Weekly Report 107 by PRODENSA

GENERAL SITUATION IN MEXICO

Weekly Review #107 I June 1, 2022

MANUFACTURING INDUSTRY MEXICO ACCEPTS U.S. REQUEST TO INVESTIGATE LABOR SITUATION AT PANASONIC PLANT The government of Mexico accepted the complaint filed by the government of the United States regarding the possible denial of freedom of association and collective bargaining rights at the Panasonic Automotive Systems de Mexico plant in Tamaulipas. This was announced by the Ministry of Economy, which explained that the complaint was admitted on May 26. Since then, it has been working jointly with the Ministry of Labor and Social Welfare to review the case and determine whether or not the workers’ rights were violated. The complaint was filed on April 18 by the National Independent Union of Industrial and Service Workers “Movimiento 20/32,” headed by Rosario Moreno, in which it was pointed out that union dues were withheld, despite the fact that the workers had already voted for the disappearance of the collective bargaining agreement in force. Specialists consulted refer that it will be a challenge to present a remedy in this particular complaint since the company is in the middle of a process of a strike call, but also in view of the half application of the new labor model since, in Tamaulipas, the labor reform will be in effect until October 2022. Likewise, there is a collective bargaining agreement filed before the Local Concilia-

MANUFACTURING INDUSTRY

tion and Arbitration Board, the competent authority, by the Reynosa Maquiladora Autonomous Industrial Union, affiliated to the Confederation of Mexican Workers, whose leader is Alberto Lara Bazaldua; it will have to be defined if it is within the framework of the law. A response is expected from the Secretary of Labor, since there are no “labor judges” in that entity to determine whether or not the strike summons filed by the National Independent Union of Industrial and Service Workers Movement 20/32 (SNITIS), which is suing for the signing of a contract title, proceeds or not. According to the complaint filed, the union organization headed by Rosario Moreno stated that it is essen-

SOURCE: El Economista

tial that the U.S. government immediately suspend the entry of goods into U.S. territory from Panasonic Mexico’s facilities, in accordance with Section 752(a) of the T-MEC Implementation Act. Also, “immediately suspend dues deductions to the Sindicato Industrial Autonomo de Operarios en General de Maquiladoras de la Republica Mexicana (SIAMARM) and reimburse workers for all union dues deducted since March 25, 2022.” In addition, to terminate the contract signed between Panasonic Mexico and SIAMARM and order the company to negotiate in good faith with the SNITIS union after winning the election to represent the workers.

MANUFACTURING INDUSTRY EXTENDING VACATION DAYS IN MEXICO IS AN ACT OF COMPETITIVENESS

The outlook for working people in our country to have a good work-life balance is not optimal. Long working hours, low productivity, and little time to take vacations are signs that show that the challenge is not minor, acknowledges Mario Lopez Roldan, director of the OECD Mexico Center for Latin America. In the framework of the National Work-Family Balance Day, which is commemorated every June 1 since 2019, the new director of the office of the Organization for Economic Co-operation and Development (OECD) in the country emphasizes one of the pending issues that must be faced in this field: the right to take vacations. Mexico is one of the countries in the world with the lowest number of guaranteed vacations in labor legislation, with a minimum of six days after the first year of

SOURCE: El Financiero

work, which gradually increase after the second year. The average in Latin American countries is 16 days, and the recommendation of the International Labor Organization (ILO) is 18 days. “We are excessively behind in this field. If you see this in perspective, with six days of legal vacation per year, it is evident that we are lagging behind and that it is urgent to modify the labor law”, says Mario Lopez Roldan in a conversation with El Economista. The country’s labor data are particular since Mexicans work the longest hours of all OECD countries, with an average of 2,124 hours per year. The average of the nations that make up the organization is 1,687 hours per year, and Germany, the best positioned, registers 1,332 hours per year.

