Mexico-based aluminium production firm Nemak is about to lay off 20% of its personnel – 180 employees – by the end of July.
Nemak is a major global producer of aluminium cylinder heads for automotive firms. The auto industry took a drastic hit from the coronavirus crisis and the company has faced a sharp drop in orders. The management considers the layoff modest in scale compared to the fall in orders. While in May the firm switched into 36-hour workweek, the further drop of orders prompted another shortening of the working week, to 32 hours, effective from June. For unspecified reasons, the firm cannot apply for any of the new, coronavirus-related business support schemes offered by the state. From March, many employees were on leave, or were making use of the hours previously accumulated under the working time bank framework. Wage support was provided to employees whom the firm could not give work.
The layoff plan, along with the severance package plan, was prepared in co-operation with the works council.