MEXICO CITY - A MEXICAN AFFILIATE of U.S.-based Kirkwood Industries has terminated as many as three- fifths of some 240 workers at its electrical component plant in Mexico City since March 1995, replacing them with workers supplied by a union of the company's choosing. Sacked workers say they were fired for trying to form an independent labor union that would represent their interests rather than those of Kirkwood.
During the six decades that the Institutional Revolutionary Party (PRI) has ruled Mexico, the government has tightly controlled the country's major labor unions such as the huge Confederation of Mexican Workers (CTM). Repeatedly during the administrations of Carlos Salinas de Gortari and his successor, current president Ernesto Zedillo, CTM leader Fidel Velásquez, who emerged as a union leader in the 1930s, has embraced government economic pacts that have been devastating for workers. The pacts endorsed by Velásquez, now 95, have driven down workers' real wages as the cost of basic necessities has soared. A recent study by the Institute of American Union Studies found that in the last 12 years real Mexican wages have suffered their worst decline in modern history, with worker buying power falling to one-third of its 1982 level.
Workers throughout Mexico have tried to organize unions that actually will represent their interests. Under the terms of the labor side agreement of the North American Free Trade Agreement (NAFTA), a few of these efforts have gained some international attention. Recent complaints filed with the NAFTA-created National Administrative Office (NAO) have charged Sony, Honeywell and General Electric with illegally interfering with the rights of workers in maquiladora border assembly plants to freely associate and organize (see Social Dumping' in Mexico Under NAFTA," Multinational Monitor, April 1995 ). At best, however, the toothless NAO's only power in NAFTA countries is that of moral suasion.
Independent-minded workers
Kirkwood's labor problems began in late 1994. Kirkwood workers, most of whom are women, complained that the plant's lunch room and toilets were filthy. Another complaint they made was that plant security guards, who frisk employees at the plant gates, and an engineer, Juan Sebastian San Vicente, sexually harassed some women workers. In addition to these charges, some workers - most of whom have since been fired - had a more fundamental demand: an independent union.
"We had a union [a CTM affiliate] but it was only concerned with the welfare of the firm," says Ernesto Alfonso Recanco, a sacked Kirkwood lathe operator who leads the workers seeking independent union representation. "The workers here have not had any ... representation during the 18 to 20 years since this plant opened here."
Under Mexico's labor law, workers have the right to form unions, change unions or switch union leadership. The catch is that Mexican authorities must approve any such changes and companies employ coercive tactics to prevent departures from compliant union representation. Labor authorities have used their approval powers to promote unions aligned with the government and business. And businesses have intimidated, fired and bribed workers and threatened to close plants if an independent union prevails.
Kirkwood workers say that when they began to assert their independence, the CTM affiliate withdrew and was replaced by another union, the Confederation of Workers and Peasants of the State of Mexico (COCEM), which also has close ties to the ruling PRI. Expelled Kirkwood workers and the independent Authentic Labor Front (known by its Spanish acronym, FAT) say the COCEM is infamous for its strong-arm tactics in helping companies break up independent union initiatives.
Benedicto Martínez Orozco is one of three top FAT leaders and the secretary general of STIMAHCS, the FAT-affiliated metal workers union that is seeking to represent Kirkwood workers. Martínez says that the day Kirkwood fired Recanco, 15 COCEM thugs and armed police officers loaded Recanco into a car and took him to a restaurant where they tried to convince him to resign. Martínez says COCEM's close ties with the PRI's party machinery in the State of Mexico allows COCEM to mobilize a police presence on its behalf. The Kirkwood plant straddles the border between northern Mexico City and the State of Mexico, one of 32 Mexican states.
"All the problems began in December [1994], when COCEM arrived," says Virginia Vallegas Chimal. A Kirkwood worker for 10 years, Vallegas says she was fired after she refused a demand by plant manager Emilio Grandio that she pledge allegiance to COCEM. Vallegas, an inspector of the electrical components that Kirkwood produces for appliance makers such as Philips, Sunbeam and Braun, says the company falsely accused her and some of her co-workers of crimes, reporting to the police that they had committed theft, sabotage and even attempted to kidnap the plant manager.