MANUFACTURING INDUSTRY

In addition, the proportion of people with excessive working hours is also the highest in the organization. According to the latest data from the National Occupation and Employment Survey (ENOE), 16.1 million people, 28.5% of the labor force, work more than 48 hours per week, the legal maximum. This figure is 16% higher than reported at the beginning of 2020, before the pandemic. What is contradictory about these figures, points out Mario Lopez Roldan, is that Mexico is one of the OECD countries that, despite being the place where most people work, has one of the lowest levels of productivity, surpassed at the bottom of the table only by South Africa and Colombia. This shows that working time is crucial in the design and performance of the labor market, as, among other things, it can affect workers’ well-being, productivity, wages, and employment. “Rest is fundamental to improve productivity, creativity, innovation, and labor power. The diagnosis is very clear: all data point to a tremendous lag (...) Taking vacations is an act of competitiveness, an act of productive improvement, and an act of excellence. It is necessary to understand how the most advanced countries are managing to have such high productivity levels with very high levels of vacations”, he points out. Last March, the Labor Commission of the Senate of the Republic began the analysis of three reform proposals to the Federal Labor Law (LFT) from different parties to increase the minimum vacation time to which people are entitled. The consensus, so far, is to increase it to 12 days as from the first working year.

SOURCE: El Economista

KEY POINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S Morning Press Conference May 24– 31,2022

INTERNATIONAL • Ambassador Ken Salazar’s visit to the National Palace: He detailed that U.S. companies (between 15 and 18 companies) want to invest in Mexico in the energy sector and other sectors, such as transportation. He emphasized that a commitment was made to receive them and attend to them. Regarding the companies that want to invest in fertilizer plants, the President highlighted the importance of fertilizers after their scarcity due to the Ukraine-Russia conflict. He mentioned that the investment will be made in Sonora. - On the other hand, Mr. Lopez Obrador pointed out that the U.S. government has not invested in Central America since President Trump’s administration, 4 billion USD were announced, but the U.S. Congress has not approved them in 5 years. However, this Congress approved 35 billion USD to purchase arms in Ukraine. I point out that this is not a reproach but what is happening. He pointed out that Claudio X. Gonzalez is financed by the U.S. government along with Amparo Casar. He referred that he respects the Ambassador, but issues of financing by the government of that country will not be allowed because it is graft. • Summit of the Americas. When questioned if he will attend the summit, the President answered

that he was waiting for the invitations to be issued to all the countries of the Americas and that no one will be excluded. He pointed out that he will wait for the formal answers, and from there, he will make a decision. He revealed that he spoke with his Argentinean counterpart, with whom he commented that the Argentinean Constitution does not contemplate the adherence to the principles of non-intervention, as does the Mexican Constitution. He stressed that it is time to peacefully resolve differences, ideologies, and fanaticism. We must stop thinking in an elitist manner, act responsibly, and think of the people. He pointed out that Cubans are not to blame for an ideological quarrel caused by a blockade. There can be no interest of the top echelons above the general interest. • Julian Assange Case: Regarding the extradition of Julian Assange of Wikileaks, the President mentioned that there had been communication with the SRE to see if he is offered asylum; he is in favor of his release because he is a politically persecuted person. HEALTH • The Decree banning circulation and sale of electronic cigarettes and vapers: President Lopez Obrador, the Secretary of Health and the representa-

KEY POINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S that on the President’s instructions, a state policy is being sought, not a state policy, to federalize health services for the population without social security. After an x-ray in Sinaloa, different needs were detected, such as equipment like refrigerators for vaccines. Today, before the head of the federal executive, a framework agreement was signed with the governor to continue the actions with a very specific work plan. - Zoe Robledo reported the progress of the National Recruitment and Hiring Day for Doctors and Medical Specialists; of the 13,765 positions offered, there are already 4,040 that have an application. However, there are 9,725 without applications. INFRASTRUCTURE

tive of the World Health Organization in Mexico, signed the Decree prohibiting the circulation and commercialization of vapers and electronic cigarettes. • National No Tobacco Day Award: Dr. Jorge Alcocer, Secretary of Health, informed that the WHO will award President Lopez Obrador for his commitment to the health of Mexicans and prevention as the main axis with the World No Tobacco Day Award, presented by Dr. Malo Serrano, representative of the Pan American Health Organization and the WHO in Mexico. • Advances of the Health Plan for Wellbeing: Zoe Robledo, Director General of IMSS, commented

• Mayan Train: Regarding the Amparo not allowing the construction of section 5 of the Maya Train, the President informed that they will go to another instance and file appeals so that the Amparo does not proceed because it has no grounds. • Railroad projects: The President stated that the government is trying to re-establish the passenger train system in Mexico since it is part of the history of our country. He informed that with the Tren Maya and the Tren del Istmo, we are seeking to rehabilitate and build around 2,600 km of railroad tracks. He mentioned that the Toluca-CDMX, AIFA-Lecheria, Guadalajara-zona conurbada, the interurban train in Monterrey and the deviation in Xalapa, Veracruz are in the construction process. ENERGY • Pemex: After Vitol committed to repairing damages with Pemex after acts of corruption, Presi-

