1. FEDERAL DEPARTMENT OF WORKPLACE INSPECTION THE AUTOMOTIVE INDUSTRY IN MEXICO

2. FEDERAL DEPARTMENT OF WORKPLACE INSPECTION Federal Regulations on Occupational Health, Safety, and Environment [RFSHMAT] Official Mexican Standards [NOM] Federal Labor Law [LFT], Art. 527 General Regulations on Inspection and Penalties for Violation of Labor Laws [RGIASVLL] Constitution of the United Mexican States Art. 123, Paragraph “A”, sub- paragraph XXXI International Agreements REGULATORY FRAMEWORK FOR INSPECTIONS

3. FEDERAL DEPARTMENT OF WORKPLACE INSPECTION 1.Textiles 2.Electrical Power 3.Films 4.Rubber 5.Sugar 6.Mining 7.Iron and Steel 8.Fossil Fuels 9.Petrochemicals 10.Cement 11.Lime 12. Automotive 13. Chemicals 14. Cellulose and Paper 15. Oils and Vegetable Fats 16. Foodstuffs 17. Beverages 18. Railroad 19. Unprocessed Wood 20. Glass 21. Tobacco 22. Banking and Credit INDUSTRIAL SECTORS AND SERVICES

4. FEDERAL DEPARTMENT OF WORKPLACE INSPECTION SONORA FORD (2, 676) CHIHUAHUA FORD (1, 362) COAHUILA CHRYSLER (3, 009) GENERAL MOTORS (5, 585) JALISCO HONDA (1, 378) GUANAJUATO GENERAL MOTORS (3, 610) PUEBLA VOLKSWAGEN (17, 000) VOLKSWAGEN (17, 000) MEXICO STATE NISSAN (623) GENERAL MOTORS (662) CHRYSLER (4, 245) MERCEDES BENZ (1, 208) Major Assembly Plants Number of companies: 1,254 Workers employed: 460,020

5. FEDERAL DEPARTMENT OF WORKPLACE INSPECTION INSPECTIONS ACKNOWLEDGEMENT AND ACCREDITATION OF HEALTH AND SAFETY MANAGEMENT SYSTEMS LABOR STATEMENT REVIEW UNITS

6. Acciones Estratégicas Inspection Federal Labor Law, Art. 523, section VI - Application of workplace standards is the responsibility of the Department of Workplace Inspection RGIASVLL, Art. 12.- All worksites shall be inspected, regardless of their classification Verifies compliance with OFFICIAL MEXICAN STANDARDS set by the Secretariat, with Units A, B and C submitting the pertinent reports. Review Units Acknowledges companies that implement Occupational Health and Safety Management Systems Self-management Program RGIASVLL, Art. 15.- The authorities can check compliance with regulations on the basis of reviews or forms Labor Statement

7. INSPECTION PROCESS OPERATING PROCEDURE CARRY OUT ON- SITE INSPECTION GUIDE TO RIGHTS AND OBLIGATIONS OF THE PARTY INSPECTED REVIEW OF DOCUMENTS DRAFT DETAILED REPORT AND SUGGESTED SAFETY AND SANITATION MEASURES A NOTIFICATION OF CITATION AND LIST OF DOCUMENTS INSPECTION ORDER continued FEDERAL DEPARTMENT OF WORKPLACE INSPECTION ADMINISTRATIVE PROCEDURE ANNUAL INSPECTION PROGRAM ORDER IS GIVEN TO INSPECTOR WALK- THROUGH OF ON-SITE WORK AREAS SUBMIT REPORT FOR ANALYSIS AND FOLLOW-UP

8. FEDERAL DEPARTMENT OF WORKPLACE INSPECTION continued DRAFTING OF TECHNICAL CITATION FOR HEALTH AND SAFETY MEASURES DETERMINATION OF ALLEGED VIOLATIONS IN THIS MATTER ORDER TO VERIFY INSPECTION INSPECTOR: APPEARS ON DAY AND TIME OF THE VISIT ON-SITE WALK- THROUGH TO VERIFY COMPLIANCE WITH MEASURES SUBMIT ORDER TO INSPECTOR NOTIFICATION AND SERVING OF THE CITATATION AND GUIDE TO RIGHTS AND OBLIGATIONS OF PARTY INSPECTED DRAFTING OF THE INSPECTION REPORT PENALTIES PROCEEDING INSPECTION PROCESS ADMINISTRATIVE PROCEDURE OPERATING PROCEDURE

