Luis Lara, Chairman of the Board and CEO for American Industries, on his consolidation strategy and plans until NAFTA.
Q: American Industries is present across Mexico. In which regions do you expect the most growth?
A: El Bajio is growing at an accelerated pace thanks to the investments made by the automotive industry five to six years ago. This trend is expected to continue regardless of what happens with NAFTA and any taxes that might be imposed as a result of the treaty’s renegotiation. The aerospace industry was enjoying rapid growth in Mexico but the uncertain environment generated by the US president has slowed the sector. Companies already operating here are in a wait-and-see mode regarding new investments as NAFTA and other agreements are renegotiated. In the meantime, they will continue operating normally.
Q: What role will shelters play in Mexico’s economic development?
A: Shelters are facilitators. We promote companies to successfully do business in Mexico by solving any problem they might face on local soil. The main challenges manufacturing companies now face is a lack of qualified employees. The manufacturing sector in Chihuahua, for instance, has grown and evolved. The state’s manufacturing capacities are excellent but the industry has slowed due to issues with the US. If this situation had not arisen local companies would have run short of qualified personnel. This is an issue that Chihuahua must address. To help solve this problem, we are replicating a Chinese model wherein workers from states with high unemployment are relocated to regions where personnel are in demand. We have implemented a pilot project in Ciudad Juarez, relocating trained workers from southern states such as Veracruz, Hidalgo and Chiapas. Given this program, I can guarantee that all companies within American Industries’ shelter will have a sufficient number of workers. Chihuahua is in constant need of nonskilled professionals and once they are brought in and trained, the employees can choose to stay or move on because they will have the skills that are in demand. This model is beneficial for Mexico’s overall economy because we are moving potential employees from areas of high unemployment to locations that need them.
Q: What are the main areas that must be addressed to continue developing Chihuahua’s manufacturing sector?
A: Similar to the treaties concerning air travel between Mexico and the US and Canada, it is necessary to generate treaties for aerospace manufacturing. The aerospace industry must be considered a special niche in NAFTA due to the impact of this treaty on the local industry. At this point, the climate of uncertainty between Mexico and the US is impacting business growth and investment in Mexico. Companies already operating in Mexico have encountered little to no trouble since the US election and most seem confident that problems will be solved for the best. However, industry promotors such as American Industries are concerned because President Trump’s comments have led to a reduction in potential investments. His comments have generated negative consequences for Mexico’s economy, investment and manufacturing.
Q: What initiatives is American Industries promoting to ensure growth for both Chihuahua and the rest of Mexico?
A: We are also working to improve connectivity to and from Chihuahua. Aeroméxico is reducing its flights to many cities because the airline is trying to focus on long-haul routes. However, the airline removed the Chihuahua service without prior notice, heavily impacting flyers who depended on these routes. Luckily, the aviation market is no longer a monopoly, so newer airlines are able to take these flights. Due to the current situation with the US, many of our projects are on hold and we will use the time to restructure. We are reorganizing the company to increase efficiencies in the regions we operate. We are investing in human capital by providing our employees with management training and acquiring the necessary investment to finance more parks and industrial developments.