Hands-off policy
No representative of Kirkwood management in Mexico City could be reached for comment, despite repeated calls from Multinational Monitor. An attorney at Kirkwood's Cleveland, Ohio headquarters, Greg Ensigne, says the privately held company is a minority owner in the Mexico City operation; he identified the majority owner as a Mexican named Mauricio Merikanskas. Asked why the Mexico plant bears the Kirkwood name, Ensigne says his company's name is used for marketing purposes. "Our name is synonymous with the [electrical] computator business worldwide, so all of our foreign affiliates carry the Kirkwood name in some reference," he says.
It is a common practice for foreigners to invest in Mexico through so-called prestanombres or the "borrowed names" of Mexican nationals, an arrangement designed to insulate foreign investors from liabilities. But, according to Ensigne, "We don't have any control over the [Mexico City] operations whatsoever on any basis." Ensigne says he has no detailed knowledge of the labor problems at the Kirkwood plant in Mexico, saying that his knowledge of specific worker complaints is limited to letters of complaint that the company has received in response to a solidarity campaign promoted by U.S. unions such as the United Electrical Workers of America. "A visit [to Mexico] had been planned in the latter part of May which, because of other business, had to be cancelled," Ensigne says. "I was going to go down personally to see what was happening, not that we'd have any control, but just so we'd have our own first-hand information."
Martínez says the position taken by the U.S. Kirkwood is convenient, if disingenuous. "They are not as removed from the situation" as they suggest, he says. "As investors, they have the means to intervene." He says Kirkwood is cautiously distancing itself because if the "labor conflict in Mexico got extremely bad, it could affect [Kirkwood's] investments in its U.S. plant."
Hands-on policy
Some workers say that maintaining contact with fired workers is sufficient grounds for dismissal at Kirkwood. Francisca Benítez Cantera, one of the most recently fired workers, says Kirkwood employed her to polish electrical collectors, a job that is usually done with protective gloves because the metal collectors cut fingers and hands. After the dismissals had begun and management observed that she was friendly with the fired workers protesting outside the plant gates, Benítez says her boss refused to give her gloves in an attempt to get her to resign. "He always told me that there were none left. I asked him to change my job, but it continued until my hands bled. Some workers had gloves and others didn't. Some of those who didn't have gloves were with the FAT but those who did have gloves were with COCEM."
Benítez says that despite the harassment, she refused to quit and the company decided to fire her. She says that when she was fired on May 27 she asked her immediate supervisor what she had done wrong. According to Benítez he said, "Sincerely, you didn't do anything but your fraternizing with the comrades brought this upon you."
Augustina Villera Barerra says she is one of the women who engineer Juan Sebastian San Vicente harassed. "He would come around as if to review papers, but it wasn't that. What he really wanted was for me to go out with him," she says. "But since I never accepted, he began to box me in. He threatened me and told me that if I wouldn't go out with him, he would report lies about me [to management]. He would try to get me any way he could. If I was working in one spot, he would move me to another and demand more production from me."
Juan Sebastian San Vicente is less flirtatious with reporters than his female subordinates accuse him of being with them. Leaving the plant for his lunch break, the engineer declined to discuss the matter and said he had no idea why workers were demonstrating in front of his workplace. Growing irritable at being questioned, he issued a vague warning: "Be careful, we are in Mexico."
The purge
Under Mexican law, a fired worker can appeal to the local Board of Conciliation and Arbitration, composed of one representative each from the unions, business and the government. But with Mexico's official unions and a government that bends over backwards for multinational companies, these boards typically reflect a narrow business perspective. Martínez says the Board of Reconciliation and Arbitration normally rules in favor of the company and the official unions but it acted legally and fairly in the Kirkwood case - up until the time of the June 21 union vote.
Regardless of the impartiality of interests on a given board, even if a worker is found to have been fired unjustly, he or she has no right to be reinstated, provided that the employer pays three months pay plus other damages. "An employer can at any time fire union organizers, activists or dissidents, pay them the indemnification and damages and be rid of them," observes Dan La Botz in Mask of Democracy: Labor Suppression in Mexico Today.
