US company considering moving Argentinian sub

kurtdillard

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On my flight down over the weekend my seatmate happened to be the executive of the Argentinian subsidiary for one of the US firms with the largest presence down here. No names or industries will be mentioned, I realize that that diminishes the credibility of this post, but I don't want to make anyone's life more miserable than it already is.

We were bemoaning the decisions of the Kirchner administration over the past year and I explained the exit plan for my family. He told me about how frustrated the execs at the parent corporation are that its impossible to create accurate financial forcasts and that they can't believe they are unable to regularly pull profits out of Argentina. The Argentinian sub gets all the required approvals, but more often than not the central bank cancels dividend payments headed to the US. So they're trying to figure out how to move the whole operation to another Mercosur country, then they'd only have to deal with the huge mess of getting their goods imported into the country.

So there you go Kristina, Moreno, et al: the fruits of your policies will be more than just reduced foreign investment, but companies actually leaving Argentina for more hospitable locales. More than just a few banks, companies that manufacture millions (billions?) of pesos worth of goods.
 
Yep. I work for a sub for a North American company. We are seriously looking at expanding across the river to Uruguay as a hedge (in more ways than one) against the insanity.
 
The list of companies either moving out or sizing down drastically over the past 3 years has been/is impressive. I am not just talking about North Am companies either, Swiss, German Italian and oh yeah......Spanish.
Xtina et al is a ship of fools sailing off the edge of the of the world economy. This country is hostile to business.
I wonder who will provide [good] jobs when there are zero investors?
 
I know a popular American expat here who runs a real estate software company that has been visiting Mexico and is now setting up a branch there to run most of their operations and potentially withdraw from Argentina completely.
 
Xeneizes said:
I know a popular American expat here who runs a real estate software company that has been visiting Mexico and is now setting up a branch there to run most of their operations and potentially withdraw from Argentina completely.
Hey, we know the same people!

And yep, can't blame him at all. The problem is that by the time the real results of these current policies impact, the current government will have long since retired, and the next government will cop all the problems.
 
You can still get profits out, but at 6.8 ARS/USD using blue chip swaps. At some point they will devalue officially and that will take some of the pressure off and we'll be able to pull cash out again.

But forget about getting cash out of Argentina at 4.6. It is better to just reinvest locally at the moment.
 
This is absolutely true. Most of the smart money has already exited Argentina or is in the process of doing it now or strategizing their exit strategies for leaving Argentina.

CFK is a fool. Not only will this hurt with all these companies leaving but also there are MANY companies that will stay out of Argentina until things there stabilize which could take a long while.

Other countries like Uruguay are very pro-business and also has a solid and functioning banking system. I don't blame all of these companies and individuals leaving for other friendly countries.

I love Buenos Aires but at some point people have to ask "at what cost?".
 
ghost said:
The cost benefit ratio has been exceeded!

I would tend to agree, at least from a business perspective.

Between the high cost of doing business here, both in hard currency and time spent on staying in compliance, the anti-business climate, the adversarial relationship between employee and employer, the very real and continual threat of lawsuits, the ineffective banking system and the currency restrictions - there really is very little reason to stay here.

Too many better business options in SA that provide the same near-shore benefits, lower costs, a more "universal" Spanish if your employees are working in Spanish, a better business climate, less restrictions, etc.
 
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