Thursday 15 December 2016

Companies are already Cancelling Plans to Set Up Operations In Mexico

Trump’s Threat Damps Companies’ Plans to Move U.S. Jobs Abroad





President-elect Donald Trump’s threat of retribution against companies that move jobs out of the U.S. is already having the effect he probably intended: some business leaders are pausing plans to seek foreign addresses.
Ross Baldwin, whose San Diego-based firm Tacna helps U.S. companies set up manufacturing operations in Mexico, said three new clients put their plans on hold until they see what Trump does as president.
At the McAllen Economic Development Corp., which assists companies seeking to expand across the Mexican border from the Texas city, two of five companies currently considering a move have put the brakes on their plans because of Trump, said Keith Partridge, the development corporation’s chief executive officer.
Trump’s Twitter vow that companies shifting jobs out of the U.S. will face “consequences” under his administration introduced new and difficult-to-gauge political risk for businesses considering offshoring to lower costs. The incoming president’s passion for the cause was underscored at his Dec. 1 rally to celebrate an agreement he reached with United Technologies Corp.’s Carrier unit to keep about 800 factory jobs in Indianapolis instead of moving them to Mexico.
“What they did in Indiana has made it clear to every board member in America that there is a clear and present danger in outsourcing” said Jim Courtovich, managing partner of the Washington public affairs firm Sphere Consulting, who said he has already heard from worried business executives.

GN Store Nord A/S looked into moving some hearing-aid production work from Minnesota to Mexico earlier this year but put the plan on hold because of U.S. campaign rhetoric, a person familiar with the matter said. GN wants to explore incentives to keep production in Minnesota and whether there would be penalties for relocating jobs to other countries, said another person. Both people asked not to be named because the discussions are private. 
GN doesn’t comment on internal deliberations and has “no plans whatsoever” to move its Minnesota production, Anders Hedegaard, CEO of GN Hearing, said in an e-mailed statement. “We have recently consolidated our U.S. production in Minneapolis, where we have invested heavily and increased staff. We are very pleased with the location.”

Source: Bloomberg


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