The Wall Street Journal - 16.03.2020

(Ben Green) #1

A2| Monday, March 16, 2020 THE WALL STREET JOURNAL.



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Letter From the Editor

To Our Readers:
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Carnival Corp.’s Grand
Princess was ordered back to
San Francisco after a passen-
ger on a previous voyage died
from the coronavirus. A Busi-
ness & Finance article on
March 5 about the coronavi-
rus’s impact on the cruise in-
dustry incorrectly referred to it
as a Diamond Princess cruise.

Microsoft Corp.shares fell
2.0% from the start of March
through Friday. An Exchange
article on Saturday about sec-
correctly said the stock had
fallen 1.7%.



Readers can alert The Wall Street
Journal to any errors in news articles
by [email protected]
by calling 888-410-2667.

Once Geomelt is mixed with
brine or road salt and applied
to roads, he said, it becomes
so diluted that he doesn’t
think anyone would smell it.
Chad Collins, head grounds-
keeper at the Brockport cam-
pus, part of the State Univer-
sity of New York, said the
beet-juice product he has been
using over the past couple of
winters has “an earthy smell
to it, almost like a compost.”
He had heard about com-
plaints over the smell, but “to
me, it’s not hugely horrible.”
The sugars and organic ma-
terials in the beet juice soften
the ice, allowing the salt to
work faster and at lower tem-
peratures. The mix uses a by-
product from sugar-beet pro-
cessing that can be mixed with
regular salt brine. It can also
be sprayed on rock salt to
make it stickier and less likely
to bounce in the gutter.
What works well on roads
isn’t welcome in the halls of
academia. Jesse Fox, an asso-
ciate communications profes-
sor at Ohio State University,
was puzzled by the smell in
the halls on campus several
years ago. “I have been told
the nasty foot cheese smell in
#OSU buildings is from beet
juice, which is used in the de-
icer. Blech,” she tweeted in
Ohio State has stopped us-

cities have tried beer-brewing
byproducts and pickle brine.
Xianming Shi is developing
a de-icer with fermented Con-
cord grape skins. The associ-
ate professor at Washington
State University, and director
of the National Center for
Transportation Infrastructure
Durability & Life-Extension,
claims the skins work better
than beets.
A few years ago, third-grad-
ers in Glen Ellyn, Ill., noticed
the patch of dead grass where
a heavily salted road bounds
the school. The children de-
cided to study the alternatives
to rock salt, said Kayla
Wheeler, who coached them
on using critical-thinking skills
to solve real-world problems.
One group of kids backed
beet juice as an environmen-
tally friendly way to use less
rock salt. Ms. Wheeler ar-
ranged for experts, including
snowplow drivers, to talk to
the students. The drivers ad-
mitted they are likely the rea-
son school doesn’t get can-
celed on some snowy days.
The children booed. One group
of experts brought in baby-
food-size containers of beet
juice for the students to check
out. “They were pretty struck
by the awful smell,” Ms.
Wheeler said.
—Elisa Cho contributed to
this article.

ing beet juice on sidewalks
and near busy campus spots,
said Paul Walsh, assistant di-
rector of landscape services.
“We try to keep it away from
the food places because that’s
something you don’t want to
smell,” he said. Ohio State has
moved to online classes be-
cause of coronavirus concerns.
Paul Laker, who lives in the
Chicago suburbs, said he ru-
ined several shirts while work-
ing on a road crew applying a
beet-juice mix to roads in the
Village of Streamwood, Ill. “If
it did come in contact with
your skin or your clothes you
would get stained purple,” he
said. “It had kind of a strong
vinegar-type smell.”
Denver Preston, general
sales manager of winter prod-
ucts at K-Tech Specialty Coat-

ings Inc. in Ashley, Ind., dis-
tributed a beet-juice de-icer
for a few years starting in

  1. He faced the same issue:
    Complaints and not just the
    smell. Some batches of beet
    juice clogged spreaders and
    “If you’re a snow fighter
    and you’re out battling a
    storm,” he said, “the last thing
    you want is your gun to jam
    up.” The company didn’t give
    up its quest. They found beet
    molasses, which has a higher
    sugar content and more con-
    sistency. The mixture, sold as
    Beet Heet, still smells, he said,
    but not as bad.
    Cities in Wisconsin have
    also tried cheese brine, a left-
    over from cheese-making, to
    keep ice off roads. Turns out it
    is free in the dairy state. Other

