Blanca Velazquez studies her audience in a dimly lit bar in Atlixco, a windswept village near the Popocatepetl volcano east of Mexico City.
Two years ago, Velazquez helped organize an independent union at the nearby Siemens factory, which had been represented by an employer-friendly union. After a two-day strike, workers won an 18 percent pay raise to 11 pesos, or $1.21 per hour. Now the 28-year-old factory worker - a dark-haired woman with an intelligent face - is encouraging her audience to form a union at a nearby sweatshop.
'We have a real union with mutual respect,' she says proudly. 'We gained lots of benefits like the aguinaldo.' The aguinaldo is a Christmas bonus. 'And we get Mother's Day off as well as Children's Day.' She adds with panache, 'When people work Sunday now, they raffle a VW!'
LOW LABOR COSTS
The union election at the Siemens factory was a big victory for the National Workers Union, or UNT, a reformist federation that has shaken the foundations of Mexico's labor movement. Ever since World War II, wages for Mexico's auto workers have been determined by los pactos, informal wage guidelines established by politicians, employers and union officials.
Over the years, los pactos ensured low labor costs for manufacturers, and Mexico's auto industry grew steadily. Last year, Mexico's factories assembled nearly 1.9 million cars and trucks, making it one of the top world producers.
But the workers had little voice in the annual bargaining. Now they want power - and they are beginning to get it. This is causing new uncertainty within Mexico's auto industry. With 334,000 workers employed by automakers and suppliers, Mexico's labor force someday could exert considerable industrial clout.
Now companies such as Volkswagen AG and Siemens Automotive Corp. are facing the consequences. Manufacturers are grudgingly beginning to deal with the National Workers Union, which says it represents 1.5 million members in a variety of industries. But the reform movement's future is unclear. Opposing it is the powerful Confederation of Mexican Workers, or CTM, and its powerful chief, Leonardo Rodriguez Alcaine. The CTM claims to represent 6 million members, although independent estimates are closer to 2 million.
Reformers claim Alcaine's confederation routinely negotiates contracts with employers that keep wages and benefits low. Moreover, Alcaine is closely allied with the Partido Revolucionario Institucional, or PRI, which ruled Mexico for more than 70 years. The party's reign ended last year when Vicente Fox was elected president.
The PRI's labor ally, the CTM, still retains considerable influence. But the confederation's power over auto workers has begun to crack. And those cracks first appeared in Puebla, an industrial city east of Mexico City. A number of suppliers set up factories there to serve Volkswagen.
After the Siemens strike in 1999, reformers organized 1,700 employees of Seglo S.A., a logistics company that delivers parts to Volkswagen. That summer, the reformers consolidated their gains by organizing the Volkswagen plant. At Volkswagen, they won a 21 percent pay increase. Workers earn an average of 29 pesos, or $3.20 per hour.
The reform movement's architect can be found in a cluttered office in Mexico City. Surrounded by Don Quixote statuettes, Francisco Hernandez Juarez gives a warm smile after a morning of interviews. 'My companions and colleagues give them to me,' says UNT's leader as he gestures to the statuettes. 'I don't know why.'
Although three presidents jointly run the federation, Hernandez Juarez has become the most eloquent voice against the policy of los pactos. Asked whether the reform movement could hurt Mexico's position as a low-cost producer, he replies, 'I think this is part of the problem. We should not continue being a cheap labor force. We want a competitive modernized labor force.'
After the election of President Fox, Hernandez Juarez and other independent union leaders demanded an end to government interference in the activities of the labor unions. In response, Fox met with those leaders late last year. Hernandez Juarez says the new government offers an opportunity to let the reform movement grow. 'We think Fox could be an instrument to change the mafias,' he says.
But Hernandez Juarez has kept Fox and his union rivals off balance. After meeting the president, Hernandez made a show of solidarity with the rival CTM union during May Day festivities. Given CTM's alliance with Fox's political foes, that was a rebuff. Still, Hernandez Juarez implies that he is not ready to make peace with the other union. 'The CTM is the official union, part of the former ruling party,' he says. 'They buy and sell collective contracts.'