KEY POINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S dent Lopez Obrador informed that 15 days ago, the names of two people from Pemex International were made known “and another complaint was already filed again in the Attorney General’s Office.” He affirmed that no audit can be canceled. Likewise, he stated that before, there were frauds, and concessions were granted to exploit oil. He reminded that Emilio Lozoya, ex-director of Pemex, is in jail. He stated that out of 110 concessions, only 3 have production, and at the most, they are extracting 30,000 barrels. He reiterated that the price of gasoline will not increase. POLITICAL AGENDA • Audios Alejandro Moreno, President of the PRI: When asked by a reporter about the broadcasting of the audios where Alejandro Moreno, President of the PRI, is heard reproaching that Cinepolis granted few resources to the party and another one about the deaths of journalists, the President pointed out that it is best not to get involved in these cases, as there will be elections in 6 states. • Demonstrations: Regarding the workers’ protests at the Tula refinery in Hidalgo, the President assured that Pemex is open to dialogue and informed that the delivery of positions no longer corresponds to the union, which is why the leaders feel displaced. • Fraud in the purchase of land: In the face of possible fraud in the sale of land in Oaxaca, Lopez Obrador confirmed that they are already working on it. He said they are making an inventory of all the nation’s assets to protect them and reveal these invasions, promoted by the authorities themselves in most cases. He said that he is no longer allowing concessions to be granted for mining exploitation and that Lithium has already been protected.

• Political-Electoral Reform: The President stated that just as there was a debate for the Electricity Reform, there will be a debate for the Electoral Reform. He pointed out some signs on some houses in Las Lomas with the legend “in this house we protect INE.” He insisted that honest men and women must protect INE. He pointed out that he has information about a businessman who received millions of pesos, but INE does not denounce him. • Crisis at the Federal Court of Administrative Justice: A reporter affirmed that she had access to audios that prove the abuses occurring in the Tribunal, especially at the hands of the current President Rafael Anzures. She also indicated that such audios will be published this week. President Lopez Obrador indicated that the Secretary of the Interior is in charge of this matter, always respecting the autonomy of this body. He pointed out that an agreement may be reached but that no type of corruption will be tolerated. In this sense, he reminded that during his administration, he had accepted the figure of protected witnesses and collaborators as long as they provided information with evidence that benefits the public interest. • Romeo Deschamps case: President Lopez Obrador said that he will ask the Prosecutor to formally report the status of the case through the Ministry of the Interior. He has been receiving complaints about mistreatment of workers and lack of work supplies. He said he is interested in knowing if it is real or not so that PEMEX authorities resolve this claim. He pointed out that if there is no support, it could be a pressure mechanism of the union. He commented that he will be watching the investigation. • President’s Agenda: The President reported that on Friday, May 26, he was touring Chihuahua, Du-

KEY POINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S rango, and Sinaloa for the supervision of the Sembrando Vida program, as well as some roads and highways that are being built or repaired. He also announced that he will go to Playa Espiritu in Sinaloa, where land belonging to former Governor Antonio Toledo Corro is being raffled. He added that they did a business deal and wanted to sell it in its entirety to recover the money, but there was no buyer. • Ruben Rocha Moya: Governor Ruben Rocha Moya indicated that the President has great acceptance in Sinaloa and thanked the President for his leadership in benefiting those who have the least. He pointed out that corn threshing has begun, especially white corn, and there will be a yield of between 4.5 and 5 million tons of white corn. He mentioned that it has been included in the plan for self-consumption and to combat the shortage that has recently been put on the national level and that essentially “has called on us” to produce more food. He pointed out that 521 tons will be sold to SEGALMEX, remaining as reserves in Sinaloa’s warehouses. There is also an important production of beans, chickpeas, sorghum, mango, and vegetables. - He emphasized that the highlands people are very happy with Sembrando Vida, and the Construyendo el Futuro program progresses very well. However, there is a lack of entrepreneurs to receive the young people. - He mentioned that the labor conflict at the San Rafael Mine had been unblocked, and work had been done with the Ministry of Economy; $30 million dollars of investment was announced after months of the strike. Investors are being invited with the guarantee of investment protection. - On the subject of security, he emphasized that

there is good agreement with the SENEDA, SEMAR, G.N., and FGR. He ruled out impunity; the issue of journalists is also being dealt with in an accelerated manner.

