There is widespread debate about the best ways to protect worker rights under globalization and avoid a race to the bottom in job quality. Recent experiences with multinationals in the important industrial state of Puebla, Mexico shed important light on this debate. Globalization naturally affects tradable industries the most, and we examine cases in Mexico’s two most important manufacturing export industries—apparel and auto. We identify two main ways— which we term solidarity-led and companyled—that workers have successfully won recognition of their rights. However, the experiences of workers in Puebla also point to severe limitations of both strategies in an environment that is fundamentally hostile to worker rights.

Mexico is unique in Latin America in that it has one of the strongest bodies of labor law (on paper) in the region; but there are also the problems of deficient state enforcement capacity and weak unions that are seen in poorer countries. This context has opened a space for new actors and the use of alternative approaches to protect labor that extend beyond conventional government-based policies. The state of Puebla is ideal for observing the impact of alternative strategies because it has been an “authoritarian enclave,” tightly controlled by the Institutional Revolutionary Party (PRI) that governed Mexico for seventy-five years—so the government does little to enforce labor rights and, indeed, often impedes their exercise. Case studies demonstrate that under certain conditions, other factors can help counteract such political challenges. The focus here is on two key cases, Mexmode and Volkswagen, that illustrate broader patterns in Puebla and, indeed, throughout Mexico.

Solidarity-led Strategies

I n the case of apparel manufacturer Mexmode (formerly known as Kukdong), a contractor to Nike and Reebok, activists successfully pieced together a complex, solidarity-led strategy.1 National and international activists aimed their fire at both multinational and local authorities. They were able to achieve the recognition of a new, democratic union through which the workers took control of the collective bargaining contract. How did they win?

Sweetheart contracts are common in Mexico, and Mexmode was no exception. The exceptional circumstance was that workers, mostly young women, got so sufficiently fed up with a corrupt union, physical abuse, worm-infested cafeteria food, and the firings of workers who protested that they walked out en masse in January 2001. Though police attacked and dispersed the strikers, student anti-sweatshop activists from the U.S., a major market for Mexmode’s output, rallied in solidarity, targeting Nike. Worker rightsmonitoring organizations sent delegations to visit the plant. Nike soon felt the heat and put pressure on Mexmode’s management. By the end of February most strikers had been reinstated, and by September the workers had a democratically elected union.

In the Mexmode case, private action in the form of international solidarity trumped government inaction. Puebla’s PRI government had ties with the original, unrepresentative union. Neither national nor state government intervention, nor action through the North American Agreement on Labor Cooperation (NAALC, NAFTA’s labor side agreement) secured a democratic union. Instead, international pressure on both the Mexmode company (through Nike) and the state government made the difference. Indeed, the Puebla Conciliation and Arbitration Board didn’t even recognize the new union until it had the backing of the company! The key pressure point was Nike, the highly visible—and therefore vulnerable—brand sitting atop the supply chain.

Company-led Approaches

Though solidarity-led strategies make for great headlines, victories are few and far between. The track record in Puebla suggests that company-led labor guarantees may have broader effects. The giant Volkswagen plant in Puebla and its supply chain are a case in point. Because Volkswagen is unionized on its German homebase—and in a number of other countries—it is both relatively willing to deal with real unions and subject to pressure from real unions in other countries. Volkswagen Mexico needs skilled workers who are not easily replaced (unlike the Mexmode workforce) and its production process is capitaland technology-intensive, so that labor cost is a lower proportion of the total (around 5 percent), again leading to greater tolerance for real dialogue with unions. In addition, because of Volkswagen’s global prominence, Mexican federal authorities have been more zealous in monitoring working conditions there than at many smaller companies.

