Mexico: layoffs up, unionists busted

On Dec. 2 Altos Hornos de Mexico (AHMSA), Mexico’s main steelmaker, announced plans for laying off 8,500 contract workers in its Proyecto Fenix modernization project and 3,500 of its own employees. (La Jornada, Dec. 3) In the two days after the layoff announcement, the Mexican government froze some funds belonging to the National Union of Mine and Metal Workers of the Mexican Republic (SNTMMRM), which represents AHMSA workers, and arrested two union leaders. Based on complaints that the union mishandled a $55 million miners’ fund, the federal Attorney General’s Office (PGR) arrested the union’s Vigilance and Justice Council president Juan Linares Montufar on Dec. 3 and political affairs secretary Carlos Pavón Campos on Dec. 4.

The government said the complaints came from workers, but the union charged that the arrests are part of an anti-union drive by the government, AHMSA and the Grupo Mexico mining company. Carrying the fight to the entire mining and metal industry, on Dec. 5 the SNTMMRM started open-ended strikes at mines belonging to Industrias Penoles, the world’s largest silver producer, to demand the union leaders’ release and the unfreezing of the union’s funds. The strike affected the Met Mex Penoles plant in Torreon, Coahuila, and Penoles mines in Fresnillo, Sombrerete (Sabinas), Zacatecas (Francisco I. Madero) and Concepción del Oro municipalities in Zacatecas state.

The SNTMMRM has been fighting the government since early 2006 when charges were filed against union general secretary Napoleón Gómez Urrutia, who fled to Canada. Walkouts since then—including a strike at Grupo Mexico’s giant Cananea copper mine since July 2007—have cost the mining companies more than $2.5 billion, according to the Mexican Mining Chamber of Commerce. (Bloomberg, Dec. 5, La Jornada, Dec. 6)

According to the Martires de San Angel Textile Industry Workers Union (STMSAIT), the textile sector has lost 150,000 jobs in the past five years, and 3,286 companies have shut down, partly because of competition from China. The union’s head, Fermin Lara Jiménez, was jailed on Aug. 15 on charges of fraud involving $40 million; this was based on a complaint from the national export bank, Banco Nacional de Comercio Exterior (Bancomext). (LJ, Dec. 7)

Government Tries to Save Jobs
In a Dec. 5 interview with Bloomberg Television, Mexican Economy Minister Gerardo Ruiz Mateos said the government will react to job losses from the global economic crisis by spending $12.5 billion on roads, ports, railroads and other projects in the first quarter of 2009. He said the government is also studying programs to prevent layoffs in manufacturing. “In manufacturing we’ll suffer the most in terms of jobs because of lower demand for our exports,” he said. Mexico is especially vulnerable to the recession in the US, which buys 80% of Mexico’s exports. Ruiz Mateos expects Mexico to grow at 1.5-1.8% next year, but a central bank survey of analysts reported a median estimate of just 0.38%. (Bloomberg, Dec. 5) (Mexico’s growth rate was about 3.3% in 2007, less than half the rates for Argentina [8.6%] and Venezuela [8.5%]).

Many Mexican companies are wholly or partly owned by foreign-based transnationals. As the crisis intensifies and the demand for credit increases in the more industrialized countries, the Mexican subsidiaries have sent more and more of their capital back into the countries where the transnationals are based. According to a report by the Banco de Mexico, Mexico’s central bank, the Mexican companies sent $2.287 billion abroad in the first nine months of 2008, almost as much as the $2.619 billion they sent abroad in all of 2007. Reinvestment in Mexico by these companies dropped precipitously during the summer of 2008. They reinvested $2.19 billion in the first quarter and $2.610 billion in the second, but in the third quarter the number fell by 95% to $134 million. (LJ, Dec. 1)

The same phenomenon has been occurring with Mexican business owners, who moved more than $19 billion out of Mexico from January through September to deposit in foreign bank accounts or to buy into foreign businesses. The outflow, which doesn’t include money for buying real estate abroad, is a major cause of Mexico’s balance of payments deficit, according to the Banco de Mexico. It is 22% higher than the $15.560 billion direct investment that foreign capital made in Mexico during the same period. (LJ, Dec. 3)

From Weekly News Update on the Americas, Dec. 7

See our last posts on Mexico, the labor struggle and the econocataclysm.