Texas blackouts cost Mexican manufacturers $2.7B

Rolling power blackouts have affected key industrial sites across Mexico, including border states home to hundreds of factories producing everything from auto parts to electronics.

Factories across northern Mexico states such as Tamaulipas, Chihuahua and Nuevo Leon reported more than $2.7 billion in losses from blackouts that started Monday when Texas began limiting natural gas supplies, according to Mexico’s National Council of the Maquiladora and Export Manufacturing (INDEX).

INDEX reported 2,600 companies across Mexico have been affected by the power outages since Monday. 

General Motors (GM), Mazda and Volkswagen are suspending some of their operations for several days in Mexico due to the natural gas shortage, the automakers said in separate statements.

“Due to the natural gas shortage affecting the Mexican territory, our Silao Guanajuato Complex was forced to stop its operations on the night of February 16 and February 17,” GM said in a statement.

Volkswagen adjusted the production schedule of its plant in Puebla where it produces the Jetta, Taos and Golf model cars. 

Japanese automaker Mazda announced it would stop production of its plant in Salamanca, Mexico, starting Wednesday due to the lack of natural gas from the U.S. Production could resume by Friday.

More blackouts across Mexico could be on the horizon with Texas Gov. Greg Abbott’s announcement that natural gas sale and exports to Mexico will be suspended until Sunday.

“Some of the natural gas produced in Texas is occasionally shipped out of state. Today I have issued an order effective today through February 21, requiring producers who have been shipping to locations outside of Texas to instead sell that natural gas to the Texas power generator which will also increase the power produced and it will be shipped to homes in Texas,” Abbott said during a Wednesday press conference. 

Ports of entry across Texas have been mostly unaffected by the wintry weather, according to U.S. Customs and Border Protection (CBP).

“The Los Indios International Bridge in Brownsville, Texas, has been closed until further notice due to no electricity or water. Commercial traffic is diverted to Veterans International Bridge,” according to a Thursday email from CBP.

Click for more FreightWaves articles by Noi Mahoney.

More articles by Noi Mahoney

Borderlands: Forager expands with Mexico hires

Samsara hits milestone with $300M run rate

TrinityRail permanently closing Texas plant