will be resolved and things will go back to normal. “I hope it happens sooner rather than later,” he said.
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