The following are exerpts from an internal STRATFOR document that relate to Mexico. The document is not a forecast, but rather a series of brief outlines for understanding and evaluating events:

1. Swine flu developments: Our intelligence on the A(H1N1) influenza virus suggests that the data gleaned so far from Mexico is unreliable. We need to see what information comes out of the U.S. medical research agencies in the coming week to see if we can get more accurate estimates on the lethality of this particular flu strain (its ability to spread far and wide in a relatively short period of time is -- as with many flu strains -- undisputed).

2. Further questions arise over the impact that the Chrysler bankruptcy will have on U.S. as well as its neighbors, Canada and Mexico. For Canada, the key is Ontario's manufacturing sector, which accounts for 42,000 assembly and 75,000 auto parts supplier jobs.

Having suffered heavy job losses in both sectors in 2007 and 2008, the minority Conservative government cannot allow further economic hardship to strike in Ontario -- the government already has faced multiple challenges from the Canadian Liberal Party during its tenure.

For Mexico, the matter is more than political: It is a matter of life and death. The auto-manufacturing sector employs roughly 450,000 people -- 100,000 in Ciudad Juarez alone. Juarez is at the center of a drug war that has pitted the Mexican army and federal law enforcement against several cartels, which also are battling each other for control over key drug transshipment points into the United States.

Massive layoffs in the automotive sector would create a large pool of disaffected but able-bodied people, who would be great recruits for the cartels.

The situation also could widen the rift between the notoriously rebellious and independent-minded residents of Chihuahua and the federal government in Mexico City, complicating efforts by federal law enforcement to conduct operations in Juarez. The financial burden of a potential collapse of the automotive sector would only add to several economic and social problems that Mexico faces.

Mexico is suffering from the impact of swine flu, substantial decline in remittances from emigrants living abroad and low prices for its energy exports -- which the government depends on for about 40 percent of tax revenue. Added to this would be the cost of a program that obligates the government to pick up one-third of autoworkers' salaries when companies suspend factory operations.

The implications of the U.S. auto industry developments for Mexico and Canada will not be clear until the situation regarding GM - which also has been faltering -- is resolved. A restructuring plan for GM as well as Chrysler could add to the implications for auto suppliers in the United States and its immediate neighbors in North America. But GM has a much more extensive network than Chrysler does outside of North America -- with significant operations in Europe (Austria, Belgium, France, Germany, Poland, Russia, Spain, Sweden and the United Kingdom), South America (Argentina, Brazil, Chile, Colombia, Ecuador and Venezuela), Africa (Egypt and South Africa), Asia (China, India, Indonesia, Japan, Korea and Thailand) and Australia.

The possibility of a GM bankruptcy has already soured relations between the Obama administration and the German government, which refuses to rescue GM's Opel division. That issue has had political ramifications, months ahead of the German election in September. Given GM's global reach, the potential collapse of that company, following the Chrysler bankruptcy filing, would cause shock waves for a number of countries and leave their governments to deal with the domestic effects. And that might sour the Obama administration's relations with some key allies in the future.