Latin Trade / December 1994
By Larry Luxner
When American Airlines wanted to boost its business in Mexico, the high-profile company selected 35-year-old Enrique Cruz as its new country director. When Young & Rubicam needed someone to head its Mexico City office, the first recruited seasoned adman Carlos González.
Likewise, Rhone-Poulenc Rorer -- the makers of Maalox -- turned to veteran pharmaceutical executive Michael Abdelnoor for help in cracking Mexico's lucrative drug market.
Though airlines, ad agencies and antacids may not have much in common, Cruz, González and Abdelnoor do: All are bright, bilingual Puerto Ricans. In fact, Mexico City is brimming with Puerto Rican CEOs, general managers and finance directors running the local subsidiaries of more than a dozen Fortune 500 firms, including AT&T, Citibank, Eli Lilly, Honeywell, Kodak, PepsiCo, Pfizer, Schering-Plough and Upjohn.
Almost without exception, Puerto Rican executives arrive in Mexico with a track record, working for the same U.S. corporations that were lured by federal tax incentives to Puerto Rico 20 years ago and are now expanding to Mexico.
"I proved myself to the company after 12 years as a sales manager in Puerto Rico," says 51-year-old Celestino Parrilla-Lugo, an executive with BASF Pinturas, which sells lacquer, enamel and paint to auto manufacturers throughout Mexico.
Michael Abdelnoor, 43, landed his current job as Rorer's vice-president of sales in Mexico after four years with the company in Puerto Rico. "Almost all of us in the pharmaceutical business here were able to build a very successful team in Puerto Rico and the Caribbean," says Abdelnoor, whose Paris-based conglomerate employs 700 workers at its factory just outside of Mexico City and sells $16 million worth of Maalox annually.
AT&T is one of the largest companies in Mexico, with 10,000 employees throughout the country. It is headed by Cuban-born Jorge Escalona, who arrived in San Juan at the age of 9 and joined ITT -- forerunner of the Puerto Rico Telephone Co. -- at the age of 15. Today, Escalona, 44, is one of only four AT&T country presidents, the others being in Great Britain, Japan and China.
Besides their multinational corporate experience, what such managers bring to Mexico are bilingual -- and bicultural -- abilities. Both are essential for business. "Being bilingual is a key issue here," says Abdelnoor. "I either get people who fill the profile and aren't bilingual, or who are bilingual and don't fill the profile."
Other Puerto Rican executives in Mexico City agree that fluency in English and Spanish is important here -- though no less important than having an American education and being thoroughly familiar with American business practices. According to Abdelnoor, Puerto Rican managers seem to possess a "hybrid mentality" that helps them adapt to the many joys -- and frustrations -- of operating in Mexico and doing business with the United States.
Edwin Figueroa, 27, is national sales manager in Mexico for Honeywell, a Minneapolis-based manufacturer of automated residential and office-building control systems. "They picked me because I understand Latin culture, and at the same time, I understand my American bosses and the American way of doing business."
Adds Hector Immanuelli of Ponce, Puerto Rico, who five years ago became chief of Pfizer's pharmaceutical division in Mexico: "I think the fact that we live in two different cultures helps us to adapt to Mexico. The Mexicans, for example, tend to do business with friends, while the Americans are more straightforward."
Not coincidentally, more than half the Puerto Rican executives in Mexico work for major U.S. drug companies. Two factors account for this. The first is Puerto Rico's prominence in the global pharmaceutical industry, thanks to federal tax credits under Section 936 of the U.S. Internal Revenue Code, which has attracted more than 100 drug firms to the Caribbean island.
The second is Mexico's huge market for over-the-counter and prescription medications -- fueled by air pollution, contaminated water and poor living conditions. "Anything for infectious or parasitic diseases is in demand," says Pfizer's Immanuelli.
In fact, fear of AIDS has kept one Puerto Rican executive in Mexico quite busy. Frances Santiago, president and general director of Carter-Wallace S.A., says Mexicans buy $20 million worth of his company's latex condoms annually. "We have 25% of the condom market," says Santiago, 70, who is originally from the Puerto Rican town of Salinas but has spent the last 23 years in Mexico City. "Sexually transmitted diseases have created a big demand for our products."
There's a big demand in Mexico, it seems, for lots of products made by U.S. firms. "Although the Mexicans won't say it openly, they equate quality with American products and services," says Luis A. Diaz Jr., finance director of FMC Electro-Química S.A., a mining and chemicals concern.
Yet Y&R's González, who was promoted to Mexico after successfully heading the firm's Puerto Rico operation, says Mexicans' reluctance to deal with gringos is magnified by the fact that the vast majority of American company managers in Mexico can't speak Spanish. "On the other hand," he says, "It's very easy for us to adapt and be a part of Mexican society. Being Puerto Ricans, they see us more as part of their group [than Americans]."
With NAFTA's lifting U.S.-Mexican trade levels to new heights, the demand will only grow for more bilingual, bicultural Puerto Rican managers. American Airlines, one of the most aggressive U.S. airlines serving Mexico today, had to look no farther than San Juan for its new Mexico country director.
"The opportunity came to work in Mexico," recalls Enrique Cruz, 35. "With all the things going on here, I jumped into it right away." Cruz now heads a team of 388 employees and oversees American's passenger and cargo operations in Mexico.
Francisco J. Uriarte, director of Puerto Rico's newly inaugurated trade office in Mexico City, says one benefit NAFTA will bring to Mexico is U.S. construction and electrical codes. This, he says, will open up further possibilities for Puerto Rican consultants already familiar with such specifications. "It doesn't take much to put a nut and a bolt together," he says. "But now, companies like GM are requesting that their Mexico plants be built to U.S. standards."
While landing a top job with a Fortune 500 firm in Mexico is certainly a promotion, transplanted Puerto Rican executives concede that life in Mexico does take some getting used to. For one thing, the cost of living is at least 25% to 30% higher in Mexico City than in San Juan. And because overseas phone calls are expensive, executives can easily spend $500 a month calling their families back home.
Getting things done is also more of a headache. Uriarte says it took him eight months to get a Mexican credit card. Immanuelli had to wait a year and a half just for personalized checks. And Abdelnoor admits he hates the word ahorita -- which literally means "immediately," but can mean an hour, a day, or even a week when used by Mexicans. "They need pushers, service-oriented people like us," says Honeywell's Figueroa.
Yet for most of the Puerto Ricans in Mexico City, the benefits of relocating to a metropolis of 22 million -- world-renown for its history, archaeology, cultured wealth, restaurants and nightclubs -- outweigh the disadvantages. "For such a big city, crime isn't a big problem," says American's Cruz. "I feel much safer here than in San Juan."