Large US Companies Still Investing Heavily in Mexico: Report

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Despite rising crime in northern Mexico, large US companies have continued to invest billions in the region, reports the Houston Chronicle.

According to the newspaper, companies such as Baker Hughes and the supermarket giant H-E-B are still investing heavily; Texas companies alone accounted for $3.5 billion in investments in Mexico in the last last five years.

While direct foreign investment fell by as much as 20 percent in troubled northern border states such as Nuevo Leon, close to 2 million workers are still employed in 5,500 US-owned factories, the article adds.

States such as Nuevo Leon and Tamaulipas along the Texas border have seen significant spikes in violence in the last two years, making them some of the most dangerous places in Mexico. Most of the homicides and fighting are blamed on fighting between the Zetas and their progenitor-turned-rival the Gulf Cartel.

InSight Crime Analysis

Why is investment continuing? The article says cheap labor and proximity to US markets remain a strong lure for these companies. What’s more, spikes in killing, assault, theft, burglary, and kidnapping in large industrial hubs such as Monterrey are seen as temporary, and do not outweigh the apparent financial benefits of operating in the region.

Mexico will remain an attractive investment and growth market for US companies, especially for those in the oil and gas sector who are accustomed to working in difficult, violent and politcally volatile environments and have the money to pad their security.

And as InSight Crime has reported, most of the victims of this type of crime are smaller companies with fewer than 50 employees, who do not have the money or the connections to obtain extra security. These businesses are often forced to pay extortion and, in some cases, close because of these pressures.

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