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Key Mexican state for German automakers hits brakes on restart

imageEconomy8 hours ago (May 23, 2020 02:10AM ET)

(C) Reuters. FILE PHOTO: An employee leaves the Volkswagen (VW) plant as the company will temporarily close its factories in Mexico amid growing worries over the spread of the coronavirus disease (COVID-19), in Puebla

MEXICO CITY (Reuters) – The Mexican state of Puebla said on Friday that conditions “do not exist” yet to re-start activities in its automotive industry due to the coronavirus pandemic, putting the brakes on carmakers rebooting their operations there.

German automakers Volkswagen AG (DE:VOWG_p) and Audi (DE:NSUG) have major plants in the state southeast of Mexico City, but they have idled production due to the pandemic.

In an official decree issued on Friday night, the Puebla state government said its decision, which also applies to the local construction industry, would remain in place until sanitary and safety conditions permitted a restart.

“The worst is still to come, the wave of infections and the health risk is everywhere,” Puebla governor Miguel Barbosa said in the decree, after a week in which new coronavirus infections and death tallies hit record daily totals in Mexico.

Barbosa, an ally of President Andres Manuel Lopez Obrador, said he wanted to reopen the state’s economy “but not at the cost of the lives of the people of Puebla.”

Mexico’s government issued guidelines on Monday for restarting operations in carmaking, mining and construction even as the impact of the pandemic intensified.

Key Mexican state for German automakers hits brakes on restart

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