In the Kirkwood case, there appears to have been an all-out purge of workers seeking union independence. "STIMAHCS filed its title request [to represent Kirkwood workers] on March 13 of this year," Martínez says. "The first layoffs began on March 23, 10 days after we filed our request. Since then there has been a whole chain of firings." On the eve of a June 21 vote to determine which union will represent Kirkwood, Antonio Villalva, another one of FAT's three national leaders, said that Kirkwood had fired more than 150 of some 240 workers at the Mexico City plant.
Villalva says that at an important meeting of the Board of Reconciliation on June 14, COCEM and Kirkwood argued that only workers who were employed at the plant as of May 9, 1995 should be allowed to vote. "What they wanted was for the COCEM workers who have replaced the fired workers to be allowed to vote, because they are all with the COCEM," Villalva says. Under Mexican law, workers employed at the plant at the time a formal request for union representation is submitted, in this case March 13, are the ones who are supposed to be eligible to vote. Villalva says the Board agreed that March 13 would be used to determine eligibility.
The June 21 union vote, however, which the COCEM won, was fraught with irregularities, according to FAT. Martínez says workers told him that, on the eve of the vote, the plant called workers in one by one to pressure them to sign a pledge to vote for COCEM. Some of those who refused were added to a list of workers "who, supposedly because of the importance of their jobs, were not allowed to attend the vote." Martínez says he also received reports of workers being offered bribes to accept severance pay, which disqualifies them from voting. "We estimate that about 85 workers [out of the original eligible pool of 240] accepted money," he says. "But we don't know exactly because we no longer have contact with those who accepted money." In the midst of a severe economic recession in which even Mexican Labor Minister Santiago Oñate expects 700,000 workers to be laid off in 1995, Martínez says he believes that many workers refused severance pay in what appears to have been a failed bid to elect an independent union and regain the jobs.
Of the 153 votes cast, Martínez says 26 were for FAT and 127 for COCEM. Of the 127 for COCEM, he says 94 were cast by supervisory staff, secretaries and others who do not work on the shop floor and who Martínez says the board official should not have allowed to vote. Subtracting these 94 votes from the total, he says there were only 59 legitimate votes cast, 26 for FAT and 33 for COCEM. These 59 valid votes represent just 25 percent of the original pool of 240 workers who were eligible to vote when FAT applied to represent plant workers in March. FAT plans to contest the voting process and the illegitimate votes in an upcoming hearing before the full Board of Conciliation and Arbitration but the independent labor federation holds little hope for a remedy. "The way we see it, given how the [board] authority acted, there is little chance," Martínez says. "The authority appeared to be very inclined toward the plant."
Asset or liability?
Martínez says enlightened managers realize that to be competitive over the long term they need workers who are well represented and who feel like a valued part of the company and who will strive to meet mutually proscribed quality goals. "Kirkwood, Sony and GE represent the most backward thinking businesses," he says. He concedes, however, that plants employing relatively unskilled labor, as Kirkwood does, are better positioned to pursue a slash-and-burn labor policy.
Some Mexican businesspeople are coming around to the view that the official unions are more of a liability than an asset. The Business Center of Northern Coahuila, a trade group representing Mexican businesses along the Texas border, recently announced that it would convene a conference to seek better employer-employee relations. More than 20 industries have fled the area in the face of increasing labor unrest, the group's president, Germán Roblesgil Maza told the Mexican daily El Financiero. A particularly embarrassing example occurred when a Japanese plant, Obras Maestras, left the region after the former head of the local CTM, José Luis Camarillo, tried to shake down its management for $60,000, Roblesgil said.
Since the December 1994 peso devaluation, Kirkwood's already minimal Mexican labor costs have been reduced by 40 percent. Vallegas says her inspection wage was 30 pesos or $5 a day, but most of her co-workers earn $3.30 a day, a little more than Mexico City's $3 minimum daily wage.
