VZCZCXRO3847
RR RUEHCD RUEHGD RUEHHO RUEHMC RUEHNG RUEHNL RUEHRD RUEHRS RUEHTM
DE RUEHME #3186/01 3132256
ZNR UUUUU ZZH
R 092256Z NOV 09
FM AMEMBASSY MEXICO
TO RUEHC/SECSTATE WASHDC 8943
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFISS/DEPT OF ENERGY WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHEHAAA/NSC WASHINGTON DC
INFO RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE

UNCLAS SECTION 01 OF 03 MEXICO 003186 
 
SIPDIS 
SENSITIVE 
 
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 - November 6 
 
¶1.  (U) The Mexico Economic Weekly supplements reporting from 
Mission Mexico 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: 
 
 
ECONOMY AND FINANCE: 
-------------------- 
 
CONGRESS APPROVES MOST 2010 REVENUE LEGISLATION - Mexico City 
 
 
TRADE AND INVESTMENT: 
--------------------- 
 
FOREIGN DIRECT INVESTMENT PLUNGES 66% - Monterrey 
 
STATE SEEKS PRIVATE INVESTMENT TO DRIVE SCHOOL CONSTRUCTION - 
Monterrey 
 
TIJUANA ATTRACTS NEW INVESTMENT IN THIRD QUARTER - Tijuana 
 
CHIHUAHUA'S MINING SECTOR ATTRACTS CHINESE INVESTMENT - Ciudad 
Juarez 
 
HERMOSILLO FORD PLANT RECOVERED FROM AUTO CRISIS- Hermosillo 
 
 
TRANSPORTATION AND INFRASTRUCTURE: 
---------------------------------- 
 
UPDATED BORDER CONTINGENCY PLANS SIGNED BETWEEN SISTER CITIES 
- Matamoros 
 
AIRPORT OPERATOR CALLS FOR RELIEF ON TICKET PRICES - Monterrey 
 
INFRASTRUCTURE DEVELOPMENT TOPS NUEVO LEON'S BUDGET PROPOSAL - 
Monterrey 
 
 
SCIENCE TECHNOLOGY AND HEALTH: 
------------------------------ 
 
SEASONAL FLU RETURNS TO MEXICO - Mexico City 
 
 
------------------- 
ECONOMY AND FINANCE 
------------------- 
 
¶3.  (U) CONGRESS APPROVES MOST 2010 REVENUE LEGISLATION: 
Legislators watered down the original GOM revenue and tax 
proposals (see reftel), eliminating some of the key elements 
of the original package, but maintaining an increase in value 
added taxes and income tax rates.  Finance Minister Carstens 
said the package will help revive the economy.  While 
President Calderon welcomed approval of the legislation, he 
emphasized that that declining oil production left the country 
with no fiscal leeway, and called for all political actors to 
work together to boost growth and employment.  It is unclear 
whether what was approved will avoid a significant increase in 
the medium-term fiscal deficit, and a public debt downgrade 
from the main ratings agencies.  With the economy expected to 
contract by about 7% during 2009 (its worst performance since 
the early 1930s), momentum for a downgrade may be unstoppable. 
(Mexico City) 
 
-------------------- 
TRADE AND INVESTMENT 
--------------------- 
 
¶4.  (U) FOREIGN DIRECT INVESTMENT PLUNGES 66%:  Nuevo Leon's 
Secretary for Economic Development Othon Ruiz Montemayor 
stated on November 3rd that he expects 2009 will end with the 
lowest amount of foreign direct investment in the state in 
many years.  Ruiz estimates that the state of Nuevo Leon will 
finish the year with about US$500 million in foreign 
investment, a 66% decrease from 2008.  (Monterrey) 
 
MEXICO 00003186  002 OF 003 
 
 
 
¶5.  (U) STATE SEEKS PRIVATE INVESTMENT TO DRIVE SCHOOL 
CONSTRUCTION:  Nuevo Leon's Education Secretary Jose Antonio 
Gonzalez plans to use private capital to build 33 new schools 
and renovate or expand 50 others during the current school 
year.  The projects are located in the state's 13 fastest- 
growing areas.  Of the predicted construction cost of about 
US$41 million dollars, Gonzalez expects that US$30 million 
will come from investment by private contractors, although the 
exact financing mechanism has yet to be determined. 
(Monterrey) 
 
¶6.  (U) TIJUANA ATTRACTS NEW INVESTMENT IN THIRD QUARTER: 
Despite the continued gloomy global economic outlook, Tijuana 
continues to attract foreign investment.  Sixteen new 
companies set up shop in the Tijuana area between July and 
September 2009.  Half of the companies are American, one from 
Korea, one from New Zealand, and the rest from Europe.  The 
companies are in traditional industries for Tijuana: 
manufacturing medical equipment, telecommunications, and 
electronics.  However, FDI for 2009 is still lower than 2008. 
(Tijuana) 
 
¶7.  (U) CHIHUAHUA'S MINING SECTOR ATTRACTS CHINESE INVESTMENT: 
Mainland China's Jinchuan Group, a mining company, plans to 
invest USD 500 million in Chihuahua to produce copper, zinc, 
and silver, according to the Director of Mining for 
Chihuahua's Industrial Development Secretariat, Ignacio Vega 
Vaca.  In 2008, Jinchuan Group purchased mining concession 
rights from Canada's Tyler Resources to extract resources from 
the Bahuerachi mining project in southwestern Chihuahua. 
Mining analysts purport the Bahuerachi mine includes Mexico's 
largest undeveloped copper and zinc deposits.  The Jinchuan 
Group reportedly spent $25 million dollars on exploration of 
the Bahuerachi project to determine the feasibility of mining 
production.  Vega Vaca announced the Jinchuan Group expects to 
move forward with its investment plans by mid-2010.  Chihuahua 
is Mexico's leading producer of zinc and the second largest 
producer of gold and silver.  (Ciudad Juarez) 
 