THE OUTLOOK|By Robbie Whelan and Santiago Pérez

Mexico Has Yet to Capitalize

On New U.S. Trade Opening


ith global supply
chains in disarray
amid the U.S.-
China trade war and the
coronavirus pandemic, Mex-
ico might seem a logical
winner if U.S. companies de-
cide they want to diversify
away from China and make
some products closer to
Mexico clinched a new
trade deal with the U.S. and
Canada last year and has
now replaced China as the
U.S.’s largest single trading
“These trade frictions be-
tween the U.S. and China
and the coronavirus should
definitely be a godsend to
Mexico,” said Alberto Ra-
mos, chief Latin America
economist at Goldman
Sachs Group Inc. “Mexico
would be extremely well po-
sitioned to capture part of
that trade.”
While Mexico might ben-
efit in the long run, there
are plenty of reasons to be
cautious about predicting a
flood of companies heading
there. For starters, the data
doesn’t suggest Mexico is
enjoying an investment
Foreign direct investment
in Mexico fell 5.2% last year
compared with 2018, ac-
cording to preliminary gov-
ernment figures, while the
economy shrank by 0.1% in

  1. Mexico’s exports to
    the U.S. have grown mod-
    estly over the past year and
    a half, far slower than those
    from countries like Vietnam.
    Supply-chain experts
    point to several factors. De-
    spite the new U.S.-Mexico-
    Canada trade deal, the
    Trump administration could
    upend trade relations at any
    Adding to the uncertainty
    are the economic policies of
    Mexico’s nationalist Presi-
    dent Andrés Manuel López
    Obrador and increasing vio-

lence that has turned parts
of the country into no-go
“I don’t think trade rela-
tions are sufficiently settled
to boost long-term invest-
ment in Mexico as a hub,”
said Gustavo Rangel, chief
Latin America economist at
ING Financial Markets.
“Clearly China is a riskier
bet, but it’s unclear to what
extent that benefited Mex-
Apart from a jump in au-
tomotive exports in 2018,
Mexico’s manufactured ex-
ports haven’t responded to
the U.S.-China trade ten-
sions with the expected
surge, according to econo-
mist Brad Setser, a senior
fellow at the Council on
Foreign Relations.


eantime, annual
growth in U.S. im-
ports of manufac-
tured goods from Vietnam
jumped to more than 40% in
early 2019, and remained
above 30% through the end
of the year, according to
Census Bureau data.
Monthly U.S. imports of
manufactures from Mexico
grew around 10% a month
in early 2019 but were fall-
ing at the end of the year,
while U.S. import growth
from China contracted
sharply all year.
A big reason manufactur-
ing might be sticking in
Asia rather than relocating
is that supply chains in in-
dustries like electronics are
deeply entrenched, and
Mexico lacks a deep supply
chain in areas outside the
automotive sector, Mr. Set-
ser said. Overall costs in
Asia are also still low.
Mexico, however, could
still benefit over the longer
Manufacturing wages in
Mexico are lower than in
China, and the country isn’t
only next door to the U.S.,

but also shares cultural ties
and similar time zones with
U.S. firms.
In January, Jose Luis Ber-
nal, Mexico’s ambassador to
China, said that at least
three Chinese auto firms,
including car maker Chan-
gan, electric-car manufac-
turer BYD and assembly and
auto parts firm JAC Motors,
planned to begin or expand
production in Mexico in the
next year. And last year,

sports-camera maker GoPro
Inc. moved most production
of its U.S.-bound cameras
from China to the Mexican
city of Guadalajara.
Mr. López Obrador’s poli-
cies are also undermining
Mexico’s foreign-investment
potential, observers say. In
his first year in office, he
canceled the country’s big-
gest public-works project, a
partially built Mexico City
airport, and halted any new
oil auctions for private oil

The latest private-sector
casualty could be Constella-
tion Brands Inc., which
brews Mexico’s Corona beer
for U.S. drinkers. The López
Obrador administration is
organizing a referendum on
March 21 in the border city
of Mexicali to decide
whether the beer maker,
one of Mexico’s largest for-
eign investors, can complete
construction of a $1.4 bil-
lion plant, after community
groups raised objections
about its intensive water
consumption. The cancella-
tion of such a large-scale
project would send a wrong
signal to foreign investors,
executives say.


