Mexico Rejects IBM Proposal to Make Personal Computers

The National Commission on Foreign Investments has rejected a proposal from International Business Machine Corp. to build personal computers in Mexico in an operation over which IBM would retain total control.

A telex from the commission received late Thursday said the proposal “was turned down on the terms proposed by the business since businesses already exist that currently manufacture the microcomputers with a majority of national capital, such as Hewlett Packard and Apple.”

If the plan had been approved, IBM would have become the first to operate a wholly owned U.S. company in the microcomputer field in Mexico.

IBM’s proposal had drawn protests from 30 other companies making personal computers, most of which are units assembled from imported kits. They are all joint ventures, with Mexican majority ownership.

A 1973 law requires Mexican ownership of more than 51% of subsidiaries of foreign companies operating in the country. But last February, Mexico relaxed the law by allowing up to 100% foreign ownership in 17 fields.