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From May Day to Labor Day, GlobalPost explores the human cost of what's been called a "race to the bottom." The hyper-accelerated movement of capital, jobs and resources from the world's corporations — manufacturing, agriculture and service — to the lowest bidder. In an era of diminished expectations, broken promises and sleight of hand, these are labor stories of governments, employers, unions and workers. 

How Mexico's pro-industry unions undermine workers' rights

US organized labor offers support to stop "race to the bottom."

The perfect dictatorship

Mexico’s protection unions are the legacy of a political system that Nobel Prize-winning novelist Mario Vargas Llosa once described as “the perfect dictatorship.”

For most of the 20th century, Mexico was controlled by the Institutional Revolutionary Party, or PRI. Though sometimes compared to the old Soviet Communist Party, the PRI is credited with giving Mexico the longest period of peace in the country’s history during a time when other Latin American nations were wracked by labor upheaval, abusive military regimes and guerrilla wars. Unions, it turns out, were key to the PRI’s system of command and control.

Mexico’s largest confederation of workers, known as the CTM, was founded in 1936 as part of the PRI and affiliates automatically became party members. That allowed union bosses, like Fidel Velazquez who headed the CTM for 56 years, to deliver thousands of votes to PRI candidates.

In return, labor leaders received payoffs, political posts and other perks. Working together with business owners and government officials, union leaders would also keep their workers in line. Increases in wages and benefits were small enough to mollify companies yet just large enough to stave off worker revolts.

“It’s been said that Fidel Velazquez brought labor peace to Mexico,” De Buen said. “But it’s like the Chicago mafia of the 1930s. It’s a totally undemocratic system in which the last thing that matters is the worker.”

The PRI finally lost power in the 2000 election but subsequent administrations have maintained the unseemly triad between government, business owners and labor leaders in the name of maintaining low wages and global competitiveness.

“It doesn’t matter if it’s right-wing or left-wing, the government is an accomplice,” Xelhuantzi-Lopez said.

Mexican government officials did not respond to requests from GlobalPost for comment. However, De Buen pointed out that in a 2010 response to a complaint filed before the UN-run International Labor Organization, the government denied that protection unions and contracts even exist.

But according to the latest US State Department report on human rights, protection unions are expanding in Mexico and now cover nearly all public and private sectors of the economy. By contrast, the report noted that “workers who sought to form independent unions risked losing their jobs, as inadequate laws and poor enforcement generally failed to protect them from retaliatory dismissals.”

One of the most brazen examples of a company leaning on a protection union occurred this year at Arneses y Accesorios, which was once owned by the U.S. aluminum firm Alcoa but was sold last year to PKC Group of Finland.

Arneses y Accesorios, which is located in Ciudad Acuña on the US-Mexican border, produces wiring harnesses and components for American. cars and trucks. Many of its 7,000 workers complained about their $1.35-per-hour wages, dangerous chemical leaks and restrictions on bathroom breaks. They wanted the National Miners and Metalworkers Union, one of the few Mexican unions with a reputation for fighting hard for worker rights, to represent them.

But after the union approached PKC about contract negotiations, company executives quickly signed a protection contract with the CTM, the workers confederation that critics contend serves as a stooge for corporate interests. In a Jan. 31 message to employees at the plant, Harri Suutari, PKC Group’s president and CEO, seemed to acknowledge that the CTM had been brought in to serve the company, not the workers.

“In order to protect itself and jobs, the company has decided to sign a collective agreement with the CTM,” Suutari said. “How much will the union dues be? Nothing, because the company is going to pay them so that the CTM does not enter the plants and has nothing to do with you.”
Winning while losing

Democratic unions can prevail over protection unions but examples can be counted on one hand.

That’s why labor activists often refer to a lengthy 2010 conflict at an auto parts factory in the city of Puebla owned by Milwaukee-based Johnson Controls, a Fortune 500 company with operations on six continents.

The dispute began over bonuses. Under Mexican law, 10 percent of a company’s annual profits must be shared equally among the labor force but workers were offered just $5 each. That prompted a majority of the workers signed affiliation cards with the Miners and Metalworkers Union even though the company already had a deal with a protection union.

Soon afterwards, 70 members of the protection union showed up outside the factory in a show of force. Workers also faced trumped-up accusations that they had kidnapped company executives. Still, employees held firm and eventually announced a work stoppage.

Shutting down the assembly line for very long could have affected deliveries to Mercedes-Benz, Nissan and other auto makers and might have led to major fines against Johnson Controls. As a result, the company quickly recognized the Miners and Metalworkers Union and ended its relationship with its protection union.

In the collective bargaining agreement that followed, workers who were receiving minimum wage secured a 7.5 percent salary plus school aid payments of about $50 per child and increased insurance coverage.

“It was a standout victory because it was so hard to do,” said Kovalic of the United Steelworkers which provided support and advice Johnson Controls workers. “And it’s especially significant for American workers because it involved an American company.”

Although the union uprising in Puebla lifted the spirits of Mexico’s democratic labor movement, many activists say it was an aberration in what’s turning out to be a long and perhaps unwinnable campaign.

For example, Johnson Controls this month announced plans to close the Puebla factory. Indeed, most attempts to fight back against protection unions end with lots of workers receiving pink slips.

Vargas, who was fired by Atento for his activism, refuses to give up. He is now a volunteer organizer for the independent Telephone Workers Union and is trying to sign up his former Atento co-workers, one by one.

On a recent afternoon, Vargas stood outside one of Atento’s call centers passing out leaflets detailing the low wages negotiated by the company’s protection union. But with security guards keeping close watch, most Atento workers hustled out the door at the end of their shifts and hurried past Vargas without giving him a second glance.

John Otis is GlobalPost's correspondent in Colombia. "No Protection" is part of a GlobalPost 'Special Report' on labor rights around the world.