Era of Limits for Mexico’s Mighty Unions : Labor: For years, unions have been pillars of Mexican society and their leaders all-powerful. But foreign employers and some dissatisfied workers have begun to revolt.

MATAMOROS, Mexico —  Workers in the export-oriented factories in this northeastern Mexico border city take home twice as much in their pay envelopes as their counterparts 1,900 miles west in Tijuana.

It’s not just that wage rates are higher here. In Matamoros, factories pay their workers’ income taxes and their contributions to Mexico’s government-run health maintenance system. While the rest of Mexico works 48 hours a week, six days a week, the 40-hour workweek is the rule in Matamoros.

Recently, however, Matamoros has begun to pay a heavy price for such benefits.

Despite the city’s relative proximity to manufacturing centers in the eastern United States and to the Mexican industrial city of Monterrey, foreign investors now think twice about starting factories here. Those already here say they are looking elsewhere for expansion.

As a result, Tijuana has five times as many maquiladora plants--the predominantly U.S.-owned plants that assemble export goods from imported components--as Matamoros and more than 50% more people employed in them.

Workers “are beginning to see that there is no work more badly paid than work that does not exist,” warned Jose Manuel Ballina Sermeno, who strongly regrets his decision to open a factory in Matamoros three years ago.

Matamoros says a lot about the challenges facing organized labor in Mexico as the country strives to modernize by attracting export-oriented foreign investment.

For many years, organized labor has been one of the pillars of Mexican society and its leaders were virtually all-powerful. But now, in some regions, there are cracks in the structure: Employers are banding together to more effectively counter national union demands, some companies are moving to parts of the country with less militant labor traditions and members of local unions are resisting leaders imposed on them from above.

“Unions have become a ballast, holding back modernization,” said Raul Trejo Delarbre, a Mexico City researcher who has studied organized labor. “Union reform has become necessary.”

Labor power in Mexico, traditionally concentrated in the hands of a few leaders of the Mexican Workers Federation, known as CTM, is becoming more diffused. Besides the defection of some local unions to smaller, less powerful federations, skilled workers can be expected to follow the example of electricians, pilots, teachers and telephone workers who are attempting to withdraw from the CTM and form their own federation of service workers.

The likely result: It will become increasingly difficult for one person or a small group of leaders to claim to represent the interests of all unionized workers. Workers’ pay and benefits will be based more on skill and performance than on the political clout of union leaders. Significantly, these changes will come not because of reforms pushed by labor leaders but because of forces that they cannot stop.

More Democracy

In the end, representation for rank-and-file union members could become more democratic and the Mexican work force could become more flexible--and thus more appealing to foreign investors. Regions of the country and union federations that languished under the old labor regime could also benefit.

The change, however, may be painful for companies and individuals that flourished under the traditional system.

Nowhere in Mexico is that traditional system more firmly implanted than in Tamaulipas, the oil-producing state in which Matamoros is situated.

The 37,000 workers in the city’s export plants don’t complain about paying the highest union dues in Mexico--6% of their pay, compared to 2% in other cities. They know that they owe not only their privileges, but also their very jobs, to the local office of the CTM.

The federation chooses which workers that come to its hiring hall each morning will fill vacancies at maquiladora companies. Normally, corporate newcomers to Matamoros sign collective-bargaining agreements before hiring a single worker.

Leaders of the federation remain intransigently opposed to change. When threatened with the loss of potential maquiladora jobs, they have said publicly that foreign investors who come to Mexico as conquerors might just as well go home.

“These are companies that have come to take advantage of our overpopulation and lack of jobs. Just as it is important to them to produce goods at competitive prices, it is important to us to have good working conditions and wages,” said Rafael Morales, general secretary of the largest maquiladora union in Reynosa, another Tamaulipas city.

Last month’s rocky labor negotiations in Matamoros--including threats of strikes--added to the list of recent confrontations between Mexican labor unions and foreign-owned companies.

The highly publicized problems also include intra-union fights such as one that has provoked a prolonged strike at a Ford Motor Co. plant near Mexico City, where worker died, and another last year that put 12 Reynosa maquiladoras on strike before most had even begun production.