"With this salary it is impossible to live - you're half fed," says Vallegas. "You need 50 or 60 [pesos, or about $9 to $10] a day to live. With 30 pesos you can't do anything, and those that make the minimum - even less. I have to stretch what I earn to make miracles."
Multinational Monitor: What is the Authentic Labor Front [FAT]?
Benedicto Martínez Orozco: FAT was formed in 1960 as an alternative to Mexico's official, corporatist unions. FAT struggles for democracy, free association and the independence of unions from the control of the Confederation of Mexican Workers (CTM), the Revolutionary Confederation of Workers and Peasants (CROC) and other unions that we call "officialist." During its 35 years, FAT has been part of important struggles in this country, struggles that have been difficult because business owners prefer to have docile unions that they control. When workers attempt to organize a union that will really work in their interests, management becomes very oppressive of workers, sometimes even physically.
FAT originated among the shoe workers of the Leon valley in Guanajuato and among shoe workers in the Federal District [Mexico City]. Nevertheless, over the years, FAT has diversified and it now has three national unions, two of metalworkers and one textile union. FAT also has industrial unions that only operate in the State of Mexico, rural unions, printer unions and various other unions.
In the 1980s, FAT decided to make its decision-making more horizontal. Earlier, FAT operated under a general secretary. Today, the union has three coordinators and a 17-person national executive committee. The three coordinators are elected in a congress, regional representatives are elected in the regions of their origin and representatives are elected from FAT's four sectors: the peasant sector, the popular neighborhoods sector, the cooperative sector and the union sector.
The government does not permit organizations like ours to play an important role in big business sectors. We know from those who led FAT in the early days that the government told them that FAT could not organize big businesses because that would threaten foreign investment. Since the beginning, FAT's turf has been small- and medium- sized industries, which are largely Mexican owned.
Nonetheless, we hope that the officialist union leaders [who are permitted to represent big business sectors] will realize that they can't continue their obsolete practices for many more years. There has been considerable change in the political climate of this country. If the society as a whole continues to demand liberty, free association and democracy, this will necessarily have to affect the unions as well. The unions cannot remain at the sidelines of these national demands; they will have to change, too.
We continue to see protection of big capital. The government, in its zeal to welcome foreign investment, impedes democratization to guarantee profits for transnational investment capital. We also recognize that this approach hasn't worked. Even though our government has offered cheap labor and has implemented every possible mechanism to guarantee a tranquil investment climate, it hasn't turned out the way the government said it would. In the last years of the Salinas regime, there was a lot of talk about the tremendous investment in this country, but most of this capital was invested in the stock market and has not created jobs.
MM: How would you compare the political organization of FAT with that of the CTM?
BMO: There really is no point of comparison because in the CTM, Fidel Velásquez has for many, many years headed the federation. Practically whatever he says is what the regional and state leaders impose. In our organization, it's completely different. Here, the three national coordinators are elected in a congress by the delegates of the regional districts. The sectoral representatives are elected by their respective sectors.
MM: Fidel Velásquez isn't elected?
BMO: Technically, yes, there is a vote, but we all know what the result will be. If Fidel says that [candidate X] must be elected, then of course all the delegates will elect this representative. This is an attempt to paint a democratic coat over what is really a controlled situation; it has nothing to do with democracy. We understand democracy to be the complete liberty of affiliates to elect their representatives, including the right to disagree with those [candidates] proposed by others.
MM: This year, the CTM called off its "May Day" parade - traditionally a show of unity for Mexican workers - for fear that angry workers would embarrass President Ernesto Zedillo. Does the CTM have problems with its base?
BMO: This May 1 business is very important because the great majority of the workers in this country resent the crisis that, since December 1994, has brought high inflation again. The workers have watched their wages diminish considerably.
There is generalized discontent among the workers and the public over the economic policies applied by the regime. Unfortunately, the official unions have taken an active role in the government's decisions to impose wage ceilings and limit increases in the minimum wage, which affects union-negotiated wages.