¶8.  (U) HERMOSILLO FORD PLANT RECOVERED FROM AUTO CRISIS:  The 
Ford Stamping and Assembly Plant in Hermosillo returned to 
full capacity in recent months, supplying over 1,000 vehicles 
to the U.S. market daily.  In January 2008, the plant closed 
for one month due to high inventories in the U.S. and laid off 
around 200 employees.  The downturn was short-lived and plant 
managers have rehired employees at previous levels.  On 
October 30, Consul General Breidenstine and staff from 
Hermosillo toured the Ford plant and spoke at length with 
management about operations.  At the most efficient plant in 
its car class, 2,500 workers assemble the Ford Fusion, Mercury 
Milan, and Lincoln MKZ in three shifts around the clock.  The 
three vehicles are mid-sized sedans made from the same 
platform, but vary in engine styles and accessories.  The 
parts are incorporated from the 18 integrated suppliers co- 
located within the 35 acre manufacturing park.  In 2008, Ford 
invested USD $600 million to enable manufacturing of the 
Fusion hybrid vehicle that now constitutes five percent of 
sales.  Ford expects to roll out significant changes to the 
Fusion in 2013 and plant managers anticipate assembly line 
investment again in 2011-2012.  The Ford Fusion is 
experiencing record sales in the U.S., up 23 percent from 
¶2008.  The Hermosillo plant has been in operation since 1986. 
(Hermosillo) 
 
--------------------------------- 
TRANSPORTATION AND INFRASTRUCTURE 
--------------------------------- 
 
¶9.  (U) UPDATED BORDER CONTINGENCY PLANS SIGNED BETWEEN SISTER 
CITIES:  An updated Sister Cities Contingency Plan has been 
signed by nine border cities, the Mexican cities of Reynosa 
and Rio Bravo and the Texas cities of McAllen, Mission, 
Hidalgo, Edinburg, Pharr, Weslaco and Donna.  This contingency 
plan provides a mechanism for cooperation, preparedness, and 
response to civil emergencies between sister cities.  The 
update to the plan was funded via a 2007 EPA Border 2012 
grant.  Brownsville and Matamoros will seek to update their 
joint contingency plans in 2010.  According to Cameron County 
sources, the jurisdictions hope to host a "mega" exercise in 
2010 to include all the cities.  (Matamoros) 
 
 
MEXICO 00003186  003 OF 003 
 
 
¶10.  (U) AIRPORT OPERATOR CALLS FOR RELIEF ON TICKET PRICES: 
Salvador Alva Gomez, an independent director of the board of 
Grupo Aeroportuario del Centro Norte (OMA) and the former 
President of PepsiCo Latin America, blamed the reduction in 
passenger volume at OMA's airports on high ticket prices.  OMA 
operates and manages thirteen airports in nine states in 
central and northern Mexico, including the Monterrey 
International Airport, where the organization is 
headquartered.  During September, the number of total 
passengers using OMA's airports was 16.8% lower than 
September, 2008.  Alva notes that high ticket prices have been 
a barrier to leisure travel and have discouraged first-time 
passengers from flying.  He also pointed out that low-cost 
carrier Aviacsa's suspension of operations on July 6 and the 
dissolution two other airlines, Alma and Aladia, have reduced 
passenger levels at OMA's facilities.  (Monterrey) 
 
¶11.  (U) INFRASTRUCTURE DEVELOPMENT TOPS NUEVO LEON'S BUDGET 
PROPOSAL:  Nuevo Leon's new governor, Rodrigo Medina, 
announced on October 30 that in his first annual budget 
request he plans to seek over US$520 million dollars for state 
transportation projects.  Within the transportation request, 
US$75 million dollars would go to the logistics and a 
multimodal transportation project known as Interpuerto, a 
US$2.5 billion dollar facility to be located on 1,200 hectares 
near Monterrey.  Medina admitted that his budget would 
increase the deficit, but argued that a focus on 
infrastructure projects will create jobs and provide long-term 
economic development opportunities for small and mid-sized 
businesses.  (Monterrey) 
 
----------------------------- 
SCIENCE TECHNOLOGY AND HEALTH 
----------------------------- 
 
¶12.  (U) SEASONAL FLU RETURNS TO MEXICO:  A significant number 
of patients reporting flu-like symptoms in Mexico are now 
testing positive for the seasonal flu rather than H1N1 
influenza, according to experts at Mexico's National Institute 
for Medical Science and Nutrition, while H1N1 cases may be 
showing signs of decline in the general population.  Mexico 
does not yet have the H1N1 vaccine, but hopes to receive its 
first delivery from French vaccine maker Sanofi-Aventis by the 
end of 2009.  Meanwhile, the Federal Commission for Protection 
from Sanitary Risks (COFEPRIS) has extended the dates of 
expiration on Tamiflu and Relenza, two common antiviral 
H1N1treatments, from three years to five years, which will 
increase the supply of the medicines available to gravely ill 
patients.  (Mexico City) 
 
PASCUAL