Tales from the Rio Grande Part Two

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Global Trade

You may read the first part of this post here

The other story I heard while down in Mexico was the US parent company’s efforts to “manage down” to the smallest dollar amount of crime possible. In other words, US companies have developed policies and procedures to monitor and take action against employees in these maquiladoras who steal from them. This sounds sensible enough but the issue is the extent to which the parent company needs to deploy risk mitigation strategies. These procedures and policies are designed to protect against theft valued at $50,000 or more. The challenge relates to managing theft under that amount. It’s a very big problem and was much bigger back when the scrap metal market was booming. With the economic situation so poor in Mexico, frequently occurring petty crimes take a big bite out of profits. And when one considers the economic situation in the US, the last thing any company needs to deal with is crime inside the plant.

If there is a sure fire way to deter business with any trading partner, it’s crime. President Felipe Calderon has literally deployed the troops to restore law and order to cities affected by the drug cartels. Let’s hope President Obama doesn’t turn protectionist. Blight doesn’t know borders.

–Lisa Reisman

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