The state of the union: Do recent strikes and labor reforms point the way to a new union culture in Mexico? (Spotlight).

"It was on Wednesday, Jan. 10, at night, that the police arrived," says Rosa Palacios, a worker in the Kukdong sportswear maquila in the state of Puebla, east of Mexico City.

"At first they kept their distance, but then they started to kick people and shout obscene words," says Palacios, who has worked in fabric cutting since the South Korean company opened the factory in November 1999.

The strike at Kukdong and the brutal way in which it was repressed made international news last January.

The strike was first over the cockroach-ridden food served in the cafeteria and physical abuse by the supervisors. But the refusal of the CROC (Revolutionary Federation of Workers and Farmers) union to pay heed to complaints and its complicity in illegal firings galvanized workers into action, and they later demanded legitimate, independent union representation.

This makes events at Kukdong (a provider for Nike and Reebok) significant as a poignant illustration of the grass roots demand for a new labor culture in Mexico--one that was promised by President Vicente Fox in his election campaign but has been slow to take form.

GREAT EXPECTATIONS

Even though Fox is a businessman from a conservative political party and the Labor Secretary, Carlos Abascal, was formerly president of Coparmex (Mexico's employers' association), last summer's elections raised labor expectations merely with the defeat of the Institutional Revolutionary Party (PRI).

The old, authoritarian unions that still represent the vast majority of Mexico's s manufacturing labor force were formally and publicly affiliated to the former ruling party, so the election results seemed a guarantee of change in terms of union issues.

In addition, campaign promises to reform the Federal Labor Law and comments by Fox that salaries should rise gave further reason for optimism on the part of workers.

The CROC is one of the major old-guard unions, but the largest--with an estimated membership of over 2 million--is the CTM (Confederation of Mexican Workers).

The experience of garment makers at Kukdong is typical of millions of workers saddled with the powerful PRI-affiliated unions throughout Mexico, many of which rely on protection contracts (labor contracts signed without workers' approval, or even knowledge). Workers are not educated as to their labor rights, or to union law, and their ignorance can be abused.

Mafias who sell "sweetheart" contracts to companies are illegal but rife in Mexico's union world. Blanca Velazquez, a Siemens union activist who is advising Kukdong workers, claims that this was the case in that factory.

"As soon as the CROC came in, things got worse," says Josefina Hernandez, a supervisor on the sewing machines. "The 'credit to salary' (an extra wage the government allots low-paid workers) was reduced and the company also lowered incentives--at a time when we were producing more.

International pressure as a result of the strike eventually pushed the factory to clean up its act. With annual exports of its clothing to the United States and Britain representing US$15 million, Kukdong was forced to take note of a late January report by the WRC (Workers' Rights Consortium) on labor abuses. This U.S non-profit organization, made up of 66 universities, law firms and human rights groups, demanded in a signed contract that clothes manufacturers (in this case Nike and Reebok) comply with a code of labor conduct, which must also be agreed upon by their providers, such as Kukdong.

So now, a group of Kukdong workers said in May, with tentative smiles of triumph, South Korean supervisors no longer hit slower workers with wrenches nor shriek at them in a language they don't understand while banging on tables.

Despite the iron grip that old-school unions still hold in the country, the Kukdong example can be seen as a sign of how things are slowly changing. The spotlight was first shined on the problem back in 1994, when Nafta negotiations highlighted Mexico's corrupt union setup. U.S. negotiators pushed to ensure dirty labor practices wouldn't give Mexico an unfair advantage against U.S. workers. It is telling that more than 20 complaints have been filed under the agreement, most charging Mexico with violating the labor rights of its own workers.

In 1997, the UNT (National Workers' Union) was formed--claiming 1.5 million members--in direct opposition to the CTM's subordination to the PRI. International labor groups considered this an important step forward for Mexico's s union movement and the workers' struggle for health guarantees, social welfare, pension programs and wage increases.

Led by Francisco Hernandez Juarez, the UNT spoke out against government policies of low wages, pro-employer bias in the labor courts, and the right for workers to organize themselves freely in independent unions--a hot issue, especially in the maquiladora plants on the border.

