Multinational Monitor

VOL 27 No.


No Choices: Australia's Unions Confront Labor Law "Reform"
by Graham Matthews

Mexican Miners Rise Up: The Explosive Dispute Over Privatization
by David Bacon

Giving Workers the Business: World Bank Support for Labor Deregulation
by Peter Bakvis


Disposable Workers: Layoffs and Their Consequences
An Interview with Louis Uchitelle

Undermining Democracy: Worker Repression in the United States
An Interview with David Bonior

A Kind of Modern Slavery: Labor Flexibility Comes to Indonesia
An Interview with Saepul Tavip


Behind the Lines

The Labor Flexibility Con

The Front
Pfizer vs. The Philippines -- Conflict at the Academies

The Lawrence Summers Memorial Award

Book Notes
The Undeclared War Against the Middle Class -- Misadventures in Corporate Media -- Looting Africa: The Economics of Exploitation

Names In the News


Mexican Miners Rise Up: The Explosive Dispute over Privatization

by David Bacon

Nacozar, Sonora, Mexico — Just days after conservative candidate Felipe Calderon declared himself the winner of Mexico’s July 2 presidential election, the country’s federal labor board lowered the boom on striking miners.

At Nacozari, one of the world’s largest copper mines just a few miles south of Arizona, 1,400 miners have been on strike since March 24. On July 12, the board said they’d abandoned their jobs, and gave the mine’s owner, Grupo Mexico, permission to close down operations.

Under Mexican labor law, a company must stop production during a legal strike. The use of strikebreakers is illegal, and no enterprise can close down for good while workers are on strike. By ruling that there was no legal stoppage, and that Grupo Mexico could therefore close the mine, the board gave the company a legal pretext to fire every miner.

The closure was a legal fiction. In the days that followed, mine managers began soliciting applications from workers for jobs when the mine reopens. Some of the very miners who were terminated may be accepted back as new employees — but with no seniority and no union contract. And not everyone will be going back. Those most active in the strike are on a blacklist.

On the day of the announcement, Sonora Governor Bours Castelo issued arrest warrants against 21 strikers. The two striking local unions offered to sit down with the company to work out a solution to the conflict, but Bours Castelo responded that the union contract no longer existed.

“Negotiations are no longer possible,” he declared, “since the union no longer has any bargaining relationship with the company.”

These were the latest efforts by Mexico’s outgoing conservative Fox administration to force an end to a labor conflict that has rocked the country for six months, worrying the beneficiaries of Mexico’s privatization land rush. It is no coincidence that Fox moved quickly to crush the strike once Calderon, his hand-picked successor, declared himself elected in the midst of accusations of fraud and huge demonstrations demanding a recount.

Unions in the country’s mines and mills are determined to roll back the conservative economic reforms of the past two decades. A victory by Calderon’s opponent, former Mexico City mayor Andres Manuel Lopez Obrador, would have increased the political pressure for such a rollback. According to the country’s wealthy elite, however, Mexico must be brought back under control instead.

The Rise of Grupo Mexico

Last April, steel workers stopped operations at the huge Sicartsa steel mill in Lazaro Cardenas, Michoacan, and have occupied it since then in a planton, or tent city. Although Michoacan’s left-wing governor refused to send in troops to dislodge them, local police beholden to management tried unsuccessfully on April 20, shooting and killing two union workers, Mario Alberto Castillo Rodríguez and Héctor Álvarez Gómez. Miners at Mexico’s other huge copper mine at Cananea went on strike in June.

Nacozari and Cananea are owned by Grupo Mexico, which in turn belongs to one of the country’s wealthiest families, the Larreas. The Sicartsa mill belongs to Grupo Villacero, which is the family business of the wealthy Villareal clan. Both the Larreas and the Villareals owe their enormous wealth to the wave of privatization that transformed the Mexican economy in the 1980s and 1990s. The Villareals were small metal merchants when former President Carlos Salinas virtually gave them the steel mill for a tenth of its real value in 1991, making them instant billionaires. The Larreas got Mexico’s two great copper mines, making Grupo Mexico one of the world’s largest mining companies.

Grupo Mexico’s board of directors now includes directors of Kimberly Clark Mexico and the giant private equity firm the Carlyle Group. In the 1990s, Grupo Mexico’s mushrooming capital gave it the resources to buy one of the oldest and largest U.S. mining companies, Asarco.

