Challenges for Labor and Digitization in Automotive Companies located in Guanajuato, Mexico: the impact of the USMCA and the Covid-19

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Abstract:

Nowadays the automotive industry in Mexico has facing two important challenges: 1) the impact of the Covid-19 and the implementation of a new trade agreement known as USMCA (United States, Mexico, and Canada Agreement). Within the main changes of the USMCA are the new rules of origin that raise the regional value content requirement from 62.5 to 75%; and it also presents new rules and requirements on labor matters and rights. The effects of the pandemic caused by Covid-19 have been, a) economical: a decrease in production and employment, as well as an impact on the value chain caused by the semiconductor crisis; and b) technological, there is the assumption that the Covid-19 pandemic has accelerated digitization,

Given this, the questions that guide this contribution are: How have labor matters changed as the result of the implementation of the USMCA? What changes has the Covid-19 pandemic caused in terms of digitization? What strategies are the automotive companies located in Guanajuato establishing to face these changes? Therefore, the objective of this article is to analyze the impact of the USMCA on employment, as well as the digitization strategies adopted by companies located in the state of Guanajuato, in order to have a first approach in the study of this phenomenon.

To answer these questions quantitative research was carried out, in the first stage, a documentary review was carried out as well as the collection of statistical information. In the second part, a survey was designed and applied to automotive companies located in the so-called Guanajuato Inland Port Park.

This park is located in the municipality of Silao, Guanajuato, and it was conceived to promote an innovation ecosystem in the region. It comprises multinational firms (especially from the automotive industry), education and research institutes, specialized governmental agencies, etc.

The main findings are that the implementation of the digitization strategy requires a new labor profile as well as the formation of multidisciplinary teams; but this is not enough, in order to obtain better results (productivity, quality, labor environment, among others), it is necessary to introduce changes in aspects such as, training, incentives system, and evaluation system. Then one of the main challenges that the firms face is to create human development systems that permit them to capitalize the human talent.

This research form part of the project IN304122 “Methodological proposal to measure the Innovation and Absorptive Capabilities 4.0” funded by UNAM-PAPIIT Program (2022-2024).