The Mexico-based unit of Wal-Mart Stores Inc. (NYSE: WMT), Wal-Mart de Mexico, announced Wednesday that the company plans to invest $1.3 billion in its logistics operations in the country. The investment is being funded by Walmex, as the unit is known, and the company said the spending is needed for the expansion of Wal-Mart’s business in Mexico.
CEO Guilherme Loureiro is cited at CNBC as saying that the investment will be made over the next three years and would create some 10,000 permanent new jobs in the country.
Wal-Mart wants to double its sales in Mexico by 2024 and that won’t happen unless the company’s logistics infrastructure is up to the task. There are more Wal-Mart stores in Mexico than in any country other than the United States, and the Walmex already employs more than 200,000 workers in the country.
Not so long ago Wal-Mart was defending itself against charges of bribing Mexican officials to increase the pace of permit-granting for new stores. According to a 2012 report in The New York Times:
The Times’s examination reveals that Wal-Mart de Mexico was not the reluctant victim of a corrupt culture that insisted on bribes as the cost of doing business. Nor did it pay bribes merely to speed up routine approvals. Rather, Wal-Mart de Mexico was an aggressive and creative corrupter, offering large payoffs to get what the law otherwise prohibited. It used bribes to subvert democratic governance — public votes, open debates, transparent procedures. It used bribes to circumvent regulatory safeguards that protect Mexican citizens from unsafe construction. It used bribes to outflank rivals.
Some shareholder lawsuits against Wal-Mart already have been dismissed, but others are still pending and both the U.S. and the Mexican governments continue to plod along with open investigations.
Walmex’s Wednesday announcement was made at the official residence of Mexican President Enrique Peña Nieto and was televised live via YouTube. Peña Nieto is clearly hoping for a positive bounce in his approval ratings, something like the good coverage President-Elect Trump got for saving 800 jobs in Indiana.
Economy secretary Ildefonso Guajardo got in a wave to international trade, according to Quartz: “For those who doubt today of what we are capable of achieving with free trade, I invite you to go through one of the aisles at a Wal-Mart.”
Peña Nieto said that the announcement “attests to the confidence” in Mexico.