Special Report: Plant with troubled past at center of Takata air bag probe

November 20, 2014

11/20/14 Reuters 

REUTERS/Daniel Becerril/Files

REUTERS/Daniel Becerril/Files

The dusty, industrial town of Ciudad Frontera,Mexico, has moved from the far reaches of the global auto supply chain to the front lines of an investigation into why air bags from Takata Corp are blowing up with lethal force in accidents. The Takata plant there has been confirmed as the source of defective air bags made in 2001 and 2002 and again around 2012, according to recall records, automakers and regulators. In 2006, the factory blew up, driving home for workers and residents the volatility and risk of the explosive compound at the core of Takata’s air bags. Now, the U.S. National Highway Traffic Safety Administration (NHTSA) has ordered Tokyo-based Takata Corp (7312.T) to submit a wide array of records, including those pertaining to manufacturing controls at the Mexican plant, as part of an investigation into why its air bags have shot shrapnel at drivers in five fatal accidents from Oklahoma to Malaysia.

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BMW says its Takata inflator work moving from Mexico to Germany

November 20, 2014

11/19/14 Reuters

Washauto06_bmw_325_AudeVivereTakata plans to shift production of BMW air bag inflators from Mexico to Germany, the automaker said on Wednesday in a filing with U.S. safety regulators who have been probing questions about the quality of manufacturing at the plant. Automakers that use the Takata inflators, including Toyota Motor Corp, warned that it was not feasible to switch to other suppliers to meet demand for replacement parts. The Takata inflators are at risk of blowing up with too much force and spraying occupants with metal shrapnel. Germany’s BMW said in a filing posted online by U.S. safety regulators that it is supporting efforts by Takata to shift inflator production from its plant in Monclova, Mexico, to another Takata plant in Freiberg, Germany. The U.S. National Highway Traffic Safety Administration is investigating Takata inflators linked to at least five deaths.

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Mexico’s reforms built on shaky ground

November 17, 2014

11/15/14 The Miami Herald 

Bernardo Montoya/Reuters

Bernardo Montoya/Reuters

Visiting this country after several months, more than a month after the disappearance and likely murder of 43 students by drug gangs in cahoots with local authorities in the state of Guerrero, feels like arriving in a different country. Only a few months ago, President Enrique Peña Nieto was receiving an award for “statesman of the year” in New York, and his government’s bold energy and education reforms were being heralded by world media as the start of a “Mexican Moment” that would put this country on a fast track to the First World. But now, while Mexico’s economy continues to do much better than that of Venezuela, Argentina or Brazil, Mexicans have suddenly become enraged over the country’s endemic violence, and over a series of new scandals that are widely seen as signs of massive political corruption. Whoever you talk to, poor and rich, agree that the Sept. 26-27 killings in the town of Iguala — alongside new scandals involving possible government corruption in a murky $3.7 billion high-speed train construction bid awarded to a Chinese consortium, and the purchase of a $7 million mansion by first lady Angelica Rivero — have led to Peña Nieto’s worst political crisis since he took office two years ago.

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Saudis Reject Talk of OPEC Market Share War as Oil Slides

November 13, 2014

11/13/14 Bloomberg

Oil barrelsSaudi Arabia’s oil minister dismissed talk of a price war as having “no basis in reality” in his first public comments since crude plunged into a bear market last month. “Saudi oil policy has remained constant for the past few decades and it has not changed today,” Ali al-Naimi said at a conference in Acapulco, Mexico, yesterday. “We want stable oil markets and steady prices, because this is good for producers, consumers and investors.” Brent crude futures plunged below $80 yesterday for the first time since September 2010 on concern OPEC is in no hurry to halt a four-month slide in prices. Saudi discounts offered to Asian customers in October triggered speculation that the Organization of Petroleum Exporting Countries’ largest member had changed policy and was seeking to preserve market share, instead of supporting prices by curbing supply. OPEC ministers will meet Nov. 27 in Vienna.

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Mexico: Violent Protests Hit Acapulco’s Tourism

November 13, 2014

11/12/14 New York Times 

Mexicana PlaneMexico’s president has tried to keep the issue of violence issue separate from his focus on the economy, but the two are converging as violent protests over 43 disappeared students squelch tourism in Acapulco just before a major holiday weekend. As Mexico prepares to commemorate its 1910 revolution Monday, hotels in the Pacific resort city have seen a wave of cancellations after demonstrators temporarily shut down the airport, blocked highways and attacked government and political offices in the southern state of Guerrero. Acapulco hotel occupancy rates are currently at 20 percent, well short of the 85 percent expected for this long weekend when Mexicans typically flock to the beaches, Joaquin Badillo, president of the Employers’ Association for Guerrero state, said Wednesday. More cancellations have been registered for Christmas week, the busiest time of the year for Acapulco tourism, and Badillo said one company that operates 10 hotels has cut about 200 temporary jobs in recent weeks.

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Organised crime could undermine benefits of Mexico’s energy reform programme

November 12, 2014

11/12/14 Financial Times

energy - oil pumpsHow much of a risk are Mexican drug lords and the country’s volatile security situation for the landmark energy reform? The head of one company that has a services contract with Mexican state giant Pemex smiles ruefully. At its worst point – some three to four years ago – a full 40 per cent of the acreage the company is working on was a no-go area, and that was despite some of the processes being automated, says the executive, who asked not to be named. Things have improved somewhat, but it is all relative: the proportion of the area his company is working on that can only be visited with the army, in helicopters, has shrunk to 20 per cent. “Security will be a problem,” says the executive, highlighting the elephant in the room when it comes to the industry’s otherwise rapturous reception of Mexico’s energy reform.

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Opening of the Mexican energy market will attract newcomers

November 12, 2014

11/12/14 Financial Times

Energy -electricity_transmission_linesHalliburton, the US oilfield services group, reported a tough year in Latin America in its latest quarterly earnings call. Profit margins and activity levels were weaker than expected, largely as a result of operational issues in Mexico. But it is not all looking so downbeat. “We’re . . . excited about the pace of Mexico energy reform and expect to see strong opportunities in shale, mature fields, and deepwater markets in the coming years,” says Dave Lesar, chief executive.

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