exico’s lagging for-
eign investment is a
long-term trend.
Foreign direct investment
averaged 1.6% of Mexico’s
gross domestic product
over the past decade, com-
pared with an average of
2.2% of GDP from 1995 to
2007, estimates Sergi
Lanau, deputy chief econo-
mist at the Institute of In-
ternational Finance in
Washington, D.C.
Out-of-control criminal
violence doesn’t help. Last
year was the bloodiest in
Mexico’s recent history,
with 35,588 people mur-
dered, according to govern-
ment estimates.
In 2018, the American
Chamber of Mexico, an as-
sociation of business
groups, polled 415 of its
members on security issues
and found that 25% of them
believed their businesses
were less safe than the pre-
vious year. Of those, 71% at-
tributed the decline in secu-
rity to the rise of organized
crime. More than 14% of
businesses questioned said
they had suspended opera-
tions in certain Mexican
states because of rising vio-

Source: Census Bureau

2014 ’15 ’16 ’17 ’18 ’




$600 billion

Mexico Vietnam China


Investors and economists this
week will focus on economic
fallout from the novel coronavi-
rus pandemic.
Tuesday.The U.S.retail sales
reportfor February will show
how household spending was
holding up before the coronavi-
rus started to have much of an
impact on consumer sentiment
or behavior. If anything, the lat-
est data could reflect some
front-loaded spending amid un-
certainty about the virus.
U.S.industrial production
sputtered at the start of the year.
February data will show if the
sector remained on shaky ground
just as supply chains started to
feel the effects of the virus.
Wednesday.TheFederal Re-
serveslashed its benchmark in-

terest rate to near zero on Sun-
day and said it would buy
Treasurys and mortgage-backed
securities in an urgent bid to
prevent market disruptions, pre-
empting action that the central
bank had been expected to take
on Wednesday.
Thursday.TheBank of
Japanreleases a policy state-
ment. It may be hesitant to join
the Fed and other central banks
in cutting rates because its tar-
get is already below zero. It
might instead focus on support-
ing companies affected by the
Friday. U.S.existing-home
salesfor February are expected
to rise, helped along by low in-
terest rates and steady job cre-

brine and beet juice to keep
off ice. Throngs of students
would then track in the mix on
their shoes to an unventilated
staircase where a particular
smell concentrates.
“I wouldn’t want to be
quoted as saying it smells like
vomit, but it’s sort of heading
in that direction,” Prof. LeSuer
said. “It’s strong and pun-
gent.” (The school is switching
to online classes as a corona-
virus precaution.)
Rock salt has long reigned
as the deicing king. But the
snowmelt often drains to riv-
ers where the saltwater mix
hurts fish and plants. Scien-
tists and some road crews
have turned to a buffet of ag-
ricultural products to cut
down on rock-salt use. The
mixtures melt snow with less
rock salt.
Variations of the beet-juice
recipe are widely used across
the Midwest and surrounding
snowbelt. Many people agree
it works but smells godawful.
“Kind of like rotting ap-
ples,” said Bryan Pickworth,
maintenance supervisor with
the public services department
in Farmington Hills, Mich. The
city has mixed road salt with
beet juice for about 14 years.
Mr. Pickworth said resi-
dents occasionally complain
about the smell when their car
tracks beet goop into the ga-
rage. When the city treats
neighborhood roads, he said,
it adds odor neutralizers like
those used in waste treatment
plants. Scents include citrus as
well as pine and eucalyptus.
Producers sniff at com-
plaints. “Odor is a perception,”
said Mike Bellovics, owner of
SNI Solutions Inc. in Geneseo,
Ill., which makes a sugar-beet-
based product called Geomelt.
“When you take an open vat of
Geomelt 55, to me it smells
like burnt coffee. Some people
think it smells like bovine ex-


Beet Juice

Mix Hits

The Roads

Mexico’s exports to
the U.S. have grown
far more slowly than
those from Vietnam.

A department of public services truck in Farmington Hills, Mich., drops a mix of 80% salt brine and 20% beet juice; below, de-icers on tap.

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