Detroit Collapse Would Fuel Mexican Crisis

Mexican auto industry, economy tied to America's
By Matt Cantor,  Newser User
Posted Dec 9, 2008 10:20 AM CST
A man and a girl walk past a General Motors plant in Toluca, Mexico, Tuesday, Feb. 12, 2008.    (AP Photo / Marco Ugarte)
camera-icon View 2 more images

(Newser) – A Big Three collapse could spell disaster for Mexico, where the auto industry—and the economy—is tightly bound to America’s, the Christian Science Monitor reports. Mexico sends 80% of its auto-related exports to the US, and its auto industry employs more than 500,000 workers, many of whom would travel northward in a crisis, preferring to “wait out” hard times in the US, says a labor expert.

“The biggest impact will be on auto supply companies, and there will be big problems in border towns (like) Tijuana and Ciudad Juárez,” he notes. Analysts say US exports this year are likely to fall 6%, the biggest drop since 1995; among auto suppliers, 5,000 jobs have already disappeared. But all is not lost—Mexico’s hope depends on the production of fuel-efficient cars and continued exports to Asia, Europe, and Latin America, a consultant says.