Apple, Failing to Meet Terms With Mexico, May Pull Out
Business is booming two years after Mexico opened up its microcomputer market to foreign companies, but one of the pioneering U.S. firms could be on its way back across the border.
Apple Computer Inc., the second-largest U.S. personal computer maker, says it cannot comply with terms authorizing 100% ownership of its Mexican unit, Apple de Mexico. Its operations here have come to a virtual standstill, and some industry analysts believe Apple may pull out.
“My impression is that Apple will leave Mexico,” said one analyst who asked to remain anonymous. “It has lost its best people, has serious distribution problems and has no investments--unless it starts from scratch.”
Industry Has Grown Quickly
Mexico’s microcomputer industry has grown quickly since Apple and other U.S. firms such as Hewlett-Packard Co. arrived in 1984 in partnership with Mexican investors. In 1986, these companies and newly established foreign and local firms sold 92,156 units, compared to 72,746 the previous year. Experts see a 20% increase in 1987.
Cupertiino-based Apple’s troubles started when ittried to match International Business Machines Corp.’s precedent-setting agreement in 1985 which gave the computer giant 100% ownership of its Mexican operation.
Mexico allows full foreign control in the microcomputer industry to firms that agree to create jobs and export a large percentage of their production.
But four months ago, after year-long talks ended in government approval for Apple’s proposed 100% ownership of operations here, management in California decided that it could not meet a 3-1 export-import ratio and reopened negotiations.
Very Little Invested
Apple, which has invested very little since arriving in Mexico, said it lacks the plant infrastructure to meet the export requirement. “Apple feels it cannot comply with the export rules because of the investments necessary in Mexico,” Gene Towle, Apple de Mexico’s technical marketing manager, told Reuters.
But many analysts here say Apple is trying to bend government rules and lacks any interest in investing here. “Apple wants to sell computers in Mexico without committing itself to investing a cent and with as little effort as possible,” said Mario Topete, a computer consultant.