Importantly, Volkswagen’s role in protecting labor rights goes beyond acceptance of a code of conduct and real labor-management dialogue at its plant. For one thing, Volkswagen has begun to certify its suppliers, with indicators of genuine union representation as one criterion. Volkswagen also directs resources to worker training for itself and its suppliers, creating the opportunity to obtain improvements in productivity and wages all along the chain. Finally, since 2006 Volkswagen has implemented an innovative, global public/private program promoting social protection, health, and security amongst its suppliers. Activities include visits to each site by labor inspectors (alongside the supplier’s health and safety staff), as well as recommendations for strengthening preventive labor inspections, all of which has a positive impact on working conditions and generates benefits for all involved.2

Limitations of These Approaches

Both solidarity-led and company-led protection of worker rights encounter serious obstacles and limitations. Despite the positive stories just recounted, Puebla’s clothing and automotive sectors also illustrate these limitations. In the case of solidarity-led support, the very complexity of the strategy constitutes a weakness. The Mexmode victory depended on an unusually militant workforce, a convenient leverage point in the form of Nike, and a concerted mobilization by U.S.-based activists. The fact that this triumph remains virtually unparalleled emphasizes how rare this combination is.

In addition, the attention span and institutional memory of international activists tend to fall short of those of actors on the ground, as the latest developments at Mexmode remind us. In 2008, a dissident Mexmode faction closely linked to the Puebla political establishment mobilized protests and physical attacks against leaders of the independent union, and then succeeded in getting a workers’ assembly to replace the executive committee with a group from this faction. Witnesses claimed faction members used physical intimidation to win the vote.3 Though workers’ rights-monitoring organizations documented the violence and solidarity activists have sought to mobilize a campaign, they have had far less success than in 2001. For the time being, it appears that Mexmode workers’ gains have been reversed.

In the case of Volkswagen, the most obvious limitation is that relatively few global companies follow its example—and that labor rights advocates have little, if any, control over which companies invest where. But another important limitation arises from the fact that Volkswagen’s recognition of representative unions generates mixed effects on job quality. On one hand, this presence creates a counterweight to global pressure to cut costs and generates increased enforcement of labor rights, reinforced by both public means of protection (government labor inspections) and private ones (codes of conduct and supplier certification mechanisms), with outcomes such as greater compliance with employer obligations to sign workers up for social security. On the other hand, the union presence creates an incentive for Volkswagen to subcontract, which externalizes jobs to dodge the collective bargaining contract (for example, wages at Volkswagen suppliers are less than half as high as at the Volkswagen plant itself). Bottom line, despite Volkswagen’s stated commitment to monitoring suppliers, the quality of union representation varies widely along the Volkswagen Puebla supply chain.

A striking example of the worst side of the subcontracting problem is the case of Johnson Controls, a supplier for Volkswagen and other manufacturers, whose Puebla-based FINSA (industrial park) plant employs 550 workers.4 The union belongs to the CROM (Regional Confederation of Mexican Workers), but the workers—many of whom are hired through a temporary agency called One Digit—can’t elect their leaders, nor do they know the content of the contract, which is negotiated behind their backs. Since 2006, workers organized in the Johnson Controls Workers’ Coalition have made numerous complaints to the firm and the authorities about rights violations related to wages, work hours, safety, and health. As they started to organize themselves with the support of the Worker Support Coalition (CAT), and formed their own organization, the CROM responded by, for the first time, convening a worker assembly focused on contract negotiations. But when workers demanded to know the contract’s content, seven were fired at the CROM’s request. Under pressure, the government uncharacteristically required the company to pay them damages.

More firings took place in 2008, but labor authorities finally responded to the complaints and carried out inspections, detecting serious violations and applying penalties. It is not clear which had more weight: the pressure from Volkswagen and its supplier-monitoring programs or the pressure of popular organizations. Then in 2009, more workers were fired, again seemingly in response to worker activism for a representative union. In addition to complaints presented before the Federal Labor Relations Commission and the International Labor Organization, protests are being directed toward Johnson Controls’ management, headquartered in Milwaukee. Up to the present, despite support from the Volkswagen union, Mexico’s progressive National Workers’ Union (UNT), the AFL-CIO, the International Metalworkers’ Federation, and the CAT, this see-sawing process has continued to tilt against the workers—though at the end of May 2010 another, smaller Johnson Controls plant in Puebla surprisingly agreed (under pressure) to recognize a democratic union.