As a rising power within Mexico's labor movement, Hernandez Juarez is much in demand. Yet he is surprisingly accessible, and his office - a baroque space filled with personal touches - contrasts with the muscle-flexing pomp associated with Mexican organized labor. A duskily handsome man, he has a small black beard streaked with gray. He looks considerably younger than his 51 years.
Hernandez Juarez is a hardened veteran of the labor movement. After he became a telephone maintenance technician at the age of 18, Hernandez Juarez rose rapidly through the telephone workers union. By the time he was 27, he was named general secretary. In 1997, he played a key role in the formation of the National Workers Union, which represents more than 200 workers' and peasants' organizations.
In contrast to the imperial style of his union rivals, Hernandez Juarez tries to stay in touch with his membership. Once or twice a year, he crosses the country to visit the 160 affiliates within his federation.
Eduardo Torres, a media assistant, says, 'Obviously he plans strategy, but his strength is his personal relationship with the workers.'
Instead of a necktie, Hernandez Juarez wears a silver medallion, revealed by a shirt not fully buttoned. It is a look that fits his image as a leader in touch with his troops. He stands up to put on his trademark leather jacket and leaves for a meeting with Leonardo Rodriguez Alcaine.
His secretary nods when a visitor notes the office clutter. 'That's what I tell him,' she says in a maternal, disapproving way. 'His office is stuffed with odd things.'
The Old Guard
'I love Don Fidel as a leader of this country and as a father,' declares Juan Galindo, his hand on his heart and massive belly spilling over his waistband.
Fidel Velazquez has been dead for four years, but his iron-fisted rule of the CTM is not forgotten. The towering statue in his honor outside the union federation's headquarters memorializes his long reign. Near Mexico City's monument to the Revolution, the building reminds a visitor of George Orwell's novel, 1984. Does this austere and nearly empty palace of the workers represent labor or management? Does it represent Mexico's working classes or its capitalist masters?
Formed in 1936, the CTM has been a key participant in los pactos. The federation can plausibly claim that this agreement among employers, government and labor created the conditions for Mexico's explosive manufacturing growth. But now, growing expectations among workers - plus the labor reform movement - have created a murkier future for los pactos. And Velazquez's successor, Rodriguez Alcaine, must deal with that uncertainty.
A biography of Alcaine claims he was born May 1, 1919. It may well be true that he was born on May Day, a date revered by the labor movement. But it does seem to be an interesting coincidence. After all, the Mexican dictator Porfirio Diaz altered Independence Day so it coincided with his birthday.
Associates call the 82-year-old Alcaine La Guera, or The Paleface. He has a brother, a lesser union boss they call the sow. Union officials who know him say Alcaine uses coarse language and is volatile, and he is famous for keeping his visitors waiting.
Visitors soon grow all too familiar with the leather sofas, brass ashtrays and brown marble floor in the waiting room outside his office. Elderly officials in suits and middle-aged women in aprons glide through the room. A sour-faced woman in jeans sets up a stand by the elevator to sell buttons and badges with the PRI logo.
'Fidel Velazquez was so important that he kept state governors waiting. He kept one rival union leader waiting for two years,' boasts Galindo, a minor union official. 'La Guera, he doesn't even show up!'
Indeed. In keeping with his reputation, Alcaine declined to be interviewed for this article.
Alcaine has been chief of the Electrical Workers union for as long as anyone can remember. He is a PRI militant and president of the Labor Congress. Within Mexico's labor movement, he represents the decades-old power of corporatism.
But with the fall of the PRI, the balance of power has shifted. In September, the Mexican Supreme Court ruled that he must return 2 billion pesos, or $20 million, to the Electrical Workers savings plan. Until then, union officials were largely immune from government prosecution.
