How Oil, Labor, and Government Mix in Mexico

While Pemex has all the appearances of a real business, at least from the looks of its gleaming high-rise headquarters in Mexico City, the reality is that it isn’t permitted to behave like one. Aside from paying heavy tribute to the government, the company doesn’t have the freedom to hire and fire at will. Indeed, it often finds itself, thanks to union and government pressure, paying employees for doing little or nothing. Example: At the Pemex ammonia processing plant in Ciudad Camargo, closed for a half-dozen years, paid workers still show up, waiting for something to do. The concept of productivity doesn’t seem to register. Worse yet, Mexico’s Finance Ministry has the authority to set Pemex’s prices, budgets and debt levels.
-by Carl Horowitz