R 232349Z JAN 09
FM AMEMBASSY MEXICO
TO SECSTATE WASHDC 4736
DEPT OF COMMERCE WASHINGTON DC
DEPT OF ENERGY WASHINGTON DC
DEPT OF TREASURY WASHINGTON DC
NSC WASHINGTON DC
INFO ALL US CONSULATES IN MEXICO COLLECTIVE

UNCLAS MEXICO 000195 
 
 
STATE FOR WHA/MEX, WHA/EPSC 
STATE FOR EEB 
USDOC FOR 4320/ITA/MAC/WH/ONAFTA/GWORD 
TREASURY FOR IA 
ENERGY FOR WARD, LOCKWOOD AND DAVIS 
 
 
E.O. 12958: N/A 
TAGS: ECON EFIN ETRD ENRG ELTN EAIR PGOV SENV MX
SUBJECT: Mexico Economic Weekly - January 23 
 
¶1.  (U) The Mexico Economic Weekly supplements individual reporting 
from the Consulates and the Embassy Mexico Economic Section to 
provide a sense of ongoing trends.  Please contact Adam Shub 
(shubam@state.gov) or Sigrid Emrich (emrichs@state.gov) for 
questions or comments about this report. 
 
¶2. (U) Table of Contents: 
 
TRADE AND INVESTMENT: 
--------------------- 
 
HONDA CONTINUES UNINTERRUPTED PRODUCTION - Guadalajara 
 
"TIME" FOR A CHANGE IN NAYARIT? - Guadalajara 
 
ATM THEFTS THREATEN MAQUILADORAS ANEW - Matamoros 
 
ENERGY: 
------- 
 
OIL PRODUCTION FALLS TO 13 YEAR LOW - Mexico City 
 
CEMEX SHIFTING TO RENEWABLE ENERGY SOURCES - Monterrey 
 
CROSS-BORDER ENERGY SHARING CATCHING ON SLOWLY - Matamoros 
 
 
TRADE AND INVESTMENT: 
--------------------- 
 
¶3.  (U) HONDA CONTINUES UNINTERRUPTED PRODUCTION:  A senior 
executive of Honda-Mexico, which operates a motorcycle and vehicle 
production plant in the Guadalajara suburb of El Salto, told the CG 
that Honda has no current plans for a temporary suspension of 
operations.  This is in contrast to competitors Nissan, Volkswagen, 
General Motors, and Ford, all of whom have recently closed their 
Mexican plants for varying periods of time.  In addition to domestic 
sales, Honda exports vehicles made in the El Salto plant to the U.S. 
and various South American countries.  (Guadalajara) 
 
¶4.  (U) "TIME" FOR A CHANGE IN NAYARIT?  A Federal Deputy has 
introduced a bill to switch the Pacific coast state of Nayarit from 
the Mountain to the Central time zone as a means of facilitating 
trade, commerce, and tourism.  Neighboring Jalisco state observes 
Central time, and this causes confusion especially in the greater 
Puerto Vallarta area, where the state and time zone border divides 
the tourist zone.  The change might also lead to improved 
coordination between the municipalities of Puerto Vallarta, Jalisco 
and Bahia de Banderas, Nayarit on common development and 
infrastructure issues. (Guadalajara) 
 
¶5.  (U) ATM THEFTS THREATEN MAQUILADORAS ANEW:  In August, a string 
of thefts of ATMs placed in maquiladoras threatened industry in 
Reynosa, Tamaulipas. The Tamaulipas Special Police (PET) were 
stationed in Reynosa's industrial parks to protect the plants from 
these and other thefts and reports of significant thefts stopped 
almost immediately. New incidents have again spread fear among plant 
managers and many are considering removing ATMs from their 
facilities despite the service and convenience they offer to 
employees. Approximately two weeks ago, "armed commandos," according 
to the manager of a neighboring plant, allegedly entered a General 
Motors facility in Reynosa and held employees at gunpoint, forcing 
them to make withdrawals from their accounts one-by-one before 
making off with the cash. Similarly, rumors in the Reynosa and 
Matamoros maquiladora communities that the kidnapping of the manager 
of Lear Jet in Ciudad Juarez last week was tied to a similar ATM 
theft have increased concerns of kidnappings, as well. In a meeting 
with the Reynosa Maquiladora Association (RAMMAC) on January 19, 
Tamaulipas Secretary of Public Security, Jose Ives Soberon, promised 
to increase PET forces in Reynosa's industrial parks if managers' 
concerns continue to rise. Additionally, maquiladora managers 
continue to strongly consider the value of maintaining ATMs in their 
plants as a service to their employees in light of the incidents. 
(Matamoros; Reftel 08 Matamoros 294) 
 
