Doing Business in Harm's Way

How companies in Juárez are keeping their workers secure

The scene didn't do much to impress the potential investors. Homero Galindo, who often gives city tours to foreigners mulling investments in Mexico's Ciudad Juárez, was squiring a group around last December when they came upon a bullet-riddled car. Police hadn't arrived yet, and the slumped bodies of a federal prosecutor and his secretary were still inside. "It wasn't a very pleasant sight, and I had these investors with me," says Galindo, who works for American Industries, a company that builds industrial parks.

It's all in a day's work in Juárez, a gritty city across the border from El Paso. As it endures a bloody turf war among drug cartels, Juárez might seem like a tough sell for investors. Over the past 15 months, more than 2,000 people were murdered. Some victims' heads were stashed in ice chests along with menacing notes. One body was left dangling from a highway overpass.

While most of the dead were from drug gangs, the lawlessness triggered a wave of kidnappings and carjackings. In January a manager for Lear (LEA), an auto parts maker based in Southfield, Mich., was kidnapped for three days before being rescued by soldiers, and an executive for another U.S. corporation narrowly escaped carjackers by speeding into the company parking lot.

With some 9,000 El Paso residents commuting to work in Juárez maquiladoras—export-oriented factories—corporate security chiefs from Tokyo to Detroit went on red alert. One American company sent in outside experts to give personal security briefings to employees, and workers are now paid on different days each month so they won't be targeted at banks by thieves. Managers were told to alter their work routines, leave Juárez by sundown, and stick to two key roads where in January police patrols were beefed up, creating relatively safe corridors between the border and the industrial parks. "Some of us started carpooling so that we don't drive alone," says a manager whose bosses won't let him speak publicly about security measures.

Companies have started holding business meetings on the U.S. side of the border. And if visitors do come to Juárez, instead of scheduling dinner in a picturesque Mexican restaurant, they eat at the factory. "We have tried to discourage travel to Juárez—trips have to be approved in advance," says another American manager. "We've been doing a lot of Net meetings."

And those foreigners Galindo was working with? The incident "didn't scare them off," he says. The company, a U.S.-European telecommunications joint venture, has made eight more visits and Juárez is still a strong contender. With thousands of federal police stationed in the city since March, Galindo says, "they understand that a solution is under way."

    Before it's here, it's on the Bloomberg Terminal.