ECONOMY • Economic highlights: The President informed that foreign direct investment in the first quarter amounted to 19.428 billion dollars, which represents a historical fact, even taking into account the Televisa-Univision merger and the restructuring of Aeromexico. Likewise, he mentioned that as of May 24, tax revenues reached 1,733.337 billion pesos, which represents an increase of 3.8% compared to the same period of the previous year. On the other hand, he pointed out that annual inflation in Mexico in March was 7.45%, while that of the United States was 8.5% and that of Spain was 9.82%. He said that the increase in inflation is the result of external factors and is a global situation. He highlighted that since the government took office, the peso has appreciated and has remained stable and informed that in the first four months of 2022, $17,152 million dollars have been received in remittances, which represents an increase of 17% compared to the same period of 2021. • Review of IMMEX and similar programs: A reporter mentioned that there are programs that favor, through tax exemptions such as VAT, companies that manufacture products in Mexico and export them for sale in another country. He accused that there are companies that abuse these programs by taking advantage of the exemptions and commercializing imported raw materials without any transformation process to meet domestic demand

KEY POINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S and without paying VAT. The reporter asked President Lopez Obrador to review the export promotion programs such as IMMEX so that the authorities can verify that the companies comply with the terms of such programs through visits to the companies’ plants and asked the reporter to speak with Raquel Buenrostro, head of SAT, in this regard. He said that changes have been made to simplify the payment of taxes to small companies, but there has not been a tax reform because a commitment was made not to increase taxes, and it is being fulfilled. • Banco del Bienestar: President Lopez Obrador indicated that Telecomm will become the Financiera del Bienestar and will be the only institution in charge of granting loans and recovering them so that, as a revolving fund, it will continue to support the people. He stressed that the regulations still have to be adjusted so that Telecomm can be granted these powers, commenting that the ideal would be to merge it with the Banco del Bienestar. He mentioned that the Banco del Bienestar is being consolidated for the dispersion of resources, which this year will distribute close to 500 billion pesos through close to 3,000 branches. It will be the bank with the most branches throughout the country and is expected to eventually disperse close to 700 billion pesos a year. • Profit-sharing period: Regarding the distribution of profits to Mexican workers, mainly in transnational companies, a reporter commented that recently the mining companies have settled with collective bargaining agreements and have obtained good profits; however, the workers have not received PTU payments. In the case of mining, he commented that in Cananea, they received an average of 600 thousand pesos in PTU. In Nacozari,

$300 thousand. He mentioned that the amount of the company’s profits are under analysis and that it has already been agreed that the SAT will intervene to define it. He commented that he recommended to the Secretary of the Interior, Adan Augusto Lopez, to dialogue with Senator Gomez Urrutia on the subject so that they can continue looking for a conciliation. He emphasized that Grupo Mexico’s business people have worked well, that there are no complaints about them and that only the issue of the Sonora River is pending.

KEY POINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S and that with the current strategy, he is making amends. He denied the need to rethink the security strategy. • Public Safety in Sinaloa: Luis Cresencio Sandoval Gonzalez, Secretary of SEDENA, highlighted that out of 144 sessions held on the subject, the governor of the state has been present in 89% of them, and in the rest, there has always been a representative. He highlighted that in terms of vehicle theft, intentional homicide, and kidnappings, there is a constant decrease. Sinaloa ranks 26th nationally in terms of impact crimes. The municipalities with the highest crime rates are Culiacan, Mazatlan, and Ahome. Regarding the theft of hydrocarbons, he informed that 175,143 liters of fuel that had been stolen have been recovered. Lopez Obrador discarded that he will change the security strategy because it is giving results. Part of the fight against insecurity is to give people options, such as scholarships and programs.

• Salaries of teachers and doctors: The federal President reminded that a salary adjustment was made for teachers so that no one earns less than $14,500 pesos on average, and the same will be sought for doctors. This year, the salary increases for state employees will be addressed. SECURITY • Security: The President defended that in comparison with other governments, his administration has reduced the number of intentional homicides and said that the strategy is progressing well because most crimes are going down. He added that he inherited high figures from past governments

ENVIRONMENT • Water Supply Crisis in Hermosillo: The President of the Republic pointed out that the issue is being addressed by the Governor, Alfonso Durazo. He commented that during his tour of Sonora, they visited the Cuchillo Dam, where the aqueduct was built, and the governor informed him of a complementary project that is being developed in order to pump water at a greater depth to solve the water shortage. He indicated that the governor will be supported with whatever is required. • Drought in Sinaloa: Rocha Moya informed that yesterday a disaster declaration was issued for the warm wave in six municipalities.