Controlling an Angry Workforce

In this election year, popular discontent with the impact of privatization and corporate-friendly policies reached record levels. Fox, a former Coca-Cola executive, sought to reassure Mexico’s new elite that the government would continue protecting them. But ensuring the continuation of a favorable investment climate requires control of an increasingly angry workforce, and the old methods no longer work. Mexican employers themselves are discarding the social contract, in which unions once had a place at the table so long as they didn’t upset it. Corporations like Grupo Mexico and Grupo Villacero want no unions at all.

Napoleon Gomez Urrutia, head of the Mexican Union of Mine, Metal and Allied Workers, says, “They think we’re like a cancer, and should be exterminated. This is no longer a country that can be called a democracy.”

Gomez Urrutia is one of the main reasons why Fox and his corporate friends look at labor with new eyes. And the effort by Fox to remove him from his union’s leadership was the flashpoint that set off the last few months of conflict. Gomez’ father was also head of the miners’ union in the 1980s and 1990s, a corporatist leader in the old style, with a reputation for cooperation. Gomez Urrutia is different.

When Fox pushed hard to reform the country’s labor laws, at the behest of the World Bank, Gomez brought even conservative unions into a coalition that finally spiked his proposals. Mexican labor law gives workers rights far beyond those afforded in the United States. Fox prefers and would like to emulate the U.S. system. Mexican law prohibiting strikebreaking is just one example of the country’s labor protections. Mexican law also gives workers the right to healthcare and housing, protects job security, mandates strict hours of work, and imposes severance pay for laid off employees. Fox liked it even less when the miners union helped kill his proposal to tax workers’ benefits.

Gomez Urrutia was elected union general secretary in 2001, and right away began to push hard against declining conditions for miners. Taking advantage of world record copper prices, he won 6-to-8 percent wage increases, twice those dictated by government austerity policies. He forced open the doors of the elite Technological Institute of Monterrey, where 700 workers and their children now study. He won better housing.

But all hell broke loose when 65 miners died this past February 19, in a huge explosion in the Pasta de Conchos coal mine in the northern state of Coahuila. Horrified by the deaths, the union found that workers on the second shift had complained of high concentrations of explosive methane gas in the shafts the evening before the accident.

“They told us that welding was still going on, even after the failure of some electrical equipment,” Gomez Urrutia charged.

At 2:20 a.m., after the start of the third shift, the gas ignited in a huge fireball.

Two days after the explosion, Gomez Urrutia accused the Secretary of Labor and Grupo Mexico of “industrial homicide.” Fox filed corruption charges against him less than a week later. Labor Secretary Francisco Xavier Salazar Sáenz, with support from Grupo Villacero and Grupo Mexico, appointed Elias Morales, an expelled leader, to replace him. Under Mexican labor law, the labor secretary can use a legal procedure to choose a union’s leader, regardless of what the union’s members themselves decide.

When Labor Secretary Salazar tried to replace Gomez, workers re-elected him twice, and then struck the Nacozari pit and the Sicartsa mill. And when work stopped at Cananea, on the 100-year anniversary of the uprising there that started the Mexican Revolution, miners announced they too wouldn’t resume work until Gomez was reinstated.

Subcontracting Safety

Of the 65 who were killed in the Pasta de Conchos explosion, 40 didn’t actually work directly for Grupo Mexico, the mine’s owner. Instead, they were employed by the network of small, private contractors who supply personnel to large industrial employers throughout Mexico. One of those subcontracted employees, Gomez says, quit three days before the accident, after being required to weld while there were high concentrations of methane. “He said his supervisor told him, ‘If you don’t like it, leave,’” Gomez says.

A union worker can refuse unsafe work, and a labor/management safety committee will back him or her up. But contract workers have no union or safety committee. Unions say employers push these workers harder to take more risks, and pay them less. At Pasta de Conchos, subcontracted coal miners were getting 90 pesos a day (about $9) working 10 to 12 hours, well beyond the legal 8-hour limit.

Contract employment is a new phenomenon in Mexico, a product of privatization. When the Cananea and Nacozari copper mines and the Sicartsa mill belonged to the government, all workers became permanent employees after probation. But when Sicartsa was sold to the Villareals, they put half the workforce on 28-day contracts. Mexican law stipulates that workers receive labor protections after 30 days on the job.

In a July report, the National Human Rights Commission found that the local office of the federal labor ministry had “clear knowledge” before the accident of the conditions that would set off the explosion. In 2004, labor safety inspectors found 48 health and safety violations in the mine, including oil and gas leaks, missing safety devices and broken lighting. Although Grupo Mexico was given an order to fix the illegal conditions, no inspection was carried out to ensure the company had done so until February 7, 12 days before the explosion.

