Mexico Auto Sector Urges Phased 40-Hour Week Reform

Mexico’s automotive industry is calling for a flexible and phased approach to the proposed 40-hour workweek reform, citing operational, economic, and geopolitical implications. The initiative, currently under debate in Mexico’s Congress, seeks to reduce the legal workweek from 48 to 40 hours and has triggered a series of national forums with participation from both public and private stakeholders.

“It is crucial to consider the operating model of our industry—three shifts, seven days a week, 365 days a year. This setup enables us to produce 14,000 vehicles daily across 20 assembly plants, eight engine plants, and seven transmission facilities,” said Rogelio Garza, President, Mexican Automotive Industry Association (AMIA), during the third national forum on the reform held in Jalisco. He stressed that the unique structure of the automotive sector must be factored into any legislative changes.

Garza emphasized the industry's economic importance, noting that it generates 1 million direct and 3.5 million indirect jobs, contributes 4.5% to Mexico’s GDP, and represents 21.7% of the manufacturing GDP. It also accounts for 35% of Mexico’s manufacturing exports and influences 60% of the national economy through its supply chain. “We are one of the main pillars of the Mexican economy,” he said.

To mitigate disruption, the AMIA has proposed the following modifications:

• Implementing the reduction in work hours rather than workdays

• Allowing full tax deductions for employer-paid social benefits

• Exempting managerial and trusted employees from the new regulation

• Revising and updating rules on overtime compensation

Garza also pointed to the importance of timing. “Before advancing with labor reform, we believe the government should first resolve pending issues related to tariffs and the review of the USMCA agreement. Understanding the final terms among the three countries is essential to accurately assess the impact on our operations,” he said.

While the industry is not opposing the reform outright, it is requesting a differentiated rollout that accounts for the specific realities of each region and sector. “Any change must be gradual and adaptable to the production dynamics of each industry,” Garza concluded.