NEWS BY STATE

BAJA CALIFORNIA The Health Secretary of Baja California reports 315 active cases in the past 7 days. The vaccination plan for young people and the adult population continues. The use of face masks in open and closed spaces remains optional. The president of the National Chamber of the Transformation Industry (Canacintra) seeks to meet with CFE and the energy sector to know the official data of the protocol that CFE will implement to avoid power outages and if the energy allocated is sufficient due to the increase in demand for the economic reactivation.

SONORA Official reports confirm 47 new cases in the last 7 days. The use of face masks remains optional. The governor mentioned the remodeling of Guaymas port and the 6 customs points located in the north of the state. Municipal Civil Protection is carrying out drill programs in educational institutions. A company located in San Luis R. C. and the Center for the Inclusion of Regularizations, Consultancies, and Workshops signed an agreement to hire people with disabilities.

NEWS BY STATE

NUEVO LEON The Transformation Industry Chamber of Nuevo León carries out actions such as the installation of wells, increasing the consumption of treated water, technical support, and training to help reduce shortages. COAHUILA The Automotive Industry Cluster of Coahuila and the Autonomous University of the Northeast (UANE) signed an agreement with the purpose of creating a synergy with which functional projects can be carried out for both, with a high level of competitiveness.

TAMAULIPAS In Nuevo Laredo, the training of the second generation of the Municipal Industrial Training Program was carried out, in which the majority of the trainees were women. The objective of the program is to link citizens with the maquiladora sector.

NEWS BY STATE

SAN LUIS POTOSI Ricardo Gallardo Cardona, Governor of San Luis Potosi, held a meeting with the Ambassador of the Kingdom of Saudi Arabia in Mexico, Haytham Bin Hassan Bin Mohammed Al Malki, with whom he formalized economic and tourism development projects. In this sense, the state Governor took advantage of the visit to the Government Palace to show the diplomat the social, economic, and cultural conditions that favor the state as a place for sustained growth. Both authorities agreed on a dynamic of academic and labor exchange, generating interesting agreements so that students from Potosi can train and develop professional studies in that nation. Likewise, the possibility of bringing qualified labor to help meet the labor demand in Saudi Arabia, generating new job opportunities. Meanwhile, Gallardo Cardona emphasized that San Luis Potosi has strengths in infrastructure, geographic location, and the progress of a strong economy for the permanence and arrival of investments in the energy and solar energy sectors. He also emphasized that there is still room for companies from the Middle East to set up in Potosi, with easy incentives and a totally green agenda in favor of environmental protection.

JALISCO COVID-19 has been on an upward trend in Jalisco since it said goodbye to masks, and prevention measures have been relaxed. From May 23 to 29, the Jalisco Ministry of Health (SSJ) reported 1,248 new disease cases caused by the SARS-CoV-2 virus. This represents an increase of 27 percent over the previous week’s confirmed COVID-19 cases, which closed with 981. The notification of cases has been increasing since May 15, five days after the mandatory use of masks was lifted in the state. Last Saturday and Sunday, the SSJ reported more than 230 COVID-19 cases per day, a figure that had not been seen since April 10. Carlos Alonso, a researcher in Public Health, considered that this increase in COVID-19 infections is due to the relaxation of measures such as no longer forcing the use of masks in closed spaces, mainly in lounges, bars, nightclubs, and others. Another indicator that COVID-19 cases are on the rise is the increase in the number of tests performed, as well as the number of suspected cases.