9. MAIN RISKS IN THE MEXICAN AUTOMOTIVE INDUSTRY REMARKS CRITICAL AREA RISK APPLICABLE STANDARD (NOM) LEVEL OF COMPLIANCE CHEMICAL POLLUTANTS: LEAD, TOTAL AND BREATHABLE DUST, ASBESTOS FIBER, TOLUENE, METHYL, ISOBUTYL KETONE, AND MINERAL OIL MIST. SOLDERING, PAINTING AREA, TINNING STATION, PRODUCTION, AGITATOR, GRINDING, DUST COLLECTOR, VEHICLE BODY DEPARTMENT, IRON, STEEL AND ALUMINUM AREA. STANDARD-010- STPS-1999 50% COMPLIES WITH THE ESTABLISHED LEVELS SMELTING, ENTRY INTO AND EXIT FROM PAINT KILN. HIGH TEMPERATURES STANDARD-015-STPS- 2001 100% COMPLIES WITH THE ESTABLISHED LEVELS NOISE VIBRATIONS CUTTERS, PUMP ROOM, PRODUCTION OF DIE CASTS, ASSEMBLY LINE CORK AND STOPPER AREAS. STANDARD-011-STPS- 2001 STANDARD-024-STPS- 2001 40% COMPLIES WITH THE ESTABLISHED LEVELS LIGHTING CIRCUITS, CUTTERS, ASSEMBLY, MAINTENANCE SHOP, SUBASSEMBLY WAREHOUSE, SEWING LINE, PRESS AND QUALITY CONTROL AREA. STANDARD-025- STPS-1999 50% LEVELS UNDER PERMISSIBLE LIMITS

10. FEDERAL DEPARTMENT OF WORKPLACE INSPECTION THE AUTOMOTIVE INDUSTRY IS RESPONSIBLE FOR 16% OF MANUFACTURING’S CONTRIBUTION TO GDP 22% OF EXPORTS THE AUTO PARTS INDUSTRY IS RESPONSIBLE FOR 6.9% OF MANUFACTURING’S CONTRIBUTION TO GDP 10% OF EXPORTS THE MEXICAN AUTOMOTIVE INDUSTRY COMPRISES: FINISHED PRODUCT INDUSTRY (MANUFACTURE AND ASSEMBLY) AUTO PARTS INDUSTRY (MANUFACTURE OF PARTS AND COMPONENTS, SUCH AS ORIGINAL EQUIPMENT FOR THE FINISHED PRODUCT INDUSTRY)

11. FEDERAL DEPARTMENT OF WORKPLACE INSPECTION VEHICLE EXPORTS BY REGIONAL DESTINATION VEHICLE EXPORTS BY REGIONAL DESTINATION NORTH AMERICA 94.09% EUROPE 2.46% SOUTH AMERICA 1.53% ASIA 0% CENTRAL AMERICA AND THE CARIBBEAN 0.68%

12. FEDERAL DEPARTMENT OF WORKPLACE INSPECTION 1.8 MILLION UNITS ARE PRODUCED IN MEXICO 1.4 MILLION VEHICLES ARE EXPORTED MEXICO RANKS 9TH IN THE WORLD IN VEHICLE PRODUCTION THE AUTOMOTIVE INDUSTRY IS THE SECOND MOST IMPORTANT SECTOR AFTER THE PETROCHEMICAL INDUSTRY

13. FEDERAL DEPARTMENT OF WORKPLACE INSPECTION ORIENTATION AND TECHNICAL ADVISORY SERVICES TO COMPLY WITH LABOR REGULATIONS. HEALTH AND SAFETY SHALL BE INCLUDED AS PART OF WORKSITES’ GENERAL MANAGEMENT PROMOTE PREVENTION-FRIENDLY PUBLIC BEHAVIOR. DECREASE IN WORK-RELATED INJURY INSURANCE PREMIUM Self-Management Program. Self-Management Program. INCLUDES COMPANIES WHOSE ECONÓMIC ACTIVITIES HAVE HIGHEST CLAIMS RATES

14. FEDERAL DEPARTMENT OF WORKPLACE INSPECTION Baja California 16% Chihuahua 20% Coahuila 18% Guanajuato 4% Jalisco 4% Mexico State 4% Nuevo León 8% Sonora 14% Tamaulipas 12% LIST OF AUTOMOTIVE INDUSTRY COMPANIES INCLUDED IN THE SELF- MANAGEMENT PROGRAM. TOTAL 110 6% 16% 5% 18% Manufacture and/or assembly of vehicle bodies Manufacture and/or assembly of parts and accessories 55% Manufacture and/or assembly of parts for the electrical system Manufacture and/or assembly of engines Manufacture of mechanical systems and their parts COMPANIES INCLUDED IN THE SELF- MANAGEMENT PROGRAM BY ECONÓMIC ACTIVITY

15. FEDERAL DEPARTMENT OF WORKPLACE INSPECTION 2nd. Sustained Improvement Phase 3 3rd. Self- management Phase 9 1st. Management of compliance with labor regulations 39 Companies Included 110 ACKNOWLEDGEMENTS ACCORDED BY SECRETARIAT OF LABOR AND SOCIAL WELFARE [S.T.P.S.]

16. Secretariat of Labor and Social Welfare FEDERAL DEPARTMENT OF WORKPLACE INSPECTION June, 2003. June, 2003. THANK YOU FOR YOUR ATTENTION.