State firms find profits across border

July 29, 1991|By Liz Atwood | Liz Atwood,Evening Sun Staf

Several Maryland companies say their operations in Mexico are profitable or due for expansion. But officials caution that doing business there requires flexibility, preparation and making sure key people know the language.

Hunt Valley-based McCormick & Co. has worked with a joint venture in Mexico since 1947. McCormick de Mexico SA produces marmalade, mayonnaise and spices that are sold outside the United States.

Historically, an unstable economy and government made it difficult to do business in Mexico, says James Albrecht, vice president and managing director of McCormick's International Group. But he says that in the last three years the operation has become one of McCormick's most profitable enterprises.

Albrecht says the government of Mexican President Carlos Salinas de Gortari appears to be committed to business, but American companies still will need help in working there. He advises finding a partner in Mexico familiar with the government and trade associations to help deal with the bureaucracy.

One of the biggest drawbacks is that so many Mexican workers are unskilled. "The intelligence is there, the work ethic is there. But they need training and education," he says.

Another problem with manufacturing in Mexico can be the instability of the work force, says Roland Gerard, president of Plantronics Futurecomms Inc. in Frederick. His company has been making telecommunications equipment in Tijuana, Mexico, for 20 years.

The factory has an attrition rate of 13 percent a month. Gerard says Mexican workers from rural areas often come to earn money to take back to their families. They frequently get homesick and quit their jobs at the plant to visit their families. Often they later return to their jobs.

To make it easier to train new workers, the company has broken down production into a number of simple tasks that are easy to learn, he said.

David B. Cooke, vice president of the International Banking Group and manager of the Latin American Division of the First National Bank of Maryland, says businesses need to be aware that there are great differences within Mexico in terms of its geography, transportation, education and financial services. Monterrey, Guadelajara, and Mexico City are places more favorable to trade, he says.

Of course, locations depend on the industry. Bethesda-based Marriott Corp. last year opened hotels in Cancun and Puerto Vallarta. The company is planning to develop eight or nine more hotels in Mexico to capitalize on the growing tourism industry. Marriott had earlier experience with a hotel in Mexico that opened in the early 1960s and closed in 1983.

Towson-based Black & Decker Corp. has had business in Mexico since 1975. It now operates two plants employing a total of 1,800 people. One facility in a suburb of Mexicio City makes power tools such as sanders, drills, grinders and saws. The other, 130 miles north of Mexico City in a town called Queretaro, makes irons and wallpaper strippers.

Although Mexico frequently is criticized for corruption, David Stone, president of Black & Decker's International Group, says: "There is corruption, but it's not as bad as New York City."

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