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Cablegate: Inter-Union Dispute Sparks Tension in Northern

VZCZCXRO7532
RR RUEHCD RUEHGA RUEHGD RUEHHA RUEHHO RUEHMC RUEHNG RUEHNL RUEHQU
RUEHRD RUEHRS RUEHTM RUEHVC
DE RUEHME #0545/01 0571528
ZNR UUUUU ZZH
R 261528Z FEB 08
FM AMEMBASSY MEXICO
TO RUEHC/SECSTATE WASHDC 0663
RUEHC/DEPT OF LABOR WASHDC
INFO RUCNCAN/ALL CANADIAN POSTS COLLECTIVE
RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE
RHMFIUU/CDR USSOUTHCOM MIAMI FL
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEAHLA/DEPT OF HOMELAND SECURITY
RHEHNSC/NSC WASHDC

UNCLAS SECTION 01 OF 03 MEXICO 000545

SIPDIS

SIPDIS

DEPT FOR DRL/AWH AND ILCSR, WHA/MEX AND USDOL FOR ILAB

E.O. 12958: N/A
TAGS: ELAB ECON PGOV SOCI PINR MX
SUBJECT: INTER-UNION DISPUTE SPARKS TENSION IN NORTHERN
MEXICO

REF: (A) 07 MEXICO 2285 (B) MEXICO 0354

1. SUMMARY: Outside of the greater Mexico City metropolitan
area, the northern state of Nuevo Leon is probably one of the
most heavily industrialized and certainly the most business
friendly entities in the country. Overall, relations between
the private sector and organized labor in Nuevo Leon are
peaceful and cooperative. Unfortunately, the same cannot
always be said of relations between the larger worker
federations that make up the Nuevo Leon,s organized labor
movement (REF A). For many years now there has been
considerable competition between the state level
organizations of two of Mexico,s larger labor federations;
the CTM (Confederation of Mexican Workers) and the CROC
(Revolutionary Confederation of Workers and Peasants). The
ongoing rivalry between these two organizations has always
been intense but until very recently considerable time has
passed since that competition was anything but peaceful.
Over the past few weeks, however, the peace between the CROC
and CTM has collapsed into a least one incident of violence
and a series of public protests and demonstrations. In the
end, protestors blocked a key highway between Monterrey and
Nuevo Laredo/Laredo for five hours, causing considerable
delay to travelers. The root causes for this dispute are
undoubtedly local but Mexican Federal Labor Laws create the
overall environment that makes it possible for disputes of
this type to occur. End Summary.


SETTING THE SCENE
-----------------

2. With the exception of the greater Mexico City
metropolitan area, it would be hard to think of an entity in
Mexico that is much more industrialized or business friendly
than the state of Nuevo Leon. In almost every sense
imaginable one could easily and truthfully describe Nuevo
Leon by paraphrasing the old adage by stating that the
business of Nuevo Leon is business. There are a number of
cultural and historical reasons for this business friendly
environment but one of the more significant factors
contributing to this business friendly environment is the
cooperative relationship that exists between Nuevo Leon,s
private sector and its organized labor unions.

3. On the surface the relationship between the state,s
private sector and organized labor unions appears to be a
mutually beneficial exchange between near equals. That
appearance, however, is only surface deep. The source of
this outward show is the fact that Nuevo Leon,s private
sector has been remarkably effective at creating their own
company friendly/controlled unions; often referred to as
&White unions.8 These &White Unions8 have been used by
the state,s private sector to keep more traditional unions
from growing too large or from being too aggressive (from the
private sector,s perspective) in contract negotiations or at
promoting worker rights (from the labor union,s perspective).

4. Mexican Federal Law allows a group as small as 20 workers
to form a new union once the proper documents have been
submitted. GOM labor authorities are renowned for not
looking too closely at these documents and Nuevo Leon,s
private sector has taken full advantage of this GOM
shortcoming to form an organized labor movement of their own
liking. The unions that form the company friendly organized
labor movement can, and have been used to supplant more
traditional unions in a wide variety of collective bargaining
situations. Consequently, the traditional unions are well
aware that their freedom of action with regard to strikes and
organizing activities are severely restricted by the
knowledge a White Union is always waiting in the wings to
replace them. As a result, the focus of their energies for
the more traditional unions is not so much negotiations with
private employers on behalf of their members but rather
competition with other traditional for advantage and growth
at each other,s expense.


UNION COMPETITON IN NUEVO LEON
------------------------------

5. Two of the oldest and largest private sector unions in
Mexico are the CTM (Confederation of Mexican Workers) and the

MEXICO 00000545 002 OF 003


CROC (Revolutionary Confederation of Workers and Peasants).
Both of these organizations are national level labor
federations who actively compete with one another (and many
other smaller unions) in a wide variety of areas. Normally
this rivalry is kept within peaceful and fairly well
respected bounds but occasionally those bounds are broken and
that is exactly what has happened over the past few weeks in
Nuevo Leon.

