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Mexico: From Crisis to Reforms and from ...

Saffie, Felipe, Ha...

Case

Mexico: From Crisis to Reforms and from Reforms to Crisis

Saffie, Felipe; Harrison, Bryan

GEM-0205 | Published September 25, 2023 | 21 pages Case

Collection: Darden School of Business

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As he prepares for a 2025 meeting of General Electric Corp. (GE), Vladimiro de la Mora, president of GE Mexico, weighs the potential benefits and risks of nearshoring production to the Mexican border. Along with major ports that accessed both the Pacific and Atlantic Oceans and a 2,000-mile frontier shared with the United States, Mexico has a long history of trade and cooperation with the United States, supported by trade agreements and low labor costs, that have attracted low-skilled US manufacturing to Mexico for decades. But nearshoring is not without risks. Mexico has high inequality and low levels of human capital, and it is susceptible to political crises, populism, corruption, and insecurity, causing acute problems along the border with the United States. Reforms are needed. This public-sourced, partially fictionalized case offers an overview of Mexico’s economic and political history since the 1970s, putting into rich context the opportunities and challenges encountered by a multinational company in 2025. It is taught at Darden in the second half of the Global Economics and Markets (GEM) sequence; it would also be suitable in a module covering long-run potential growth, economic fragilities, and economic crises.