Following years of public support and glad-handing, it appears that former Mexican president Vicente Fox may have lost interest in multinational IT services provider UST Global, and their joint ambitions for Mexico are far from being realized.
“Fox’s motivation to get into this relationship was never really clear, but now – since around a year ago – he doesn’t talk about it at all,” said a source in Mexico, who prefers to remain anonymous due to previous ties to the company.
“When UST Global “hired” Fox to be its promoter the terms of that promotion were never clear. He said he was doing this for Mexico, appearing on TV, radio, and everywhere alongside UST executives, making grandiose claims that they would “change Mexico and the state of Guanajuato”.
Years later, the questions now are did Mexico ever benefit from the relationship? Did those claims ever come to pass? And why did things go quiet?
Way back in 2012, UST Global had designs on the Mexican market, but with no local reputation to speak of the company took on a unique brand awareness strategy: enlisting ex-president Vicente Fox (pictured above, right, with UST Global CEO Sajan Pillai) to ease their landing and leverage local support.
With the help of President Fox, the company made a deal with the government to train 30,000 college graduates and hire 10,000 of them – a substantial goal for a new market entrant. The aim was to bolster Mexico’s offering as a nearshore IT services delivery center, but the country’s universities weren’t graduating enough people to fulfill the contract, so the ambition was never realized.
“They were saying that in five to ten years there would be thousands of people at the company, making outlandish announcements about training young people, and saying that Mexico would be a “powerhouse of IT” because of their agreement with the government,” said our anonymous source.
As Nearshore Americas reported in 2012, UST’s Leon center was projected to have as many as 750 employees by year’s end, but the company’s headcount for the whole country was between 500 and 600 in 2015, as confirmed by Manu Gopinath, Global Head of Human Resources at UST.
Today, the company’s headcount in Mexico is unclear, but a quick LinkedIn search for current UST Global employees in Mexico returns only 207 names. Nearshore Americas reached out to UST Global to confirm the figure, but has not received a reply at time of publishing.
A Close Relationship?
When UST Global first entered Mexico, they forgoed the usual branded operations approach, instead setting up shop at Fox’s ranch, which is now known as Centro Fox – a not-for-profit entity that is focused on developing leadership skills for Mexico and Latin America.
“The company didn’t seem interested in taking off by themselves,” said Guillermo Gonzalez King, Managing Director at AMPROFON and former head of Mexico IT. “I guess they had a pretty good deal with Fox, most likely propelled by his connections in Mexico and paying preferential real estate prices at his ranch. I have no idea why they didn’t consider building a delivery center for themselves back then.”
Today, although Vicente Fox himself is apparently keeping quiet about UST, there are signs that there is still some relationship between them.
The Citek Forum 2017 – held only four months ago on October 3 and 4 in Leon, Guanajuato – was co-organized by UST and Centro Fox. However, when browsing the Citek Forum website for the 2018 edition there isn’t a sign of any UST Global branding anywhere, only that the event is being organized by Centro Fox – pretty odd when you look back at their tradition of double-barreled branding.
A spokesperson at UST Global Mexico denied any bad blood between the two companies.
“UST Global Mexico continues contributing Centro Fox by co-sponsoring Centro Fox’s events such as CITEK and various IT Hackathons that the institution organizes year over year,” said José Rogelio Rocha, VP for Mexico and Latin America at UST Global. “The relationship between UST Global Mexico and Centro Fox remains as strong as it has been for the past five years with no symptoms of weaknesses.”
We have reached out to Centro Fox for comments, but as of yet have received no reply.
Possible Reasons to Go Dark
When an ex-president supports your company’s entry into their country, you’d think that the resulting momentum would only continue upwards, but it doesn’t seem to be the case with UST Global.
“My guess is that they thought Fox had important ties to government, but that guess was grossly miscalculated and he is now part of the opposition,” said our anonymous source. “He doesn’t have any pull in the private industry either, so I don’t really understand what either party had to gain from the relationship. Fox always denied any financial gain, and he was very consistent about it – he always said he “wanted to help Mexico” and stuck to that story.”
The source eluded to the idea that Fox may have been secretly profiting from the partnership, but religiously stated that this was never the case when the question arose.
In regards to Donald Trump, Fox has been nothing short of entertaining, posting numerous videos and tweets slating the US president. Might an American company like UST Global have something to lose by being close to someone so outspoken about Trump’s administration? Quite possibly.
We can speculate, but in the end we may never know why UST Global and Fox failed to achieve their ambitious goals for Mexico, or whether the partnership is still “as strong as ever”.
One thing’s for sure: there’s no value for any company in communicating grand, over-reaching claims of future greatness, even when supported by the full weight of a presidential companion.