6. Although conflicting accusations make it difficult to
know what really happened it seems that the problem between
the two competing labor organizations in Nuevo Leon started
in early February when the CROC tried to exploit what may
have been a significant failing on the part of the CTM.
According to various press reports the flash point for the
dispute occurred among the 1500 workers of the American
Standard bathroom, plumbing and kitchen fixtures factory in
Nuevo Leon. The CTM is the legal collective bargain agent for
the workers at this plant but allegedly it has done little to
promote the salaries, benefits or labor rights of the
employees at the plant.

7. It is difficult to know if the allegations against the
CTM are true but it is not uncommon in Mexico for a union to
do little or nothing to earn the biweekly membership dues
that it never fails to promptly collect. In the case of the
American Standards plant, it seems some of the workers were
unhappy with their formal union representation and that the
CROC learned of this and tried to persuade them to change
labor affiliation. Changing union affiliation is something
that any worker is legally entitled to do under Mexican
Federal Labor Law (FLL).

8. Unfortunately, the FLL also allows for unions to
implement closed shop type rules where union membership is a
prerequisite for holding a job. Once the CTM found out some
40 workers were trying to switch unions it expelled them from
the organization and then, using Federal Labor Law, it
insisted that American Standard,s management fire them.
Rather than argue with the CTM on a point of relatively minor
importance to them, American Standard,s management complied
with the CTM,s request. The fired workers turned to the CROC
for help and the labor federation tried, unsuccessfully, to
intervene on their behalf with company management. Once it
became clear the CROC was unable to get the fired workers
rehired it attempted win for them a reasonable severance pay
package. The argument between the CTM and the CROC about
what should be done with or for the fired workers became
heated and at some point one of the now unemployed workers
was badly beaten, allegedly by people connected to the CTM.


THE DISPUTE SPREADS
--------------------

9. Once the details of what happened to the beaten worker
began to spread so did the dispute between the CTM and CROC
in Nuevo Leon. The open and unfettered competition began
between the two labor federations soon moved from the
relatively isolated events at the plumbing fixtures plants,
to a series of (largely verbal) confrontations throughout the
state. The prize in the confrontations was often control of
taxi routes. The taxi route competition between drivers
affiliated with the two unions became particularly heated at
public commercial shopping centers and in areas in the
state,s capital city where new neighborhood were being
developed.

10. As the arguments between the two labor federations
dragged on, the CROC demanded that the local authorities
assist the fired workers and hold the CTM accountable for the
worker who was badly beaten. The authorities, response to
the CROC,s demands was, in that union,s view, both
ineffective and decidedly slanted in favor of the CTM. This
prompted the CROC to organize a series of demonstrations the
most dramatic of which occurred on February 16 when some 70
taxis affiliated with the union blocked the road to Nuevo
Laredo (which is also leads to Laredo, TX) for five hours.
The Nuevo Leon authorities were unable to persuade the CROC
cabbies to lift their road block which only ended when a
sustained rock throwing fight broke out between the drivers
and members of the general public stranded on the road for
hours by the blockage.

MEXICO 00000545 003 OF 003


STATE LEGISLATORS DEMAND ACTION
-------------------------------

11. The rock throwing incident caused considerable dismay
among the general public which in turn prompted calls for
action from politicians from nearly all of the political
parties represented in the state legislature. Nuevo Leon is
governed by the PRI, Mexico,s former ruling party which
nationally is now one of the country,s two main opposition
parties. Some legislators speculated that state authorities
had done little to resolve the dispute between the CROC and
CTM because of a reluctance to alienate either labor
organization both of whom are officially affiliated with the
state,s current ruling party. Ultimately the call for a
settlement of the dispute by the public and by opposition
state legislators has prompted both the CROC and the CTM to
moderate their behavior. A final resolution of the dispute
has not yet been reached but both labor organizations have
now talking to each other under the auspices of state labor
authorities.


COMMENT
-------

12. The dispute between the CROC and the CTM in Nuevo Leon
is undoubtedly a local disagree which will eventually be
resolved locally. That said, there are a number of national
factors resulting from abuses of Mexican Federal Labor Law
that contributed to this particular dispute. The existence
of &White Unions8, which weak application of FLL makes
possible, has created an environment in more traditional
labor unions believe they can only grow at each others
expense. FLL facilitation of closed shop type rules then
worsened the restricted competition by the union in Nuevo
Leon by allowing union membership as a prerequisite for
employment. These to examples are just some of the problems
that make the overall labor environment in Mexico so
complicated. Sometime within the next few weeks the GOM is
expected to send to the national legislature to a proposal
for the first major overall of Mexican Federal Labor Law in
decades (REF B). Unfortunately, the current law suits a
variety of special interests in both the private and
organized labor sectors and meaningful change may ultimately
be difficult to achieve.

13. This message was cleared by AmConsul Monterrey.


Visit Mexico City's Classified Web Site at
http://www.state.sgov.gov/p/wha/mexicocity and the North American
Partnership Blog at http://www.intelink.gov/communities/state/nap /
GARZA

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