Global news

Companies shun violent Mexico

10 January 2011 - The rising rate of drug-related violence in Mexico, as well as increases in crimes such as robberies, extortions, and kidnappings, have made a number of companies hesitant to invest in the country. 

Among the companies that have shied away from opening factories in Mexico is the Swedish appliance maker Electrolux, which announced Dec. 16 that it would open a new appliance factory in Memphis, US, rather than Mexico because of security concerns. Whirlpool also said that security was a factor in its decision earlier this year to not build a factory in Mexico and instead build the facility in Cleveland, US.

The growing rate of crime in Mexico has also made some executives hesitant to take jobs in the country. However, some companies are continuing to do business in Mexico, albeit after making some adaptations. Ryder System, for example, tightened its travel restrictions and began requiring employees to perform shift changes during daylight hours in response to the hijacking of trucks carrying consumer electronics earlier this year. Snowmobile and all-terrain vehicle-maker Polaris Industries, meanwhile, has attached tracking devices to company cars and is hiring armed guards to protect its facility in Monterrey.

Source: Wall Street Journal