Lessons from the Two Approaches

This combination of limited victories along with setbacks points to a number of lessons—or at least propositions for further exploration. First, aim at the top of the supply chain. The well-known consumer goods companies occupying that top position, such as Nike and Volkswagen, are more visible and more susceptible to labor, consumer, and public image pressure than the often obscure contractors located farther down the chain. Second, private mechanisms must lead the process. In Puebla, as in many parts of the world, government has close links to business and to corrupt unions and little commitment to worker rights. The prospects for political democratization are elusive at best. Pressure for worker rights must come from outside the government and standard political channels. In one approach the source is international solidarity; in the other it is a company whose attitude toward genuine unions is more receptive for a variety of reasons.

Third, however, target government as well as business. In Mexico and elsewhere, government controls key levers of power over workplace outcomes: union recognition, workplace inspections and related sanctions, the ability to mobilize law enforcement authorities to aid one party or another. With the Mexmode victory, it was critical to keep up the pressure on the state government of Puebla as well as on the company itself. Support for the Johnson Controls workers seeks to hold the Mexican government, as well as the company, accountable. Finally, and perhaps most controversially, though both approaches face daunting limits, company-led worker protections may hold more promise than solidarity-led ones at present. Despite the discouraging example of Johnson Controls/ FINSA, there is evidence that Volkswagen’s influence has, in fact, improved jobs in many parts of its Puebla supply chain. And certainly democratic representation has proven more secure at Volkswagen Puebla itself, taking advantage of the company’s union-tolerant stance, than at Mexmode. This suggests the strategic value of seeking out companies that are accountable to unions elsewhere, and using them as a beachhead to broaden worker rights. To be sure, the greater reach and grasp of company-led defense of worker rights is a reflection of the still-embryonic state of international labor solidarity. And, potentially, the most powerful formula of all will be to combine solidarity-led and company-led pressures, as activists are trying to do in the case of FINSA.

 

Notes:

1. On the Kukdong-Mexmode case, see Jeff Hermanson and Enrique de la Garza, “El corporativismo y las nuevas luchas en las maquilas de México,” in Sindicatos y nuevos movimientos sociales en América Latina, ed. Enrique de la Garza (Buenos Aires: Latin American Council of Social Sciences, 2005), available at http:// bibliotecavirtual.clacso.org.ar/ar/libros/ grupos/sindi/sindi.html; and Jeremy Blasi, “Kukdong: A Case of Effective Labor Standards Enforcement” (Berkeley: Henning Center for International Labor Relations, 2003), available at http://henningcenter.berkeley.edu/gateway/kukdong. html.
2. See http://www.ilo.org/global/About_the_ILO/Media_and_public_information/Press_releases/lang–es/ WCMS_075339/index.htm.
3. Assessment Re Mexmode, S.A. de C.V. (Mexico): Findings and Recommendations (Washington, D.C.: Worker Rights Consortium, July 3, 2008), available at http://digitalcommons.ilr.cornell.edu/ cgi/viewcontent.cgi?article=1356&conte xt=globaldocs.
4. See “Johnson Controls se niega a actuar sobre reclamos de trabajadores,” El Boletín de la Red de Solidaridad de la Maquila 14, no. 2 (June 2009): 6, available at http://es.maquilasolidarity.org/sites/es.maquilasolidarity.org/files/RSM_ Boletin_14.2.pdf; and United Auto Workers et al., “The Fight for an Independent Union at Johnson Controls, Puebla,”April 22, 2010, available at http://www.imfmetal.org/files/10050522043966/ JCIProfile042210.pdf.

New Labor Forum 19(3): 49-50, Fall 2010
Copyright © Joseph S. Murphy Institute, CUNY
ISSN: 1095-7960/10 print, DOI: 10.4179/NLF.193.0000008