NEWS BY STATE

GUANAJUATO Converting the city of Leon into the financial center of the Bajio, with the attraction of banking and financial services institutions, is one of the goals of the Secretary of Economic Development of the State as part of the sectorized development poles in Guanajuato. “Leon is the most important municipality in the state, and today it is already a neuralgic center for financial services; work is being done, and hopefully, corporate projects in the area of insurance and bonds will soon arrive, and there is a very important corporation that will be operating starting this year. Of course, in financial services, in information and communication technology, Leon also has a high potential”, explained Ramon Alfaro, Secretary of Economic Development of Guanajuato

QUERETARO According to The Financial Times, Queretaro is among the ten aerospace cities of the future. A sector made up of 85 companies and organizations, including 24 TR1, TR2, and TR3, four OEMs, as well as 12 research and design centers. This information was provided by the head of the Secretariat of Sustainable Development (SEDESU), Marco Antonio Del Prete Tercero, during the announcement of the activities for the 10th anniversary of the Aerocluster, an organization that, according to the official, represents an element of economic and human development for Queretaro. The Secretary pointed out that, at a national level, Queretaro has received 50% of the total Foreign Direct Investment in the aeronautical sector in the last ten years; likewise, it is the eighth most competitive entity in the sector worldwide. The head of the SEDESU announced that through the 60 companies that are part of the cluster, the state offers more than 355 products and services, such as: aerostructures, surface and thermal treatments, engine, landing gear, and braking system components; MRO of engines, aircraft and landing gear, machining of complex components, among others.

NEWS BY STATE

STATE OF MEXICO The Governor of the State of Mexico, Alfredo Del Mazo Maza, held a meeting with executives of the airline Volaris in which they announced the launch of new routes of this company both at the International Airport “Felipe Angeles” (AIFA), as well as at the Toluca International Airport (AIT). In a message broadcast through his official Twitter account, the Mexican Governor highlighted that during this meeting, they announced the restart of operations of this airline, with at least six destinations in the case of AIT. With these new routes, the governor emphasized, the Metropolitan Airport System is consolidated and strengthened; to this end, they also contemplate a series of works that expand connectivity.

CDMX The Ministry of Economic Development (Sedeco) informed that Mexico City consolidated its position as the state with the highest reception of Foreign Direct Investment (FDI) during the first quarter of 2022 by attracting 7,932.2 million dollars, followed by Jalisco and Nuevo Leon, according to figures from the Federal Ministry of Economy. The head of Sedeco, Fadlala Akabani Hneide, explained that Mexico City confirms the recovery of its economic dynamism, as it offers security and confidence to investors, resulting in the reception of 41 percent of FDI at a national level, just compared to the first quarter of 2021 FDI increased by 155.3 percent. The sectors that concentrated the most investment are the Mass Media Information sector with 4.70 billion dollars, Financial and Insurance Services with 1.338 billion dollars, and Manufacturing Industry with 921 million dollars.

ECONOMIC RECOVERY

ECONOMY AND INVESTMENTS IN MEXICO

CENTRAL MEXICO

NORTHWEST

WTECH WTech truck manufacturer arrives in Jalisco with 180 MDD and 4,500 jobs.

HONEYWELL Honeywell settles in Chihuahua with an investment of $400 million dollars.

SAVERGLASS Saverglass expands its operations in Jalisco and invests 130 million dollars. It will generate 400 new jobs.

NORTHEAST SIEMENS Siemens announces an investment of 683 million pesos in the “Mitras Project” in Nuevo Leon.

LABOR

PROFIT-SHARING IN MEXICO This week has ended the deadline for companies in Mexico to share the profits of the preceding fiscal year with their workers. Profit-sharing distribution in Mexico (PTU for its Spanish acronym) is one of the most important annual collective relations activities involving employers and workers’ representatives. This year the PTU payment was conducted under new rules and a confusing official narrative. The PTU in Mexico is a constitutional right; the labor law sets provisions detailing the statutory procedure and rules. As a result of the 2021 outsourcing reform, this will be the first time companies must comply with this obligation with new caps on distribution projects.

ALVARO GARCIA HR, Vice President

The labor law reform of April 2021 added a fraction to the LFT, indicating that the amount to be received for profits will have a maximum limit of three months of salary or, where appropriate, the average of the participation received in the last three years, whichever is more favorable for the worker. After paying profits to all active workers, it is now time for the companies to also distribute among those former employees who, based on the legislation, are eligible for the 2021 PTU payment.

ADVISORY

NEARSHORING YOUR SUPPLY CHAIN STRATEGY Some benefits of considering nearshoring your supply chain. 1. De-risking the supply strategy by having multiple suppliers in different regions. 2. Supply base in the same time zone 3. Reduced lead-times 4. Reduced Order Liability 5. Increasing supply flexibility The procurement side of things is a portion of each company’s S&OP (Sales & Operations Planning), a good rule of thumb is to review your plan and re-align towards the new normal.

KURT SCHMIDT Consulting Director