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Thursday, April 27, 2006 - Page updated at 12:00 AM

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U.S. firms say Mexican boycott could backfire, hurt companies

The Associated Press

U.S.-owned companies in Mexico


Some of the major U.S. companies with operations in Mexico, where activists are organizing a May 1 boycott of American products in protest of U.S. immigration policy:

Wal-Mart's Walmex subsidiary: 140,000 workers.

Delphi:70,000 workers.

General Electric:30,000 workers.

McDonald's:12,000 workers.

General Motors:11,700 workers.

Kimberly-Clark:8,000 workers.

Ford:3,500 workers.

Sources: American Chamber of Commerce in Mexico, company officials and Web sites

MEXICO CITY — A U.S. business group lashed out Wednesday at the Mexican "Nothing Gringo" campaign timed for May 1 to coincide with the "Day Without Immigrants" boycott in the United States.

The American Chamber of Commerce in Mexico said organizers are risking a backlash and foolishly targeting some of their best allies, since U.S. corporations have actively lobbied the U.S. Congress for immigration reform including legalization for many of the estimated 11 million undocumented migrants.

Mexicans' refusal to "buy American" on May 1 could further polarize the debate and make reform supporters seem anti-American at the very moment that lobbyists are trying to persuade lawmakers in Washington to pass a bill that would benefit migrants, worries Larry Rubin, the chamber's president.

Migrants and their supporters in the United States are being encouraged to skip work and school and not spend money for one day to demonstrate the migrants' importance to the U.S. economy.

South of the border, Mexicans are targeting American stores and chain restaurants — "That means no Dunkin' Donuts, no McDonald's, Burger King, Starbucks, Sears, Krispy Kreme or Wal-Mart," reads one e-mail making the rounds.

But even activists are confused about which companies are U.S.-owned. Sears is cited by boycott organizers, despite the fact that Sears' Mexico stores were bought by Mexican billionaire Carlos Slim in 1997. And few organizers mention Vips — the chain of ubiquitous Mexican diners — even though they are owned by Wal-Mart Stores Inc.

A quarter of Mexico's formal private-sector jobs with regular pay are provided by U.S. firms, according to the chamber, including Walmex, the Mexican Wal-Mart subsidiary that is the nation's biggest private employer with 140,000 workers. Delphi Corp., the U.S. auto-parts maker, is second with 70,000 workers.

"Certainly, companies could be hurt," Rubin said at a news conference Wednesday.

The chamber represents more than 2,000 American and other foreign companies doing business in Mexico, and says its members are responsible for $100 billion of investment in the country.

The companies say they're helping Mexico by providing jobs, but activists counter that they pay so little that Mexicans have little choice but to head north.

Backers of the Mexican boycott insisted Wednesday that the protest could send a message that American companies should offer better pay and benefits to their Mexican workers.

"They continue to exploit Mexicans with badly paid jobs and no labor rights," said Roberto Vigil, who works in the Mexico City office of the California-based immigrants rights group Hermandad Mexicana. "They're kind of two-faced: they support, but they exploit."

Unskilled workers at U.S. companies usually start with Mexico's minimum wage of $4.35 a day. While many earn more, such as seamstresses making an average of $5.89 a day — even these wages pale in comparison to paychecks offered by the same companies north of the border, conceded the chamber's Humberto Banuelos.

A cashier at Subway earns about $189 a month in Mexico City. In Colorado, Subway cashiers make four times that — $824.

Companies also often hire workers for three-month periods to avoid paying health insurance or other benefits, activists say.

The only way to stem immigration is to narrow the income gap between the two countries, said Robert Pastor, director of the Center for North American Studies at American University in Washington. He pointed to the European Union, where migration slowed after heavy investment reduced the income gap in its poorer countries.

But raising wages would cause Mexico to lose ground to countries with cheaper labor, such as China and India. Felix Boni, director of equity research at Scotiabank's Mexican brokerage firm, suggested boosting Mexico's productivity and job growth.

Copyright © 2006 The Seattle Times Company

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