But his subsequent re-election to head the union in November - plus the congratulations from president-elect Vicente Fox - allowed Alcaine to cling to power. But the CTM's clout is eroding. When Galindo grumbles about the decline of Mexico's auto industry, a visitor asks him what his union did for 2,600 DaimlerChrysler workers who face layoffs.
'Everything!' he shouts.
But his three companions disagree. 'The CTM did sh- for them,' says a younger, red-faced man. 'They are out on their asses.'
Considering Alcaine's close relationship with the PRI party, one might expect President Fox to topple him from power. After all, Alcaine threatened a nationwide series of strikes if Fox won the election.
But Fox has good reason to avoid a power struggle with the CTM. The union represents workers in the oil, sugar, electrical and chemical industries. Moreover, Alcaine's confederation represents workers at most of Mexico's auto assembly plants.
Although Alcaine remains allied with the PRI, it appears that he has reached an informal truce with Fox. 'It is very important that the CTM and Fox have a gentleman's agreement that Fox won't touch Alcaine,' says professor Huberto Juarez Nunez, an expert in automotive labor relations at the University of Puebla.
But Fox cannot protect Alcaine from economic downturns. In January, Daimler-Chrysler announced plans to lay off 2,600 workers in Mexico. Said one labor organizer: 'The union leadership doesn't know what to do. In the United States, the union went through this 40 years ago, and so they have job security provisions. Here, there is no national auto workers union and no unity.'
Reformers do not expect much help from Fox. The Labor Ministry and the Federal Labor Board are run by officials with close ties to business. And Fox opposes inflationary wage increases. In December, he proposed to raise the minimum wage by 6.9 percent, two points below inflation. Says one labor official: 'For this government, inflation is a priority.'
Furthermore, Fox's Labor Minister, Carlos Abascal, has been reluctant to use the government's power to ensure more open union elections.
In March, reformist union organizers at the Duro Bag Manufacturing Co. plant in Rio Bravo claimed workers were intimidated out of voting for an independent union. The government failed to carry out promises to ensure secret balloting at a neutral site. Witnesses say the Revolutionary Confederation of Workers and Peasants, a former PRI union, brought in enforcers from Mexico City. The day before the vote, plant workers saw guns carried into the plant. The reform union lost the election.
The unions' infighting leaves Fox in an awkward position. The decline of the CTM could create a dangerous vacuum within labor, causing strikes, inflationary wage increases and the flight of investment capital.
'You can't suddenly change reality without having something that can replace the old system,' says Guillermo Valdez, a labor expert at the Economists and Associates Group, a Mexico City research institute. Labor unrest is the last thing Fox wants. Mexico's economy is slowing in response to the economic downturn in the United States. In Mexico, 96,000 workers lost jobs in the first four months of the year. To avoid layoffs, some employers are cutting workers' wages as much as 50 percent. Abascal calls these measures 'practical solutions to keep the labor peace.'
Meanwhile, the Council for Dialogue in the Productive Sectors - a group of business leaders, union officials and government ministers - met May 25 to discuss wages and other issues. The group, which includes the UNT, will meet every two months.
Are the participants negotiating a new pacto? Abascal denies it. He says the days of los pactos are over. But others believe that government, business and the unions will continue to consult on wages.
'Fox is playing the CTM like a fiddle, as well as the UNT and the independents,' says one union official who asked not to be named. 'He has got everyone wanting to be the partner in dialogue with the government, and then his people put the screws on. He can keep on doing this for a while, as labor is so weak.'
Perhaps so, but the UNT continues to grow, thanks to militant workers such as Siemens employee Blanca Velazquez. On an April night in the Atlixco bar, Velazquez swapped stories with her audience about workplace abuses, police beatings and hospitalized comrades.
Asked if she had union experience before the Siemens strike, she snapped, 'No, but I am not stupid, either. They (former union officials) were stealing the Christmas bonus, so we organized.'
If activists such as Velazquez gain power, the days of behind-the-scenes wage pacts may be limited.
E-mail writer Barbara Kastelein at [email protected]