The Labor Crisis Behind the Electoral Crisis
by David Bacon, TruthOut
NACOZARI, Sonora – Just days after conservative candidate Felipe Calderon declared himself the winner of Mexico’s July 2 presidential election, the Mexican 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, fourteen hundred 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, during a legal strike a company must stop production. The use of strikebreakers is illegal, and no enterprise can close 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 war that has rocked the country for six months, a war that has the beneficiaries of Mexico’s privatization land-rush worried. 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 increase the political pressure for such a rollback. According to the country’s wealthy elite, however, Mexico must be brought back under control instead.
Last April steel workers stopped work at the huge Sicartsa steel mill in Lazaro Cardenas, Michoacan, and have occupied it since then in a plantón, or tent city. Local police tried unsuccessfully to stop their strike on April 20, shooting and killing two union workers, Mario Alberto Castillo Rodriguez and Hector Alvarez Gomez. Miners at Mexico’s other huge copper mine at Cananea went on strike in June.
Nacozari and Cananea are both 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 families owe their enormous wealth to the wave of privatization that transformed the Mexican economy in the 1990s, in which they were virtually given their mines and mills.
Grupo Mexico’s board of directors now includes directors of Kimberly Clark Mexico (the family business of US Congressman James Sensenbrenner, author of last year’s anti-immigrant bill HR 4437) and the Carlyle Group (whose board included President George Bush Sr.). In the 1990s, Grupo Mexico’s mushrooming capital gave it the resources to buy one of the United States’ oldest and largest mining companies, American Smelting and Refining Co.
Rich Mexicans haven’t been the only beneficiaries of privatization. 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 US. 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 in 1998 over similar workforce cuts, meant to make the privatized mine more profitable. Their strike was lost, and 800 people were blacklisted. Many of those displaced, in Cananea as well as other enterprises stripped of workers by economic reforms, left for the US.
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-$160/day before privatization. Today they make $40-$50.
Low wages have become a magnet attracting US 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 US plants, and laying off tens of thousands of workers.
In this election year, popular discontent with the impact of these reforms 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.
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. 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 6-8% 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 on 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,” he charges. At 2:20 AM., 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 Saenz, 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.
So when Labor Secretary Salazar tried to replace him, workers re-elected him twice, and then struck the Nacozari pit and the Sicartsa mill. And when work stopped at Cananea, on the hundred-year anniversary of the uprising there that started the Mexican Revolution, miners announced they too wouldn’t resume work until Gomez was reinstated.
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, twelve days before the explosion.
Lack of enforcement 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. Salazar owns two companies that supply chemicals to Grupo Mexico’s zinc refinery in San Luis Potosi. The bodies of almost all the dead miners are still in the mine, yet to be recovered. Even Cahuila’s governor, Humberto Moreira Valdes, accused Salazar’s local representative of corruption, and Salazar himself of responsibility 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 goes on.
In the meantime, however, Gomez and his family fled Mexico. In July, Fox formally asked Canada for his extradition.
Mexicans headed for the polls in the middle of this turmoil. While Fox was trying to seize control of the miners, Lopez Obrador, candidate of the Party of the Democratic Revolution (PRD), told the press: “There will be no intervention in the life of the unions. Workers can freely elect their own leaders.” But Grupo Mexico and Grupo Villacero poured money into Calderon’s campaign, funding commercials predicting chaos if Lopez Obrador was elected. Images of violence on national TV from Oaxaca and Michoacan dovetailed with corporate-funded commercials for the PAN’s Calderon.
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. Huge national demonstrations are now making the same demand, and tent encampments of protestors have thrown traffic into chaos on Mexico City’s broad main avenue, The Reforma.
Whether or not Lopez Obrador and the PRD win a recount, this labor conflict will continue. 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.
This story first ran in TruthOut, Aug. 8
“Mexico: army mobilized to Oaxaca,”
WW4 REPORT, Aug. 25
“Mexico: labor struggles escalate,”
WW4 REPORT, Aug. 22
Reprinted by WORLD WAR 4 REPORT, Sept. 1, 2006
Note: Reprinting of this story by permission of author only.