In January, the minimum wage was raised 4 percent and in April it was raised 12 percent for a total of 16 percent. But inflation this year has already exceeded this increase. The workers see this and know about the inflation that still lays ahead of them [this year]. All this has demoralized workers.
The labor federations and official union leaders didn't want workers to mobilize on the streets for May 1 because they feared that they couldn't control the workers and that there could have been spirited protests underneath the presidential balcony. They were not prepared to tolerate the insubordination of their affiliates. To avoid taking chances, they preferred to cancel the May 1 parade this year.
We believe the officialist unions have outlived their usefulness, even for plant management, because they no longer have control over their affiliates and they don't represent anything or anybody. Right now, when the plants are struggling with the crisis and an extremely competitive market, they need strong [union] counterparts who can advance things consistent with a mutual agreement to improve production and quality. Each company and national productivity - all the more with Mexico's entry into NAFTA and the competitive fray of the largest producers - must be super competitive. When workers do not have a representative organization that participates in the important decisions of a plant, all the decisions will be made by management and the workers will always be left with the impression that they were imposed upon. When there is strong, true representation of the workers, on the other hand, productivity and quality goals are discussed between the union and management. When they reach an agreement, it has the benefit of generating realistic expectations that goals indeed will be met.
MM: Do multinational companies operating in Mexico, such as Kirkwood, Sony, GE and Honeywell, believe that strong independent unions contribute to productivity, quality and competitiveness?
BMO: Kirkwood, Sony and GE represent the most backward managerial thinking. We have had some experiences in which the union participated with management of more forward-looking companies to achieve common goals. We have one plant in which we had productive discussions over what we could do to achieve quality goals; the union was very active and even management recognized its role.
But if management is not looking to the future, and only considers today, it will do what Kirkwood and Sony are doing. Kirkwood, for instance, accused us of being communists in a flier. We are struggling as a union organization just so that interests of workers are respected and there is union democracy. If this is what it means to be a communist, then, yes, maybe we are communists. But I think the characterization is exaggerated and outdated.
MM: Given that cheap labor is a leading attraction for many multinationals that decide to come to Mexico, is it realistic to think that they won't fight to keep labor costs at a minimum?
BMO: We are in a very disadvantaged position. The high unemployment rate has cheapened the value of laborers. As such, some plants can be very profitable by keeping their labor prices to a minimum because their production is labor-intensive.
But for other plants it is not necessarily an advantage that workers earn very little and [management] continually must train new workers; production in these plants requires a certain level of skill with tools and machinery.
We believe that it doesn't make any sense to continue with the logic that paying less assures greater profits. The world has become highly competitive and there are products here from all over the world. If products produced in Mexico lack quality, there is no way they will be able to compete. Plants must invest in skilled labor to compete.
When we negotiate with plants, we argue that a worker who has his basic needs met is a worker who will produce more and meet quality goals. But if workers are primarily concerned about how they can resolve the economic problems of their households, their thoughts are not there in the plant. They are thinking that after work they have to go work somewhere else so they can afford shoes for their children or buy the week's groceries.
MM: What is FAT's political role?
BMO: We do not agree with the regime. We struggle for democracy, for the right of free association, and union freedom. We are totally opposed to corporatism. This is a position that is totally distinct from that of the CTM. In this sense we play an active role in the political life of the unions and the country. Evidently, our political position is shared and promoted by many other Mexican organizations and people who struggle for democracy, independence and autonomy.
There is a discernible pattern in the PRI government now to form
a strong alliance with the [National Action Party] PAN and pursue bipartisanship.
We don't know what will happen in the [presidential election] year 2000,
but perhaps it will be our lot to have a bipartisan system like the United
States. We think the two parties [PRI and PAN] are of the same family.
We have noticed that the PAN governors who have been elected in recent
years are business people. When my boss is also the government at the same
time, my plight as a worker is not improved. We hope that with all of these
changes there will be real respect for the will of the people and they
will no longer try to impose what the people do not want. At this time,
the great majority of Mexicans vote against the PRI; it is not a reasoned
vote for political policies. This is a delicate time - the country could
swing to the extreme right.