Weak enforcement of safety and health rules continues. Since the accident, eight miners in other mines have died in accidents.

By August, Labor Secretary Salazar had still not paid the families of the dead miners at Pasta de Conchos the legally required indemnity for their deaths. The bodies of almost all the dead miners are still in the mine, yet to be recovered.

Salazar owns two companies that supply chemicals to Grupo Mexico’s zinc refinery in San Luis Potosi. Even Cahuila’s governor, Humberto Moreira Valdes, accused Salazar’s local representative of corruption, and Salazar himself of being responsible for the disaster.

Miners union activists accuse Gomez Urrutia’s would-be replacement, Elias Morales, of belonging to the same cabal. When he was in charge of the union’s bargaining, Morales negotiated an infamous “productivity agreement” with Grupo Mexico, which led to big company profits and big cuts in income for copper miners. That led to his expulsion. Responding to pressure from Grupo Villacero, Morales recently called on authorities to force workers at Sicartsa to end their strike. In response, Miners Local 271, the strikers’ union, challenged him to come speak to the workers themselves, and accused him of hiding in his office in the labor ministry.

Most Mexican unions say the charges against Gomez are bogus, and have organized huge demonstrations to protest. They say the government has done the same to other unions, like those for airline and bus employees, which challenged its policies.

The same day Fox’s labor board announced it would allow Grupo Mexico to fire the Nacozari miners, his administration also issued arrest warrants against six other mine union leaders and raided the union’s national office in Mexico City. Facing the threat of closure at their own mine, the union local at Cananea then voted to end their strike, although they continue to demand Gomez Urrutia’s reinstatement.

At Sicartsa, the strike was ended August 22, when the local, which supports Gomez Urrutia, agreed to accept an 8 percent wage increase, back pay for their time on strike, and a $700 bonus. Grupo Villacero will compensate the families of the workers killed, and workers injured in the police attack.

In the meantime, however, Gomez and his family fled Mexico. Interviewed by phone from a secret location, Gomez says he and his wife received many death threats. Leaders of the United Steel Workers (USW), which represents U.S. and Canadian copper miners, urged him to leave until his safety could be guaranteed. Fox has demanded that Canada extradite him.

The Mexican and U.S. unions formed a strategic alliance last year, but their ties go back much further. Copper miners come from the same families on both sides of the border. In the Cold War era, the left-wing Mine Mill union, now part of the USW, supported Mexican copper strikes. That tradition was renewed in 1998, when union caravans from Arizona brought food and help to Cananea.

“Grupo Mexico now owns mines on the U.S. side, so we’re facing the same employers,” USW International Director Gerry Fernandez explains.

“We are directly affected by the Mexican government’s attack on the mineros,” he says, “and we are going to defend them.”

David Bacon is a reporter and photographer specializing in labor issues. He is author ofCommunities without Borders: Images and Voices from the World of Migration (Ithaca, NY: Cornell/ILR Press, 2006).

Privatization and Labor

Rich Mexicans weren’t the only beneficiaries of the privatization wave that swept Mexico in the 1990s.

Union Pacific became the owner of the country’s main north-south rail line, and immediately discontinued virtually all passenger service, as railroad corporations did in the United States. When new private owners moved to boost profits and cut labor costs, Mexican rail employment dropped from over 90,000 to 36,000.

In Cananea, workers struck against the Larreas family in 1998 over similar workforce cuts, meant to make the privatized mine more profitable. Their strike was lost, and 800 people were blacklisted. Many left for Arizona, 50 miles north.

“I had no alternative,” says Jorge Mendoza, now an undocumented worker in Phoenix. “I really didn’t want to leave, but I went a year without being able to find work.”

Mexico’s ports were privatized in the same wave. Companies like Stevedoring Services of America, Hutchinson and TMM now operate the country’s largest terminals. The impact on longshore wages was devastating. In Manzanillo and Lazaro Cardenas, the two largest Pacific coast ports, a crane driver made about $100-to-$160-a-day before privatization. Today they make $40 to $50.

Low wages have become a magnet attracting U.S. and other foreign investors.

In mid-June, Ford Corporation, already one of Mexico’s largest employers, decided to invest $9 billion more in building new factories. Meanwhile, Ford is moving to close at least 14 U.S. plants, laying off tens of thousands of workers.

— D.B.

Oaxaca's Labor Rebels

The miners aren’t Mexico’s only labor rebels.