ENERGY: 
------- 
 
¶6.  (U) OIL PRODUCTION FALLS TO 13 YEAR LOW:  Mexican oil production 
fell to an average of 2.8 million barrels a day in 2008, its lowest 
level since 1995.  Pemex estimates that oil production will begin to 
increase again by 2011 reaching 3 million barrels a day by 2015. 
Industry experts discount this forecast as overly optimistic given 
the decline of the Cantarell field, the challenges PEMEX faces in 
Chicontepec and Ku Maloop Zap and the lack of investment in 
exploration in the deep waters of the Gulf of Mexico.  Oil exports 
are Mexico's largest source of foreign exchange and oil revenues 
account for almost 40% of the federal budget.  Declining oil 
production coupled by low energy prices will create fiscal problems 
for Mexico unless the government takes action soon.  (Mexico City) 
 
¶7.  (U)  CEMEX SHIFTING TO RENEWABLE ENERGY SOURCES:  On January 22, 
the Monterrey-based multinational Cemex announced the opening of a 
new wind farm in La Ventosa, Oaxaca.  The wind farm administered by 
a Spanish company, Iberdrola, will supply energy to Cemex plants 
located in various parts of the country.  The US$ 100 million 
project is able to generate 80 megawatts of energy and, according to 
press reports, will also supply energy to other companies such as 
Barcel, Bimbo, Cerveceria Cuauhtemoc-Moctezuma, Conductores 
Monterrey, and Kimberly Clark.  Cement production is an energy 
intensive industry and Cemex considers the use of renewable energy 
an important part of its growth strategy.  The company plans to 
invest an additional US$ 420 million over the next two years to 
increase the wind farm's capacity.  (Monterrey) 
 
¶8.  (U) CROSS-BORDER ENERGY SHARING CATCHING ON SLOWLY:  In late 
2007, Sharyland Utilities in McAllen, Texas, announced an agreement 
with CFE to allow cross-border commercial energy sharing - one of 
only two such agreements allowing commercial energy trade along the 
Texas border. Despite claims of up to 15 percent energy cost savings 
annually due to "peak" hour differences between the US and Mexico 
(US "peak" rates occur between 5:00pm and 7:00pm, with Mexico's 
"peak" hours falling between 6:00pm and 10:00pm), only six companies 
in Reynosa have taken advantage of the "natural arbitrage" situation 
and obtained the required permits, according to Michael Landgraf of 
energy consultancy Crosspoint Global which helps market Sharyland's 
services in Reynosa. According to Landgraf, a 600,000 square foot 
plant in Reynosa saved more than 300,000 USD in 2008 (a 12.6 percent 
annual saving) due to the agreement. Despite continued complaints 
from the maquiladora sector about rising energy costs - up roughly 
30 to 40 percent in 2008, according to Reynosa Maquiladora 
Association (RAMMAC) members - the international energy sharing 
opportunity remains virtually untouched. Industry leaders report 
that the potential savings for many companies are not significant 
enough to overcome the perceived hassle and upfront costs of 
obtaining the required permits, especially those required from CFE. 
(Matamoros) 
 
 
ENVIRONMENT: 
------------ 
 
MEXICO AS A LEADER ON CLIMATE CHANGE:  The Center of Dialogue and 
Analysis on North America (CEDAN) workshop on Regional Climate 
Governance January 19- 20 focused on future paths of collaboration, 
including a possible  a carbon emissions trading regime for North 
America.  Dr. Fernando Tudela, Undersecretary of Planning and 
Environmental Policy of the Secretariat of Environment and Natural 
Resources (SEMARNAT) pointed out that Mexico has been the most 
proactive developing country on climate change.  At the UNFCC-COP 14 
in Poznan, Mexico announced its goal of reducing green house gas 
emissions fifty percent from 2000 to 2050 - if there are financial 
and cooperation mechanisms to facilitate this goal. Tudela said that 
Mexico's per capita emissions are one fifth of the U.S. and Canada 
and that a cap and trade system could be feasible in the North 
American region if regional U.S. initiatives and President Obama's 
proposal is implemented.  Tudela commented that the European Union 
has the most developed experiment on cap and trade and it would be 
very useful to use its lessons learned.  The trilateral Commission 
for Environmental Cooperation (CEC) could be the organization to 
help the three countries coordinate positions. (Mexico City) 
 
 
Bassett