Whoops-a-daisy! The U.S. government made a “mistake” buying troubled assets from banks, said Carlos Slim Helu, the world’s second richest man, at a conference on stock markets in Mexico City, as reported by Bloomberg. Slim said that the assets are hard to manage.
He added that the recent global financial crisis began in the U.S., where “there was bad regulation and worse supervision” of derivatives instruments.
As we previously reported, in lieu of a government-sponsored automotive industry bailout, Slim has suggested that struggling U.S. automakers file for Chapter 11 bankruptcy protection and renegotiate uncompetitive labor union contracts in exchange for giving workers company shares.
If Slim is correct regarding U.S. government purchases of troubled bank assets and the auto industry bailout, which congress appears poised to enact tomorrow, the U.S. government may have racked up two whoops-a-daisies for taxpayers in the early stages of the financial crisis, a high score considering that each whoops-a-daisy is worth a few billion dollars.
Mexican billionaire Carlos Slim offered his views to reporters regarding U.S. auto industry, health care, and other issues in an interview in San Antonio on November 18, 2008, summarized a Houston Chronicle report.
With respect to the auto industry, Slim suggested that struggling companies should file for Chapter 11 bankruptcy protection and renegotiate uncompetitive labor union contracts in exchange for giving workers company shares. This is a suggestion lawmakers on Capitol Hill may wish to bear in mind today as they listen to pleas from auto industry executives for a US$25 billion slice of the US$700 billion Troubled Asset Relief Program (TARP).
The plant, which will initially have a capacity of 50,000 vehicles per year, will be constructed in collaboration with an undisclosed Mexican joint venture partner. Production is expected to commence by the end of 2009 or beginning of 2010.
Chrysler Mexico announced that it would lay-off 300 workers from its Derramadero, Coahuila plant because of decreasing demand for pick-up trucks in the United States, according to a report in today’s El Financiero.
The report said that Chrysler Mexico would continue its plan to invest US$570 million in its Saltillo facilities, where production is expected to commence in 2009, generating 485 new jobs.
Japanese truck maker Hino Motors, Ltd. announced today it would form a joint venture with Japanese trading company Mitsui & Co. to build a new truck manufacturing facility in Guanajuato, Mexico. Production is anticipated to begin in July 2009 with annual capacity of 1,200 units.
Affinia Group, Inc., a Michigan-based company, announced plans today to establish a 200,000 square-foot brake production and distribution facility in Juarez, Mexico, according to a PRNewswire report. The facility will be located in the in the America Industries-Kimco Juarez Industrial Park.
Affinia manufactures automotive filtration systems, braking systems, and chassis components. The company cited high U.S. production costs as the reason for the transfer of production to Mexico.
Cooper Tire & Rubber announced plans to invest in a $31 million tire production facility in Guadalaja, Mexico, as part of a cost reduction plan, according to a June 18, 2008 company press release. The plant will be jointly owned by Cooper IBSA (a Cooper holding company organized under Mexican law) and Cooperativa TRADOC, S. de R.L. de C.V. (a Mexican company owned by the employee-owners of the plant). Cooper IBSA will own 38% of the plant following its investment.
In October 2007, Cooper Tire also entered into a 50-50 joint venture with Mexican company Nernet International, S.A. de C.V., which markets, sells, and distributes the Cooper and Pneustone brands in Mexico.
Lionel Richie said "fiesta forever", and Ford Motor Company agrees. Ford announced on May 30, 2008 that it would commence production of its Fiesta small car at the company’s Cuautitlán Assembly Plant near Mexico City beginning in early 2010. The Cuautitlán Assembly Plant, which currently builds large trucks (ranging from the Ford F-150 to the F-550), will be transformed to accommodate small-car production as part of Ford’s manufacturing shift to smaller, fuel efficient vehicles. In addition to the Cuautitlán Plant, Ford has stamping and assembly plants in Hermosillo, Sonora that manufacture the Ford Fusion, Mercury Milan and Lincoln MKZ sedans, which are sold in North America, Venezuela and Brazil.
Expensive oil may continue to cause multinationals to modify supply chains, perhaps with additional positive externalities for Mexico.