Oaxaca’s education workers were occupying the central square of their state capital with a tent city (planton) for three weeks when they too were attacked in June. Teachers were demanding not just higher salaries or a more progressive school curriculum, although they want those too. They and other Oaxacan activists sought an end to state violence and violations of human rights so serious that Amnesty International investigated the administration of Governor Ulisses Ruiz a year ago, after scores had been jailed.

Oaxaca’s Section 22 of the National Union of Education Workers is the most militant teachers union in Mexico, and has fought the conservative state government for years. Conflict became so bitter that one demonstration during the planton brought out 120,000 educators and supporters — the largest in Oaxacan history at that time. Then, on June 14 at 4 a.m., helicopters bombarded sleeping teachers and their children with tear gas shells. Hundreds of police charged into their tents. Within minutes, scores had been beaten. What had been a protest over wages was transformed into a movement to throw Ruiz out.

Ruiz belongs to Mexico’s old governing party, the Party of the Institutionalized Revolution (PRI), while Vicente Fox heads the right-wing National Action Party (PAN). But both parties support the reforms that have created Mexico’s new billionaires. Three days before the Oaxaca confrontation, Ruiz promised the state’s business owners that he would use the mano dura, or a heavy hand, to put down protest.

In the following weeks, teachers and other groups calling for Ruiz’ removal formed the Oaxaca Popular Peoples’ Assembly (APPO). Doctors and nurses joined, shutting down clinics. In a desperate reaction, violence against protesters increased. A state university student was killed in the street, and then the husband of a striking teacher, Jose Jimenez Colmanares, was gunned down during a protest march. Pistoleros shot protesters guarding the transmitter for the Channel 9 radio station, after it had been occupied by demonstrators and used to broadcast news of the uprising. Gunmen also fired bullets at two reporters from Noticias, which recently opened another editorial office in the capital.

Indigenous communities have been heavily involved in APPO. In the Mixtec region, protesters occupied the Huajuapan de Leon City Hall. Ruiz issued arrest orders for 50 leaders.

Mexicans headed for the polls in the middle of this turmoil. Grupo Mexico and Grupo Villacero poured money into Calderon’s campaign, funding commercials predicting chaos if Lopez Obrador, candidate of the Party of the Democratic Revolution (PRD), were elected. Images of violence on national TV from Oaxaca and Michoacan dovetailed with corporate-funded commercials for the PAN’s Calderon.

While Fox was trying to seize control of the mines, Lopez Obrador outlined his labor policy on a campaign swing through Sonora, where the copper miners were on strike. “We will promote respect for union democracy,” he told reporters, “and there will be no intervention in the life of the unions. Workers can freely elect their own leaders.”

On July 2, the official count gave Calderon a 200,000-vote lead among more than 40 million votes cast. Mexico’s most progressive unions (including the miners) then called for a recount, after accusations of fraud threw the tiny margin into doubt.

A million people rallied in Mexico City’s main square on July 16, and two million on July 30, making the same demand. The PRD and its candidate refused to accept the results without a recount, as they did in 1988, when it appeared that fraud robbed leftist candidate Cuauhtemoc Cardenas of victory. Tent encampments of protesters threw traffic into chaos on Mexico City’s broad main avenue, The Reforma.

Despite the massive protests, however, Mexican election authorities refused to make a complete recount, and certified Calderon as Mexico’s next president. Nevertheless, millions of Mexicans see a clear difference in political direction between the party and the social forces that support it, and the current political establishment. And when the country’s electoral court certified Calderon as the winner, Lopez Obrador declared that he would set up a parallel government.

Mexico has traveled so far down the road of neoliberal transformation that union democracy alone cannot reverse its course. But the ability of workers to control their unions is the key to electing leaders willing to challenge corporations and the government policies protecting them. Despite their weakened state, Mexican unions are still a powerful force. And rank-and-file miners and teachers have been willing to face repression and violence to defend their leaders who demand a change in direction.

Such change certainly won’t come easily. The day Grupo Mexico announced it was firing the Nacozari miners, an anonymous spokesperson for Scotiabank, one of Mexico’s largest, told Reuters that Mexican business welcomed the action.

“This sets a precedent, so the workers will think harder,” he threatened.

But, echoing the Grapes of Wrath character Tom Joad (“Wherever there is a fight so hungry people can eat, I'll be there”), Cananea miners’ leader Francisco Hernandez responded. “Wherever there is a miner, there is a person fighting for labor rights and social justice.”

— D.B.

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