The Mexican Senate recently approved the creation of a Special Commission to Review and Oversee the Bankruptcy Process of Altos Hornos de México, one of the country’s largest steel producers. The commission’s purpose is to protect the interests of workers and former employees of AHMSA, which has been undergoing a bankruptcy procedure since early 2024. The commission will be led by Luis Fernando Salazar Fernandez, a congressman from Coahuila, the northern state where the steel company is based. This move comes after AHMSA, which had an annual steel production capacity of 5.5 million metric tons of liquid steel, was forced to halt operations due to insolvency.
AHMSA, once a dominant player in Mexico’s steel industry, has been struggling with significant financial difficulties for several years. The company’s financial problems reached a tipping point in early 2024 when it was unable to meet its obligations, leading to a suspension of production. In November 2024, the federal court handling AHMSA’s case officially declared the company bankrupt, signaling the beginning of the liquidation process. The court ruling allows AHMSA’s assets to be sold off to the highest bidder, with the proceeds directed toward paying off creditors. This includes settling both financial and labor-related debts.
The formation of the Special Commission is critical because it aims to ensure that the interests of AHMSA’s workers and former employees are prioritized during this difficult process. The commission will oversee the bankruptcy proceedings, ensuring that the workers receive the compensation and settlements they are owed by law. In a statement, the Senate emphasized the importance of protecting the workers' rights, particularly in the context of the significant economic hardships faced by those who worked at AHMSA. Many of the company’s employees have been left without their wages or severance pay since the company’s financial collapse.
The bankruptcy and asset auction of AHMSA mark a major turning point in the Mexican steel industry. AHMSA had been one of the country’s largest steel producers, and its closure has had a profound impact on the local economy, particularly in the region of Coahuila. The plant’s closure has resulted in job losses and a decrease in steel production, which has affected the supply chain and domestic steel prices. Moreover, AHMSA’s bankruptcy has raised concerns about the future of the steel industry in Mexico, as the country faces increased competition from imported steel and the challenge of maintaining a strong domestic manufacturing base.
The process of liquidating AHMSA’s assets will involve the sale of its land, equipment, and facilities. These assets are expected to be sold free of liabilities, meaning the new owners will not be responsible for any of the company’s outstanding debts, including labor obligations. This could make the assets more attractive to potential buyers, but it also raises concerns about the treatment of AHMSA’s workers. The Special Commission’s role in ensuring that the workers receive fair compensation is crucial in maintaining social stability and addressing the grievances of those affected by the bankruptcy.
The creation of this commission is also a response to the political and social pressures surrounding AHMSA’s collapse. With the company being one of the largest employers in Coahuila, the bankruptcy has attracted significant attention from local communities and political figures. The Mexican government, led by the National Regeneration Movement, MORENA, party, which holds political power in the country, has expressed a commitment to ensuring that the workers’ rights are respected during the bankruptcy process. The commission’s diverse and equitable composition, which includes members from different parliamentary groups, reflects the government's intention to manage the situation with transparency and fairness.
In addition to addressing the workers' compensation, the commission will likely play a role in evaluating the future of AHMSA’s assets and their potential repurposing. Some analysts suggest that the plant’s facilities could be sold to another steel company or repurposed for other industrial uses, while others propose that the government consider investing in the assets to create a new, more sustainable steel production model. However, any decision regarding the future of AHMSA’s operations will depend on the outcome of the asset auction and the priorities of the new owners.
The bankruptcy of AHMSA serves as a cautionary tale for other companies in the steel industry, particularly in emerging markets like Mexico. It highlights the challenges faced by traditional steel producers in an increasingly competitive and volatile global market. The transition to more efficient and sustainable production methods, as well as the need for financial restructuring, will likely shape the future of the Mexican steel industry. For now, the priority remains on protecting the workers and ensuring that they receive the compensation they are entitled to during the bankruptcy process.