On the eve of the presidential elections in summer 2000, it seemed that Mexico's s unions were slowly coming out of the old corporativist structure.

In August, Hernandez Juarez became closely involved in the VWM (Volkswagen de Mexico) strike that won a 21% wage increase for workers, the highest in the auto industry that year.

"What makes the difference is there is a free union, not one working with the government or the company," Hernandez Juarez told BUSINESS MEXICO. "This is the only way workers can get good wages."

The charismatic leader's involvement raised the political stakes as unions jockeyed for position ahead of the new president's inauguration in December.

In response, Fox met with Hemandez Juarez and other independent union leaders, who pressed their case for more autonomy during the present administration.

Billed as Mexico's next powerful union figure, Hernandez Juarez says that while practices from the days of the "pactos" (agreements to keep down wages) continue, the new government will bring "better conditions to change the law, and we think Fox could be an instrument to change the mafias."

REALITY HITS

When Fox began to court old-guard labor leaders such as CTM president Leonardo Rodriguez Alcaine, however, people began to wonder if he might be propping up the old government-controlled unions that once served his predecessors.

But there is a practical explanation: Although the union confederation's strong-arm tactics and threats are well known by the Mexican public, the CTM is still a force to be reckoned with. Formed in 1936, its membership is estimated at anywhere from 2 million to 6 million. Consequently, Fox has to tread a delicate tightrope with this creaking bastion of power.

According to Thomas Karig, VWM spokesman, the picture here "is nothing like the United Auto Workers in the States." Unions in Mexico are fragmented, he says, and in recent years, Mexico has not been a country of labor conflicts. And insiders say the government--although it agrees there is a need for a new labor culture--wants to keep it that way.

AND THE FUTURE?

So are we looking at a long-term reform strategy, or more government foot-dragging?

Crucial talks to reform the Federal Labor Law did not begin until May 25 and, while they included the UNT, met with barely a whisper in the press.

While Kukdong workers are optimistic they will be granted their own independent union and expect results at the end of June, March brought another test case in the Duro Bag plant in Tamaulipas that points in the other direction. There, workers were intimidated out of voting for an independent union after Labor Secretary Abascal didn't enforce a government commitment to secret ballots at a neutral site.

Other indications, however, suggest that the fall of the PRI has allowed for the gradual weakening of the nation's traditional unions. On April 17, the Supreme Court ruled against the closed shop clause (compulsory union membership) in the labor code, a blow to the CTM.

Professor Huberto Juarez, a labor expert at Puebla University's economics department explains: "Here the power was used not against the employers, but against the workers. The clause was used by CTM, etc. to stifle disagreement in unions ... Now the CTM is quaking in its boots!"

With affiliation to the UNT growing at a steady pace, leader Hernandez Juarez is reserved but confident. He argues that Mexico must move beyond being a low-cost producer.

"We should not continue being a cheap labor force," he says. "We want a competitive, modemized labor force."

Juarez meanwhile says it will be difficult to change this aspect of Mexico's attraction for foreign companies. Rather, he predicts "big changes in the CTM, especially regionally," with more progressive, younger leaders coming to the fore.

Finally, an unprecedented show of union unity on Labor Day this year, when the UNT and CTM coordinated speeches in protest against the government's proposed fiscal reform, may point in a new direction. If the diverse union federations learn the advantages of uniting, Mexico could see a thus far unheard-of sophistication in unions, as shown by the VWM strike. Juarez notes that behind the scenes the CTM was very impressed by the results of the VWM strike, and many analysts have interpreted it as a watershed in labor relations.

"In an epoch when qualifications are standardized, unions are more attentive to what is happening elsewhere. In a rapid time of globalization, as now, small conflicts are beginning to have rapid ramifications, for example via the Internet," Juarez says.

Most analysts agree that the more galling of the union practices will soon be eliminated, perhaps over the next two years. Mexican workers like those at Kukdong can now reasonably hope for secret collective contracts becoming public, and phony registers and revisions, so long winked at, disappearing for good.

Barbara Kastelein is a Mexico City-based freelance writer.