Industry Reconfigures Through Trade Openness: 6 Out of 10 Companies Choose Reconversion Over Closure

According to official records from the Superintendencia de Riesgos del Trabajo (SRT) processed by research centers such as Fundar and CEPA, from Javier Milei's assumption of office in November 2023 through July 2026, 32,290 companies ceased operations or stopped formally registering workers in Argentina (representing a decline of 6.3% of the productive base). However, other companies sought to adapt to the new macroeconomic model and import pressures.

According to a private survey of 314 corporate movements in sectors exposed to external competition, closure is not the dominant response of Argentine industry to trade openness. The Midas Consulting report identified 276 determinations in activities directly affected by imports. Of that total, 59.1% corresponds to adaptation, defense, or reconfiguration, while 35.5% relates to reduction or exit. The remaining 5.4% groups cases of market entry or supply expansion.

Behind these decisions lies a concrete figure. Of the 276 recorded, 84 involve investment or identifiable capital deployment. In 48 of these, the amount was publicly disclosed, and together they total at least USD 9,298 million equivalent. The highest concentration is found in the defend/invest category, with USD 5,258 million, followed by transform where it competes with USD 2,785 million and transform how it competes with USD 1,242 million.

The report distinguishes six strategic responses among surveyed companies, far from the dichotomy between staying or leaving. The most frequent is "transform how it competes," accounting for 78 decisions (28.3%) and including changes in sourcing, portfolio, technology, service, or channel. This is followed by "reduce exposure," with 68 cases (24.6%), where firms reduce capacity or substitute product lines without abandoning the entire activity. In third place is "defend/invest," with 53 movements (19.2%), aimed at increasing scale, productivity, or differentiation. Complete exit from an activity represents 10.9% of the total, with 30 recorded decisions.

The sector that exposes the clearest contrast between opposing strategies

The case of household appliances functions, according to the study, as a laboratory for divergence. Electrolux ended up closing its Rosario plant and shifted toward a global supply model, though it maintained brands, sales, warranty, service, and spare parts in the country. Its sequence was staggered according to the survey: first it invested in efficiency, then reduced activity, substituted categories with supply from other factories, and finally abandoned local production.

Longvie followed a different path. It combined investment, plant specialization, and complemented its portfolio with imported products. Mabe/Drean, meanwhile, sustained domestic manufacturing, allocated capital to operational improvements, and added product imports, in what the report describes as a hybrid model. Outside the sector, Mirgor invested USD 120 million in its Zárate plant to produce tires and export them to Brazil.

The consultant proposes three hypotheses to understand what sets one path apart from another. The first is cost and scale: productivity, volume, plant utilization, logistics, financing, and taxes determine how much it costs to sustain a local activity. When utilization declines, volume loss can amplify the gap versus imported product; when investment alters that equation, modernizing becomes more viable than abandoning.

The second hypothesis points to the existence of a real external alternative. A multinational with multiple plants can reassign production without withdrawing from the Argentine market. A local company can develop suppliers abroad. The more substitutable a capacity, the more feasible it is to regionalize; the more specific, the greater the cost of replacing it.

The third factor involves capabilities that still generate value. Service, engineering, speed, customization, brand, customer knowledge, or an export platform can justify retaining and even deepening local production. The report's central hypothesis is that companies are not deciding "Argentina yes or no," but rather evaluating capacity by capacity what to keep, what to transform, and what to source globally.

To reduce the risk that results depend only on contextually-linked cases, Midas repeated the analysis on 184 movements where the source explicitly connects the decision to imports, international sourcing, or cross-border capacity. There, 102 decisions (55.4%) are adaptation, defense, or reconfiguration, 69 (37.5%) reduction or exit, and 13 (7.1%) entry or expansion. The report itself acknowledges the multiple causes behind each movement: demand, capacity utilization, costs, technology, financial situation, and global decisions can act simultaneously.

Reconversion is not an option for all sectors

The adaptation pattern described by Midas Consulting, however, does not replicate across the entire industry. The report surveys decisions by companies that, in many cases, have scale, export capacity, brand differentiation, or access to global supply. Those conditions are not available to all sectors.

Footwear and textiles are two examples where reconversion finds concrete limits. According to data from the Centro de Estudios Económicos Bonaerense (CEEB) of the Unión Industrial de la Provincia de Buenos Aires (UIPBA), footwear production has accumulated a 38.8% decline between the first half of 2026 and the same period of 2023, the worst across all industry. Textiles declined 34% over the same period. Both sectors share a similar profile, with predominantly small and medium-sized enterprises, low export capacity, and direct competition from cheaper imported product.

In Buenos Aires province, which concentrates more than half of national footwear production, the sector lost 4,188 jobs and closed 147 factories between May 2023 and May 2026, according to the same survey. Athletic footwear lost 76.1% of its provincial employment during that period, while the textile and apparel segment accumulated over 13,000 fewer jobs in the province.

A detail from the UIPBA report provides additional nuance. Between May 2025 and May 2026, while footwear imports fell 31.3%, the sector lost 3,273 jobs and 146 plants closed. The retreat of foreign product did not translate into more local activity; what declined, according to the survey, was consumption. The phenomenon suggests that in these sectors the threat stems not only from imports but from internal demand contraction that limits reconversion strategies.

Source: Infobae