Commerce and Industrial Development Secretary Jaime Serra Puche has been particularly concerned. The Ford strike was among a wide variety of issues that he discussed with company officials last month in Detroit, and labor problems were at the top of his agenda when he met with foreign journalists recently.

“The conflicts at Ford and in Matamoros have given the impression that there is labor turmoil in the whole country, and that is not the case,” he said, presenting figures that show fewer strikes in 1989 than in 1988.

For many years, organized labor has been one of Mexico’s most important stabilizing forces, and the country’s economic restructuring will force difficult adjustments. The effects will be felt widely because labor unions touch all aspects of Mexican life: economics, politics and even entertainment and recreation.

Organized labor is one of the three divisions of the Institutional Revolutionary Party, or PRI, that has ruled Mexico for 61 years. That makes unions the political voice of the working class.

Union leaders have political influence, and their members get economic privileges. The phrase “blue-collar aristocracy” takes on special meaning in Mexican labor strongholds, such as the oil town of Poza Rica in Veracruz state, where libraries, park benches and funeral homes are union-owned.

In return, union members provide the crowds at political rallies and Labor Day parades. Roll is called at these events, and no-shows are punished with fines or suspensions from work without pay. Union contracts oblige employers to enforce those sanctions.

Unions also perform an important economic function.

Since 1925, when Mexican President Plutarco Calles guaranteed labor tranquility to Ford in exchange for investing in Mexico, the country’s top-down union structure has been one of its major assets in courting foreign investment. Labor unions have guaranteed that Mexican workers would stay on the job--even over the past decade as an economic restructuring has shrunk their spending power by half.

However, union leaders’ demonstrated inability in recent years to negotiate contracts that will maintain workers’ standard of living has cost them credibility among their members and the public as a whole. Mexicans openly say that the once-venerated Fidel Velazquez, 89, a former milkman who has led the CTM for 49 years, is far past his prime.

Last year’s arrest of Joaquin Hernandez Galicia, head of the oil workers, Mexico’s most powerful union, was billed as a government move against corruption. However, it also showed how vulnerable organized labor has become.

Leaders Rejected

Labor’s influence in formulating a series of economic stability pacts among labor, business and government that include wage controls also is perceived to be diminishing with each new agreement. “The government doesn’t call them to consult anymore, just to sign,” economic researcher Trejo Delarbre said.

As a result, rank-and-file workers are rejecting leaders who cannot protect their privileges. They are demanding a voice in running their local unions and choosing their leaders, who traditionally have been imposed on them by national federations.

The loudest demand for union democracy has come from the 3,800 workers at the Ford plant in Cuauhtitlan, northwest of Mexico City.

“We are no longer willing to accept leaders that are imposed on us,” said Gabriel Nava, a welder who has worked at the plant for nine years. The dark-haired Nava, dressed in a polo shirt and worn slacks, was one of several hundred Ford workers who waited outside the plant one day last month, hoping to be recalled to work on what they hoped would be the final day of a strike that began Dec. 8.

Workers say leaders that the CTM imposed on them after a dispute in 1986 are at the root of the current problems. “They sent us these people from Chihuahua (where Ford has an engine manufacturing plant), and they didn’t defend our rights,” charged Pablo Mejia, an electrician who has worked at Ford for six years.

Resentment overflowed late last year in a dispute over the size of Christmas bonuses. In early January, soon after the disputed bonuses were distributed, Hilberto Barrera recalled, he reported to work on the assembly line one day as usual.

“We were in our work areas, ready to begin the day, when a group of men wearing Ford uniforms entered, carrying clubs,” he said. He and his co-workers saw no guns at first, but “when we heard bullets being fired, we ran and ducked.”

Nine workers were wounded, one fatally. The strike began that day, workers say, because they were afraid to go back to work.

Police Guard

Company officials say they do not know how the attackers obtained the Ford uniforms or got past plant security. Two men linked to the former leader of the union local have been arrested, and a warrant has been issued for the arrest of the leader.

