VZCZCXYZ0000
RR RUEHWEB

DE RUEHBO #0421 0321559
ZNR UUUUU ZZH
R 011559Z FEB 08
FM AMEMBASSY BOGOTA
TO RUEHC/SECSTATE WASHDC 1191
INFO RUEHCV/AMEMBASSY CARACAS 9881
RUEHPE/AMEMBASSY LIMA 5867
RUEHZP/AMEMBASSY PANAMA 1156
RUEHQT/AMEMBASSY QUITO 6526

UNCLAS BOGOTA 000421 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EIND ETRD PREL ELAB ECON CO
SUBJECT: VENEZUELAN AUTO QUOTA COULD COST COLOMBIA 
THOUSANDS OF JOBS 
 
REF: BOGOTA 169 
 
¶1.  (SBU)  SUMMARY:  Local auto experts estimate Venezuela's 
new auto import quota may cost Colombia 5,000 jobs in the 
assembly sector.  Colombian parts manufacturers serve to 
benefit from the quota in anticipated increased sales to 
Venezuelan assemblers.  The GOC met with auto industry 
officials to discuss ways to help affected workers, including 
new training programs.  Other suggestions include Colombia 
reducing tariffs on imported auto parts or instituting its 
own vehicle import quota.  END SUMMARY. 
 
 
Cost Could Reach 5,000 Jobs 
--------------------------- 
 
¶2.  (U)  Venezuela's recently imposed vehicle import quota 
will hurt Colombian auto assemblers (reftel).  Colombian auto 
industry experts calculate that Colombian car makers will lay 
off 800 to 1,000 assembly line workers in addition to job 
losses in related fields.  Tulio Zuluaga, head of the 
Colombian Auto Manufacturing Association, estimated that the 
quota could ultimately lead to 5,000 lost jobs, and noted 
that the industry needed a new strategy to increase exports 
to other Latin American countries. 
 
Possible Boost for Parts Industry 
--------------------------------- 
 
¶3.  (SBU)  On the other hand, Nayib Neme, owner of the 
largest auto parts manufacturing company in Colombia, does 
not anticipate laying-off any of the 4,000 workers he 
employs.  Neme said that since the quota applies to all 
countries that export cars to Venezuela, the increased demand 
from Venezuelan car makers for auto parts will outweigh the 
reduced Colombian demand.  Neme, who already supplies parts 
to Venezuela, said he may soon need to hire more workers. 
Neme noted that smaller Colombian auto parts companies may 
have trouble operating in the Venezuelan market due to 
increased delays in receiving payment from Venezuelan 
importers; whereas they used to pay invoices in 30 days, 
delays now reach 90 days and may soon extend to 120 days. 
 
Colombia Considers Strategies to Reduce Quota's Impact 
--------------------------------------------- --------- 
 
¶4.  (U)  GOC and auto industry officials met to discuss ways 
to help affected auto workers.  President Uribe announced 
support for assistance to workers as well as efforts to 
expand export markets for the industry, stating that the 
choices were either "to cry (about the quotas) or work to 
move forward."  Although the GOC does not have a concrete 
plan in place yet, the Ministry of Social Protection, 
National Training Center and Bank of Opportunities are 
looking at programs to train laid-off workers in new areas. 
 
¶5.  (SBU)  Conservative Party Senator Omar Yepez suggested 
reducing tariffs on imported auto parts in order to stimulate 
demand for cars by reducing their cost.  However, Yepez's 
proposal would do little to stem the loss of jobs in the auto 
part manufacturing industry, and could even exacerbate it. 
Neme called the proposal "absurd" and counter-productive. 
Guillermo Ochoa, President of the autoworkers union, proposed 
raising tariffs rather than lowering them.  Ochoa said 
Colombia should institute its own vehicle import quota to 
boost demand for domestically produced cars and avoid more 
job cuts. 
Brownfield