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Is Mexican Drug War Putting Auto Industry at Risk?

Will drug cartels target the auto industry next?

by on Jul.25, 2011

The worsening drug war in Mexico could threaten that nation's booming auto industry.

Nearly one-fifth of North American car and truck production originated in Mexico during the first half of 2011, according to industry production statistics — more than from our neighbor to the North, Canada.

And lest the UAW and its supporters get their drawers twisted, this South-of-the-Border vehicle assembly is not just by Detroit-based manufacturers fleeing U.S. labor costs. High-volume European and Asian manufacturers also depend heavily on Mexican production, though in some cases it is a base for distribution throughout the hemisphere.  Besides cost, high quality work by well-trained and motivated Mexican employees is another driver. For example, Ford’s Hermosillo plant produces the Ford Fusion and Lincoln MKZ, both lauded by independent studies for their high quality.

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Therefore, dangerous instability in Mexico poses a threat to the retail market in the U.S. and, indeed, Canada. And this has nothing to do with the paranoia in some quarters about illegal immigrants from Latin America. Indeed, if anything, Mexican production of cars, trucks and parts for the U.S. is the best safety valve we have for immigration problems. The more good jobs there are in Mexico, the fewer Mexicans will want to cross our border illegally to provide for their families.

What are these threats? In short, drug smuggling-related, anti-government violent crimes that are reaching a point just short of outright insurrection.

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