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

Renzi

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Whataboutism abounds here. The discussion is clearly about why a company like Walmart would leave Argentina. Some believe it reflects a wider global situation, while others think the reasons are more closely linked to the situation in this country. If anything, Renzi, what you post above backs up what jblaze and THE_TIGER said. A company that is willing to exploit and cheat its way to success still cannot make it work in Argentina. It seems in Mexico, the "masters of figuring shit out" seems applicable.
I'm not sure Wallmart's not wanting to do business here is really a measure of anything in real economic terms. It's like being a woman that Donald Trump doesn't find attractive. It's probably a good thing.
 

Rich One

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My new favorite airline, Jetsmart, seems dead in the water. I flew here from Santiago for something like $35 or $40 dollars earlier in the year...coming from Bogota. I think they have stopped all service, based in Chile. I hope they comeback....
Where you read these News ..!! _Quote your Source..? Book now!

Jetsmart purchased Defunct Norwegian Airlines routes and operates out of El Palomar. Below is the Schedule announced for October onward Domestic and International. The Headquarters are in Santiago, Chile




 

Renzi

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Where you read these News ..!! _Quote your Source..? Book now!

Jetsmart purchased Defunct Norwegian Airlines routes and operates out of El Palomar. Below is the Schedule announced for October onward Domestic and International. The Headquarters are in Santiago, Chile




Don't mean to pee on your sneakers, but that's an old article. Currently, the low costs and the government (who is trying to force them to relocate to EZE) are fighting it out in court over the closure of El Palomar and employees have been picketing outside.
 

semigoodlookin

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I'm not sure Wallmart's not wanting to do business here is really a measure of anything in real economic terms.
Why not?
If it's a case of don't want, goodbye, and good riddance, fair enough. But how does that translate to not meaning anything in real economic terms? I cannot see how a major international company leaving the market does not impact the economy in one way or another. If even one person lost their job, is that not a measure of something in real economic terms?
 

QuilmesSlo

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It seems to me the question is, whether this is part of the bust-boom-bust-boom cycle, or whether Argentina has entered a new phase in which it will not boom due to investors finally learning lessons. Hard to say.
 

Renzi

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Why not?
If it's a case of don't want, goodbye, and good riddance, fair enough. But how does that translate to not meaning anything in real economic terms? I cannot see how a major international company leaving the market does not impact the economy in one way or another. If even one person lost their job, is that not a measure of something in real economic terms?
If the business model of the company in question is based on bribes and slave labor, then it's debatable whether they actually add to the economy more than they take away. Mexico's economy hasn't grown since Walmart became its largest private employer, but the company itself has done quite well. If they suddenly left there would probably be a temporary shock to the economy, but the kids getting paid nothing will simply move onto another form of labor exploitation (in Mexico the possibilities are endless).
 

semigoodlookin

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If the business model of the company in question is based on bribes and slave labor, then it's debatable whether they actually add to the economy more than they take away. Mexico's economy hasn't grown since Walmart became its largest private employer, but the company itself has done quite well. If they suddenly left there would probably be a temporary shock to the economy, but the kids getting paid nothing will simply move onto another form of labor exploitation (in Mexico the possibilities are endless).
Fair enough, I agree and yes it is telling that Walmart's gain is not Mexico's.

Coming back to Argentina. Those getting paid nothing in Walmart, Nike, Falabella, and the other companies leaving, where are they going to simply move on to? In Argentina, it's not kids working in those places, but all kinds of people. Those companies leave and those thousands of employees are out of work, without endless possibilities. I am also not sure how terrible the salaries are from those companies compared to others in Argentina. If those jobs cannot be replaced it is not just a temporary shock but just another event that further erodes the economy here.
 

Pauletthp

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if you appreciate bank lending in retail, it is the girth of what selling is all about. Having warehouse, distribution and employee costs all involve dexterity of how it is managed. OR how current trends allow for opportunities. Saying "Trump did this allows for interesting comments as bank lending and/or interest rates have been historically lower that any other president. Do I think his rhetoric is foul yes. Business wise, he gets it..
 

antipodean

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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?
With the airlines it has more to do with Argentina than COVID. Most started making plans to pull out once we entered into CEPO and then Alberto won the election (similar to the "first wave" did when it was Cristina).. the flight sale ban and COVID uncertainty simply accelerated it.
  • LATAM - No major changes to any other markets in region.
  • Air NZ - Exit from region but may come back to Brazil, Peru or Chile in future. Argentina exit planned for a while.
  • Norwegian - technically they still serve GIG, but suspended at the moment.
  • Emirates - Terminated ULH routes such as SCL, MEX and EZE. All flights terminate in GIG or GRU. Argentina was on the chopping block for about a year however as went down to a handful of flights per week while GIG remained daily.
  • Qatar - Still serve GRU, similar to EK it was planned for a while.
  • Qantas - Moved ops to SCL
  • South African - Moved ops to GRU, but suspended indefinitely at the moment due to the airlines own situation.
Why do the airlines leave? It is not because Argentines don't travel or can't pay a premium. All airlines after having experienced and left Argentina report the same two reasons:
  • Currency controls - Getting paid is one thing, getting the money home is another. The worst part is the disparity and fluctuations between the real operating costs here (more often than not linked to CCL or Blue rates) and official rates - remembering that air tickets / cargo are usually sold in the past for a service rendered in the future.
  • Labour rules - Argentina is one of the only countries in the world where the president may wake up one morning and dictate that it is forbidden to fire or suspend anyone. Prior to this there was the famous double indemnity. Airlines need to scale costs, like any business to survive. Then you have labour unions making life very difficult and imposing arbitrary rules on companies - for example during the COVID crisis airline A could pay their employees 50%, airline B 75% and poor old airline C who did not know the "trick" to getting CGT and MoL permission to pay less, had to pay 100%. You also have a lot of insane age-old restrictions on working hours like requiring shifts to be 5 or 8 hours in length, yes or yes, with regular working days rather than rotating rosters. Anyone who has any idea about airline scheduling knows that this spells massive inefficiency.
Multi-nationals create local employment and most importantly, actually pax significant taxes here. Many also bring in dollars thanks to having developed global supply chains and critical mass to actually be able to compete globally and get Argentine products to market. To shrug them off as unnecessary luxuries while praising the expansion of social programs that need significant tax revenues to be able to fund is a rather ridiculous and short sighted approach when your bank balance is close to zero and you are re-mortgaging the house each month...


My concern are not the handful of shops (although Zara does use a significant amount of Argentine fabrics and made in Argentina garments for sale in Argentina and LATAM, explaining why many of the clothes here are a little different than the same models available in Europe if they are not seconds or from previous seasons...) or foreign airlines (despite being a source of thousands of jobs), but industrial companies like BASF etc. Imagine if the car and machinery manufacturers go next... once the supply chain starts to disintegrate, costs creep up and the whole system collapses in on itself. Then what? To the soy fields, comrades!? To vaca muerta? To a lithium mine in Jujuy? Trabajo para todxs.
 

Rich One

Registered
Don't mean to pee on your sneakers, but that's an old article. Currently, the low costs and the government (who is trying to force them to relocate to EZE) are fighting it out in court over the closure of El Palomar and employees have been picketing outside.
Save your Pee..!!( May have Covid..!)

  1. Jetsmart bought out Norwegian it¡s a deal
  2. Jetsmart will operate in October and you can book flights NOW
  3. Jetsmart may operate from Aeroparque/Ezeiza or El Palomar if issues resolved



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