Legislative Context

Several labor reforms are currently being discussed in Mexico that could significantly impact the automotive industry:

• Reduction of the work week from 48 to 40 hours, which is very likely to be published in May of this year and is expected to be implemented gradually from 2027 to 2030.
• Increase in the minimum mandatory Christmas bonus from 15 to 30 days.
• Increase in the vacation bonus from 25% to 50%.

Impact on Labor Costs

The increase in bonuses and vacation pay would represent a considerable increase in the annual cost per worker. 

In plants with thousands of employees, this could put pressure on operating margins if it is not accompanied by improvements in productivity.

Operational Impact

The reduction in working hours will require a redesign of shifts, possible additional hiring or an increase in overtime, and even a new industry strategy in terms of productivity increases. 

This is particularly relevant in 24/7 operations and just-in-time schemes.

International Competitiveness

The Mexican automotive sector competes with plants in North America, Asia, and South America. 

An increase in labor costs could impact future investment decisions if not offset by operational efficiency.

Strategic Recommendations

• Financial projection of scenarios with higher labor costs.
• Investment in automation and digitization.
• Shift redesign and operational optimization.
• Active participation in dialogue with authorities and unions.

Conclusion

The proposed labor reforms represent a significant structural change for the automotive industry. 

Strategic anticipation and improved productivity will be key to maintaining competitiveness and financial stability. At JA del Rio, we can advise you on how to face the challenges of these significant changes.

J.A. DEL RÍO offers a wide array of specialized consulting services to assist you with these and other matters, in order to ensure that your project complies with the applicable characteristics  contained in this agreement.

If you have any questions, J.A. DEL RÍO can provide you with our experts to advise in matters concerning compliance with your legal and tax obligations. Once again, please let us know if we may be of any further assistance to you at: contacto@jadelrio.com.