EL PASO, Texas -- The coronavirus, although not physically present along the U.S.-Mexico border, is starting to affect the intricate chain that manufacturing supplies follow from China to North America according to stakeholders at the Sister Cities Summit in El Paso on Thursday.
“It’s starting to show an effect on “Right on Time” deliveries, which seems to have caused a couple of manufacturing plants to shut down some shifts in Juarez,” said Armando Cabada, mayor of Ciudad Juarez.
“It definitely is going to interrupt the supply chain because so much of our supply for the manufacturing sector in Juarez comes from China. Those (Chinese) factories are slowing down, a lot of factories have closed,” said Alan Russell, CEO of the TECMA group, a manufacturing organization that works on both sides of the border. He explained some factories have as many as 20,000 employees.
“The supply chain is secondary to the spread of the virus and to public health,” Russell said.
As companies in 2020 maintain the slimmest inventory possible, relying on “Right on Time” shipping the effect of the virus would normally have hit harder, but Russell explained manufacturers have been able to dampen this.
“The virus occurred right at the end of the Chinese New Year, so the factories were closed anyway. Everybody had prepared and had extra inventory anticipating the New Year celebrations but then the factories did not come back up to full production,” he said.
“There’s product on the water, there’s product being loaded, but there’s going to be a gap and it could be two weeks, three weeks, four weeks from now when we start feeling the real crunch of supply chain problems.”
The Mexican government is preparing on the local and national level.
“It’s not so serious as of yet and we don’t have the virus in Juarez, but we’re working with the (Mexican) federal government on how to handle the situation if someone were to be infected here,” Cabada said.
Consumers may be affected weeks or months down the line, even after the health crisis is over.
“No cause for alarm yet, but if this continues on the current pace it could certainly cause some store shelves to be vacated for product that’s directly coming from China,” Russell said.