DEARBORN, MICH. - While politicians debated Mexican loan guarantees last week in Washington, automotive executives in Detroit already were lined up in support of Mexico and touting the country's long-term promise. ``Despite the peso's problems, we're confident that exports to Mexico will continue to grow,'' said Thomas Stallkamp, Chrysler Corp.'s top purchasing executive. ``They just won't be growing at the rapid pace we witnessed in 1994 - not for a while, anyway. Even so, our position on the potential of the Mexican market remains unchanged.''
Stallkamp was speaking at a conference on the Mexican automotive market held Jan. 25 in dearborn, a suburb of Detroit. Speakers at the conference focused on the 40 percent devaluation of the peso since mid-December and its effect on the Mexican auto industry. While not playing down the huge economic upheaval Mexico faces in the near-term, the speakers were uniformly bullish on Mexico's long-term outlook.
``This sudden devaluation has been a major shock to all of us,'' said Victor Barreiro, chairman of Ford of Mexico. ``It's been a month, and we still don't know the ramifications and implications.''
Still, he noted that the Mexican auto industry fundamentally is ``very strong'' and will continue to benefit under the North American Free Trade Agreement.
``The Mexican industry will come back,'' Barreiro predicted. He said Mexico remained a good location for suppliers.
``We are taking a setback,''Barreiro said. ``There's a temporary problem of liquidity, not solvency, that can be solved in a short period of time.''
Stallkamp said it was important for Congress to endorse the pending $40 billion package of loan guarantees designed to aid Mexico's recovery from the peso crisis and restore investor confidence.
``Each of us should remember that Mexico's flame is far from extinguished,'' Stallkamp said. ``By far the biggest problem facing Mexico today is a crisis of confidence. We believe that, if the U.S. government takes strong action to quickly restore confidence in Mexico, there's no reason why that flame can't burn brightly again.''
The one-day seminar on the Mexican auto market, attended by 300 people, was sponsored jointly by Automotive News - a sister publication of Plastics News - accounting firm Arthur Andersen, law firm Baker McKenzie, Bank of America, consultants InterAmerican Holdings Co. and executive recruitment firm Korn/Ferry International.
