Enron-failed company
Enron Corporation is an energy cmopany that is based in HoustonTexas and was the 7th largest company
in the United States. It employed close to 21,000 and was the world’s leading electricity, natural gas and communications company and had revenues exceeding $101 billion in 2000. But what was once such a successful company ended up filing for bankruptcy in late-2001. Though the long-term implications of Enron’s collapse are somewhat unclear, a part of the reason is due to their
international operations.
Enron’s international reputation was questioned by persistent rumours of constant bribery as well as political pressure to secure their contracts in Central/ South America, Africa and in the Philippines. A specific international failure has to do with its investments in Argentina. Back in 1988, George W. Bust went to Argentina as an Enron lobbyist and helped push through the
privatization of Argentina’s publicly owned energy complex.
George Bush had ties to Carlos Saul Menem because their family had heavily invested in Argentina and when he was elected president of Argentina, the completely embraced Enron’s privatization and deregulation policies. Then in 1996, Enron and its subsidiary company, Enron Global Power and Pipelines bought a controlling interest which was the owner of a 4,104 mile natural gas pipeline system in Argentina which was the largest in South America. Eventually Enron spread throughout the rest of South America.
Enron kept pushing privatization because had an underlying purpose of taking over all these pipelines, pumping stations and other facilities that had been constructed at taxpayers’ expense. In 1998 Enron was grated the first power marketer license in Argentina which permitted them to buy and sell electricity which was an important step in Enron’s strategic efforts to establish marketing operations in Latin America and to future their hold in the Southern energy markets. Then in early 2000, Argentina’s energy regulatory agency pleaded with Enron to postpone a rate increased which was largely responsible for the fragile and depressed Argentine economy. The economy plunged deeper into recession and 80% of Argentines fell below the poverty line. Enron was to blame for the economic collapse of Argentina with over $141 billion in unpayable foreign debt and five governments falling in a single week eventually this also lead to the demise of Enron.