Non-Stop Exodus of Multinationals Leaving Argentina...!

[Alpinista]

In the USA, they arent leaving- they are just going bankrupt...
Their excuse is something about a global economic depression.
J.C. Penney, Brooks Brothers, Neiman Marcus, J. Crew, Pier1 Imports, Lord and Taylor- and dozens more- all "leaving" the USA because how terriblly Alberto and Christina have been ruining the economy.

Oh- wait, Trump did that.

Yes, its true, we are in a global depression, and Argentina is in it too.

If the EEUU goes into recession (or even depression), people will at one point will invest again. Companies go bust (that's part of the game), other things come up and life goes on.

Here the big difference is: no one will invest in the foreseeable future. The confidence in the country hit rock bottom, the problems are endless:
* Currency controls with relatively high inflation
* High risk of going into hyperinflation
* Taxes are absurdly high
* Trade unions are too powerful
* Problem with legal ownership (not only direct expropriation, but also in form of imposed price controls)

¿Por qué la Argentina no atrae inversiones?

Sobre 202 países medidos por la ONU, es el segundo de peor desempeño en la evolución del stock la inversión extranjera directa en lo que va del siglo XXI. Inestabilidad política, economía errática, presión tributaria e inseguridad jurídica son causas apuntadas por empresarios y economistas

www.infobae.com

 

[jblaze5779]

I remember going to a jcp 8 or so years ago. I walked around and wondered where the stock was. That place has been dieing for a decade.

 

[Ries]

My point is that the economy, worldwide, is terrible right now, and shaky companies are closing, and well run companies are pulling back and closing outlets. This is not in any way specific to Argentina.

It is absolutely true that the import export, ownership, and tax laws in Argentina make it difficult for multinationals to do business the same way they do in other places.

Personally, that doesnt bother me a lot- I dont tend to patronize large multinational chains no matter where I am.
I have been, once or twice, to the Zara stores in BA- and found them uninteresting. I buy locally made stuff, generally.
I wear Argentine cotton work clothes, underwear, belts, jackets, and guardapolvos in the US. I dont need to buy bangladeshi or vietnamese made clothes in Buenos Aires.
In both countries, I prefer to patronize smaller, family owned businesses.

I have walked by Falabela, but never seen anything I wanted. The other places in the article were mostly auto parts tier 2 and 3 suppliers, who relocate to be near bigger factories in Brazil. The fact that BASF is no longer making auto paint in Argentina is not a really huge signifier of much, except that Brazil is a bigger auto manufacturing country.

Several of my Argentine friends who have small businesses are actually doing pretty well right now, with people buying furniture and housewares, since they cant go out to eat.

 

[Alpinista]

My point is that the economy, worldwide, is terrible right now, and shaky companies are closing, and well run companies are pulling back and closing outlets. This is not in any way specific to Argentina.

It is absolutely true that the import export, ownership, and tax laws in Argentina make it difficult for multinationals to do business the same way they do in other places.

Personally, that doesnt bother me a lot- I dont tend to patronize large multinational chains no matter where I am.
I have been, once or twice, to the Zara stores in BA- and found them uninteresting. I buy locally made stuff, generally.
I wear Argentine cotton work clothes, underwear, belts, jackets, and guardapolvos in the US. I dont need to buy bangladeshi or vietnamese made clothes in Buenos Aires.
In both countries, I prefer to patronize smaller, family owned businesses.

I have walked by Falabela, but never seen anything I wanted. The other places in the article were mostly auto parts tier 2 and 3 suppliers, who relocate to be near bigger factories in Brazil. The fact that BASF is no longer making auto paint in Argentina is not a really huge signifier of much, except that Brazil is a bigger auto manufacturing country.

Several of my Argentine friends who have small businesses are actually doing pretty well right now, with people buying furniture and housewares, since they cant go out to eat.

