SHOOTOUT NEAR SCHOOL SHOCKS MEXICO

MEXICO CITY-Two security guards working for Mexican beverage giant
Femsa SAB de CV were buried Sunday after their deaths at the hands of
presumed drug gunmen. The men had been involved in a shootout in front
of a prestigious school in Monterrey, further stoking fears among
Mexico's elite that no area of the country is safe.

The gunfight occurred early Friday afternoon in front of the American
School Foundation, the school of choice for the children of many of
Monterrey's top businessmen as well as the children of Americans
working in the city.

Femsa said Friday that three of its security guards who had been
patrolling the area were wounded while repelling an attack by an armed
group. A day later, however, the company said in a news release that
two guards had died. Four guards who had disappeared during the
gunfight turned up safely Saturday morning, Femsa said.

Friday's gunbattle is the latest sign that Mexico's drug violence is
spreading to wealthier areas of the country which had long thought
themselves immune, and has deepened the fear that has gripped
Monterrey in the last few months. Warring drug cartels have turned
Mexico's industrial capital into a battleground as the Zetas, a
violent drug cartel, have fought the Gulf and Sinaloa cartels for
control of drug routes to the U.S. and a flourishing local drug market.

A gunbattle Saturday between Mexican police and gunmen in Ciudad
Juarez-which borders on El Paso, Texas-led El Paso police to close a
city street along the U.S.-Mexico border for 30 minutes. One gunman
was killed and three Ciudad Juarez police were injured in the
shootout. It marked the first time that a street in El Paso had been
closed because of shooting in Ciudad Juarez, which has become the most
violent city in Mexico as a result of the war between the cartels.

The shootout in Monterrey was the culmination of a week of violence
that began with the kidnapping and killing of the mayor of Santiago, a
tourist town a few miles from Monterrey that is a favored weekend
getaway for the city's businessmen.

"We are totally shocked by and indignant about these events," said
Femsa in its statement Saturday.

Last week, business leaders in Monterrey took out full-page ads in
Mexican newspapers begging President Felipe Calderon to send more
troops and police to deal with the violence that has engulfed what was
once one of Mexico's safest cities. Monterrey is home to corporations
such as Femsa and cement maker Cemex SAB, as well as the Mexican units
of many U.S. companies.

Some 28,000 people are estimated to have died in violence in Mexico
since 2006, when President Calderon sent out the army to contain
Mexico's powerful drug barons. According to Reforma, a respected
Mexican newspaper, there have been 420 drug-related killings in Nuevo
Leon state thus far this year, up from 56 in all of 2009. Monterrey is
the state capital.

One parent with children at the American school said in an email
Sunday that many Mexicans are considering moving or sending their
older children to study in the U.S. "Many families that have children
in high school or college are sending them to study abroad," he wrote.
"The speed of change of the worsening of the situation is
staggering."

The American School didn't immediately respond to an email seeking
comment.

On Saturday, the school sent a memo to parents enumerating steps they
should take to reassure their children, including spending more time
with them, discussing the event with them, reassuring them that the
school is safe and limiting the time that children, especially small
ones, spend watching television coverage of the incident. "If your
child does not want to return to school, seek help from their teacher
or a psychologist," wrote Sonia Keller, the elementary school principal.

Femsa provided few details of the incident. Its statement Saturday
said two guards had been killed at the scene of the shooting at the
American School Foundation on Friday, and that four others had
disappeared, until they reappeared at company headquarters Saturday
morning.

But the Reforma newspaper said the four guards who "disappeared" had
actually been kidnapped by gunmen, who also picked up the bodies of
the two guards. The four guards turned up in a car with the bodies of
the two dead guards in the trunk in front of a company building
Saturday morning, according to Reforma.

A spokeswoman for Femsa declined to give further details of the
incident, and declined to comment on Reforma's account of the events.

The gunbattle erupted Friday afternoon when Femsa security guards who
patrol the area around the school apparently got into a dispute with a
group of armed men who were driving in front of the school. "They
exchanged words and afterwards there was a firefight," said a Mexican
official. Both the official and the Femsa spokeswoman said reports
that swept Monterrey that the Femsa guards had tried to foil a
kidnapping attempt at the school weren't true. "There was no
kidnapping attempt," the Femsa spokeswoman said.