Reynosa,Mexico: Industrial Powerhouse and Victim of Cartel Violence

Reynosa, MX is the largest city in the State of Tamaulipas. Directly across from Hidalgo, TX, Reynosa is home to the manufacturing operations of several FORTUNE 500 companies from all over the world. The city of almost 1 million has 10 industrial parks and a growing commercial and service sector. Many U.S.-based retailers such as Home Depot, HEB supermarkets and Lowe’s have a presence in Reynosa. Reynosa is home to four universities, one technical institute that partners with McAllen-based South Texas College, and six technical training centers.

As we covered in Doing Business in Reynosa, the greater McAllen and Reynosa metropolitan area is a massive manufacturing economy.

Map of Reynosa/Nuevo Laredo Border Area

 

Map of Reynosa Industrial Parks and Cross Border Bridges

 

There are over 410 Maquiladoras or factories operating in Reynosa.  These factories employ over 125,000 skilled and semi-skilled workers and contribute to the economic survival of several hundred thousand families.  US businesses enjoy tax advantaged operations and high quality finished components that are imported back into the United States for final production.

Strong Business in a Tough Neighborhood

There are two major players in the drug game in Tamaulipas state, the Gulf Cartel and the Zetas.  The long slow decline of the Gulf Cartel and subsequent rise of competitors in Northeastern Mexico has been the cause of most crime in the last two years.  The Gulf cartel birthed the Zetas into existence as their enforcers in 1999 when the Gulf cartel was involved in a nasty turfwar over leadership of the cartel.  The Zetas began with 30 or so deserters from the Mexican Army’s Special Forces who started as personal bodyguards of the Gulf cartel boss, Osiel Cárdenas Guillén.  Over time the Zetas morphed into the heavy muscle for the entire cartel, eventually overpowering the Gulf Cartel and starting a war for supremacy of N.E. Mexico.

On the surface, the situation in Mexico’s northeast is unchanged for most of the past decade: Both the Gulf Cartel and the Zetas maintain significant control over different parts of the border state of Tamaulipas, but neither cartel is strong enough to destroy the other. Government forces, particularly the marines, have maintained a considerable amount pressure on crime groups operating in Tamaulipas, but it isn’t enough to tamp them out. Further complicating matters, other groups like the Cartel of the Northeast, an offshoot of the Zetas are also vying for control.

Tamaulipas is the definition of the rubber meeting the road in the drug game.  Reynosa and Nuevo Laredo are two of the most active border crossings between Mexico and the U.S.  A kilo of cocaine can be purchased in Mexico for $9-11K and sold in the U.S. for $24-27K just from crossing the border.  This represents the single largest price increase along the entire chain of importation at the wholesale level.  These profits fuel the violence.  The violence fuels more profits as rates to smuggle go up in the chaos.  The Mexican people suffer…and they suffer greatly.  

 

Car lot in Reynosa where shot up and burned out cars from cartel violence are held.

 

The federal government of Mexico has aggressively attacked the cartels in N.E. Mexico militarily and judicially.  The government efforts, in addition to the above mentioned inter-cartel wars, has left an unorganized mess of different cells aligned with the two cartels dispersed around Tamaulipas. According to a May report from Milenio, seven cells of the Gulf Cartel are fighting three Zetas cells for dominance in the state. There are even reports of some of these Gulf Cartel cells fighting each other.  This makes for a highly volatile situation that lacks the typical “borders” that much of the cartel violence has established over the years.

 

Can I do Business in Reynosa?   

The answer to this question one must ask themselves a few questions and do some critical thinking about what counter measures they are willing and able to employ to reduce the threat of doing business in Reynosa. 

  • -Am I willing to alter my typical travel patterns to do business in Tamaulipas?
  • -Will my employer provide me with the ability to ensure a safe and effective business trip?
  • -Do I have a vendor-partner that can assist me in my travels?
  • -If I am a consultant, what provisions for security can I charge back to my client?
  • -What is the opinion of local security professionals about my trip?

Luckily, American business people are not the targets of the violence in Reynosa or Tamaulipas in general.  Actually the reality is quite the contrary.  Crime against American citizens is frowned upon and brings too much scrutiny from law enforcement and the U.S. government.

The modern day Mexican drug boss is not a mad man high on cocaine and hell-bent on violence. Instead, they are incredibly sophisticated executives, pursuing profit by the least expensive and most efficient means possible.  The actual “sicarios” or shooters of the cartels have orders and shooting Americans is not high on that list.  With that said, crimes of opportunity happen and getting caught in the crossfire between two warring groups is a clear and present threat that must be accounted for.

Ending up in the wrong part of town or being in the right part of town at the wrong time can have serious consequences.  Knowing what is happening on the ground, keeping tabs on social media and following the lead by locals are all necessary to ensure safe passage to and from business meetings, consulting engagements and site visits.  Luckily all of those tasks can be provided by trusted and vetted secure transportation partners.  These companies exist to enable the safe and successful transaction of business across the border and back.  Most business travelers will stay on the Texas side of the border and will travel to and from their respective meeting location each day.  With the correct protocols and safeguards in place the majority of the risk of doing business in Tamaulipas can be mitigated.