Personally I couldnt care less about Farabella, Zara etc. I never buy anything in these stores; the few things I need I buy mostly abroad.

The problem I am seeing: who will provide jobs and work post-Covid? And I am not specifically talking about big corporations, but also Pymes/Smes. The persons who survive this crisis here (with some assets left), surely wont invest here anymore. And this is the big difference to USA/Europe. The current government admittedly herited a bad economy, and the virus did not help. But currently they are doing all they can to make it even much worse.

 

[Dougie]

In the USA, they arent leaving- they are just going bankrupt...
Their excuse is something about a global economic depression.
J.C. Penney, Brooks Brothers, Neiman Marcus, J. Crew, Pier1 Imports, Lord and Taylor- and dozens more- all "leaving" the USA because how terriblly Alberto and Christina have been ruining the economy.

Oh- wait, Trump did that.

Yes, its true, we are in a global depression, and Argentina is in it too.

Trump caused JC Penney to go out of business? How?

I couldn't care less about multinational retailers leaving Argentina, I prefer not to patronize those places.

You're seeing these businesses leave Argentina not primarily due to global economic conditions, but because the government creates so many taxes, regulations, rules that it makes it very difficult to do business here.

I'm happy to hear that you know of people that have pymes that are doing well. I also have friends that own pymes that are just barely surviving. You'd think the government would encourage exporting, but they force you to bring money through the corrupt banks that have outrageous charges, your dollars are then changed at the official rate, subject you to confusing paperwork and regulations that are always changing, and then of course you need to pay taxes on top of that.

 

[dilmah]

In the USA, they arent leaving- they are just going bankrupt...

I think there is big difference between going bankrupt and exiting select countries.

Going bankrupts (like J.C.Penney) means company's entire business model and practices failed.
It tells more about company than a country. J.C.Penney does not flourish in Canada either.

Exiting select counties means that company is still healthy, its business practices are solid.
And it just faces unhealthy business environment in select countries.
This tells more about country rather than company.

 

[EL_TIGRE_de_Tigre]

I think there is big difference between going bankrupt and exiting select countries.

Going bankrupts (like J.C.Penney) means company's entire business model and practices failed.
It tells more about company than a country. J.C.Penney does not flourish in Canada either.

Exiting select counties means that company is still healthy, its business practices are solid.
And it just faces unhealthy business environment in select countries.
This tells more about country rather than company.

WalMart would be a great example for your point.

They are incredibly healthy and successful all around the world, yet they desire to exit Argentina by offloading it's operations.

 

[semigoodlookin]

Saying "I don't shop in them so I am not bothered they leave" only works on an individual selfish level. In context, it is bad news these major companies are leaving Argentina because of what doing so contributes too. This is not happening in isolation or in ignorance of the economy. It is happening because of the economy and is merely one more layer of what is layer by layer becoming a disaster. The erosion of Argentina's economy is continuing apace and I don't think whether I bought shorts in Zara or a TV in Falabella is what's important here.

Nike are one of the companies leaving for feck's sake, it's not like they are failing elsewhere as a reflection of a global downturn. Their reason to leave Argentina is because of specific problems in this country not because companies that were already failing are going bankrupt in the United States. Of course, it comes down to picking and choosing. Nike, like most companies, was impacted by COVID so if cutbacks have to be made, reducing operations in underperforming regions makes sense. In my opinion, Argentina should not be near the top of the list in these situations, but somehow is because of the economic shitshow going on here. Let's be clear, it's not because Argentine's don't want to buy Nike's.

 

[Caribbean Cool]

What worries me most are the airlines.

 

[semigoodlookin]

What worries me most are the airlines.

Yeah, so many are leaving. However, I think this is clearly more reflective of what's happening globally. That said, it is worrying that Argentina is so high up on the list of countries they will leave first. I ask cheekily expecting someone else to do the work for me, but does anybody know on hand whether the airlines leaving Argentina are also pulling out of other countires in South America?