We consider our customer and employee safety a top priority at all of our locations. Past events in Mexico have led us to take many additional precautions (detailed below) to ensure the safety of our customers and employees. Mexico’s ‘War on Drugs’ has been the direct cause of the turmoil in Mexico. Several customers have asked us about recent events in Puerto Vallarta and Jalisco. We have not seen any repercussions in Juarez for the recent events in Puerto Vallarta and other locations.
The group generating violence does not have a presence in our region. There is minimal risk of stopping production since recent actions of violence were outside our region. There is also a very low risk of interruption of materials, as our use of raw material from the interior of Mexico is minimal. According to the authorities, 85% of blockades have already been removed, many criminals have been arrested or killed, and this trend will continue.
Safety in Mexico in general, and Juarez in particular, is a topic we treat very seriously. I thought I would summarize our safety procedures in light of recent events.
- KTC has had no safety issues at any of our locations in Juarez or El Paso due to the drug cartels. In fact, the Maquiladora Association (approximately 350 member companies) also reports that there have not been any safety issues at any of its members.
- KTC has not experienced any supply chain disruptions in over 25 years of operating in Juarez. We have had no issues with our trucks supplying raw materials from El Paso to our factories in Juarez nor have we had any issues delivering finished goods from our factories in Juarez to our distribution center in El Paso.
- KTC has been producing goods from the Juarez factories with nearly 100% on time delivery for over 25 years.
- If travel to Juarez is restricted by a customer we offer the capability to perform first article and QA activities in our El Paso distribution center. We previously had one customer in the educational market who took advantage of this. In this case, we simply performed the NPI in Juarez without the customer present and shipped product to El Paso. Once the customer approved the NPI units in El Paso we started volume production in Juarez and the customer never crossed the border or stepped foot in the factory. The customer found this to be just as smooth as if they were in the factory.
- In the past, the vast majority of people injured or killed were either gang members, affiliates, family of gang members, police or Mexican military. The press makes it sound like a lot of innocent people are killed, when in actuality the local population knows that the vast majority of people that are hurt or killed are affiliated with gangs in some way or another, or fighting the gangs.
- El Paso is actually one of the safest cities in the US. El Paso has one of the highest concentrations of law enforcement personnel compared to other cities in the US
- Having said all that, Keytronic is taking a proactive stance in regards to safety. Below is a list of the many precautions we have implemented over the past few years.
- High resolution security cameras have been installed in all facilities. There are multiple cameras in each facility that monitor the complete perimeter of the buildings, as well as the interior.
- We have installed GPS tracking systems, with ‘panic alarms’ in all KTC vehicles and trucks. All vehicles are monitored for their location. With this system you can actually zoom in on the vehicle.
- We have sent all of our drivers and senior management team to a defensive/evasive driving class. This class was conducted by a company (Ogara Group) that provides this same type of training and security to the US government. This training was hands on and very in depth.
- The training/security group has mapped out ‘safe routes’ and ’emergency routes’ that are used by our drivers. They have also identified ‘keep out’ zones.
- All visitors are escorted by our drivers to and from our factories and El Paso.
- Additional security guards have been added to all facilities.
- Additional fencing with razor wire has been added to all facilities.
- Additional lighting has been added to each facility and parking lot.
- We have a “panic alarm” in each facility that links directly with the police in case of any forced entry.
- We have hired a new security manager who has extensive security experience and background.
- Our standard policy is that Spokane employees and all visitors must leave the factory in time to arrive back in to El Paso during daylight hours. Visitors and Spokane employees are not allowed to be in the factory after dark.
- We routinely have extra vehicles escort our customers in and out of Mexico. These escort vehicles are in front of and behind the main transport vehicles and are not visible to our visitors or passengers.
- We do have the ability to stay beyond dark in the Mexican facilities, if required. If we desire to stay late, this must be approved by Spokane management. In this case, extra security is provided in the facility and during travel.
As you can tell, we take the security of our customers and our personnel very seriously. We have implemented all of the precautions we think are necessary to ensure that every visitor to one of our Mexico facilities is safe from harm.
Our experience shows that assurance of supply has not been the slightest issue, and we do not expect it to be a problem in the future.
We continue to win new programs from large corporations in Juarez. These new programs come from customers already doing business with us in Juarez, and from customers who are new to Keytronic and Juarez. If you would like to speak with any of these customers, let me know and I can arrange a discussion for you. If you have any further questions regarding security or the precautions we are taking, please feel free to contact me.
Thanks,
Brett Larsen
President and CEO