The CTM national leadership promised new union local elections and told their members to go back to work Feb. 12. About 1,200 of the 3,800 workers did, but the rest objected to the police guards set up throughout the plant and stayed off the job.

“The police here in Mexico are to repress, not to protect,” said Alfonso Hernandez, an auto painter and one of the workers who did not return. After the workers failed to report for three days, Ford exercised its right under Mexican law to fire them.

Some of the workers are being rehired on an individual basis, and Ford has asked the CTM to send additional workers from the hiring hall. The federation has refused, so the company has hired other workers. The plant has been in limited production for about three weeks, with one shift turning out about 225 cars a day, half the number produced by the normal two shifts.

A small labor federation called the Revolutionary Workers Federation, known as COR, broke away from the CTM 15 years ago. It has challenged the larger federation for the right to represent the workers.

“It’s discouraging in the short term,” Ford corporate spokesman Al Chambers acknowledged in a telephone interview from Detroit. “But we do not feel discouraged in the longer term. Ford has been in Mexico for a long time.”

Companies new to Mexico are less accepting of its labor relations quirks.

That was the case with 12 maquiladora companies in Reynosa that looked for an alternative to the CTM as represented by Rafael Morales. “They didn’t want to sign with Morales,” the youthful labor leader recalled recently with a certain amount of pride.

Maquiladora owners and others familiar with the dispute say export factories in Reynosa had tired of CTM pressures to use union-affiliated transportation companies for workers, cargo and waste. Morales denies that such pressures exist.

Nevertheless, the 12 factories decided to recognize a labor leader who had broken with the local representatives of the CTM, so Morales declared a strike against the plants.

The outcome was a compromise negotiated under pressure from national labor leaders and federal officials that allowed the 12 companies to sign contracts with a new CTM-affiliated union not headed by Morales.

It was only a partial victory, acknowledges Osvaldo Gutierrez, the silver-haired president of the Reynosa Employers Center, which provided consulting services to the maquiladoras. However, he adds, it was a breakthrough because, for once, a group of maquiladoras joined together and refused to go along with union demands.

His counterpart in Matamoros, Hector Martinez Barron, says the same of the heated discussions that resulted last month in a compromise 20% wage increase there after the union had asked for 40%.

Firms Moving

Rather than fight the unions, some companies have decided to move. Their movements are gradual and difficult to detect, said Michael Habig, president of the Reynosa Maquiladora Assn. and manager of Kimco, a piano factory in the city’s newest industrial park. It may be just one production line that is moved or simply an expansion that takes place in another city, he noted.

Such movements favor cities such as Mexicali or Tijuana that do not have militant union traditions, says Jorge Carrillo, a researcher at the Center for Studies of the Northern Border, a quasi-governmental think tank near Tijuana.

They also favor smaller federations such as the Regional Federation of Mexican Workers, known as CROM. Mexico’s oldest labor federation, CROM lost power to the CTM in the 1930s. Now, with a face lift and a more conciliatory philosophy, new leaders such as Joaquin Parada Ruiz are trying to regain ground for the old federation.

As the head of CROM’s 33 Tijuana locals--10 of them at maquiladora companies--and an important national leader of the federation, Parada Ruiz symbolizes the changes toward cities without traditions of labor militancy and toward smaller labor federations. “We believe we can join forces with business and the government to make life better for our members,” he says.

That attitude, says Carrillo, typifies Mexico’s new unionism.

“Foreign investors should not worry,” he said. “This will be very good for them.”

STRIKE ACTIVITY IN MEXICO 1982-1989 In Mexico, unions must register with the government their intent to strike. The government then decides whether the proposed strike will be legally recognized.

Strikes Strikes Percent of Strikes Year Registered Carried Out Carried Out 1982 16,030 675 4.2 1983 13,536 230 1.7 1984 9,052 221 2.4 1985 8,754 125 1.4 1986 11,579 312 2.7 1987 16,142 174 1.1 1988 7,730 132 1.7 1989 6,807 118 1.4

Sources: 1982-1987 data, The Center for Strategic and International Studies; 1988-1989 data, Mexican Commerce and Industrial Development Department.