Richard Heckmann, U.S. Filter's CEO, realized early on that alliances with trustworthy Mexican partners provided the answer to many problems and to achieving the interdependent goals of both countries and their firms. He knew, for example, that the political reality was that Mexican officials would favor their ties to Mexican firms and steer bids to those companies. So he contracted with a Mexican construction company, Plar SA, with strong political connections. Plar SA benefits from the deal by getting technical and financial help from U.S. Filter to upgrade its technology. Also, in order to reach his smaller potential customers, Mr. Heckmann has formed a joint venture with Enrique Anhalt, a local Mexico City water- purification supplier to 250 manufacturers and other customers with small systems, assuming that when they upgrade they will turn to a local supplier.
The environmental cleanup efforts in Mexico clearly exhibit the interdependence of NAFTA and will benefit everyone in the long run. Funding from the United States is helping with projects such as the sewage-treatment plants at 11 cities south of the border. In turn, that business is going to many U.S. environmental-services companies, such as San Diego Gas & Electric Co., which is building natural gas pipelines to Mexicali and Tijuana to supply clean fuel to industrial plants.
The autoindustry is another agent of massive change in Mexico-building an industrial base south of the border that will help strengthen the Mexican economy. The auto industry has the unusual abifity to.jump start a middle class, according to David Cole, director of the University of Michigan's automotive-studies office.67 While the average Ford worker in Hermosillo still earns considerably less than his counterpart in Wayne, Michigan, that wage does represent a considerable increase for Mexican workers. In addition, every new auto plant in Mexico trains thousands of Mexicans, most of them new to factory work. While those factors don't console auto workers in the United States who have lost their jobs, it does mean that American auto manufacturers can be more globally competitive.
There is likely to be increasing interdependence among the Americas in the future as agreements open up further trade with other South American countries such as Chile and Brazil. These countries are tearing down their internal trade barriers also, in a wave that may eventually form a free-trade zone from Alaska to Tierra del Fuego. South Americans are realizing that they may get left out in the cold as both the European Community and North America form their own huge markets. As noted by Mr. Grisetti, an Argentine businessman, If the world is dividing into blocs, we have to form a bloc or disappear... it's a necessity.
Interdependence: South-North Strategic Alliances : Managing Interdependence article from Global Management Catagory Interdependence: South-North Strategic Alliances
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