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Cablegate: Two Errant Labor Federations Return to the Fold

VZCZCXRO0862
RR RUEHCD RUEHGD RUEHHO RUEHMC RUEHNG RUEHNL RUEHRD RUEHRS RUEHTM
DE RUEHME #2497/01 2271717
ZNR UUUUU ZZH
R 141717Z AUG 08
FM AMEMBASSY MEXICO
TO RUEHC/SECSTATE WASHDC 2950
RUEHC/DEPT OF LABOR WASHINGTON DC
INFO RUEHZA/ARA CENTRAL AMERICAN COLLECTIVE
RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE
RHMFIUU/CDR USSOUTHCOM MIAMI FL
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFISS/DEPT OF HOMELAND SECURITY WASHINGTON DC
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC

UNCLAS SECTION 01 OF 04 MEXICO 002497

SIPDIS

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

E.O. 12958: N/A
TAGS: ELAB ECON PGOV SOCI PINR MX
SUBJECT: TWO ERRANT LABOR FEDERATIONS RETURN TO THE FOLD

REF: (A) MEXICO 1869 (B) 07 MEXICO 2388


1. SUMMARY: In 2006 the CROC (Revolutionary Confederation of
Workers and Campesinos) and the CROM (the Regional
Confederation of Mexican Workers), respectively the third and
fourth largest labor federations in Mexico, led a group of
unions that withdrew from the Congress of Labor. The
Congress of Labor (CT) is the most influential umbrella group
of labor organizations in Mexico. The CROC and CROM left the
Congress of Labor in a dispute over who would assume the
leadership of the organization and had hoped to form their
own multi-union labor association to compete with the CT.
Now, after two years of trying to go it on their own, the
CROC, CROM and several lesser unions that left the umbrella
organization with them have rejoined the CT. A variety of
reasons have been mentioned for the decision by the errant
federations to rejoin the CT ranging from a desire to support
labor unity against the many problems facing Mexico,s
organized labor movement to concerns that their relevance
might be surpassed by an alliance between the teachers, and
the petroleum workers unions (Ref A). Reportedly the errant
unions were accepted back into the CT without preconditions.
A senior CT official indicated that not all members of the CT
wanted to have errant unions back but in the end they acceded
to a request from the GOM who, it appears, wants to have as
many of the country,s larger unions in one forum as it
presses forward with plans to launch a major reform of
Mexico,s labor laws. END SUMMARY


THE CONGRESS OF LABOR
---------------------

2. The Congress of Labor (CT) is Mexico,s largest and most
influential umbrella labor organization. The CT is the body
the Mexican government turns to when it wants to address
issues affecting Mexico,s organized labor movement
nationwide. The CT was formed in 1966 with the blessing of
the GOM and Mexico,s then ruling party, the Institutional
Revolutionary Party (PRI). Since its formation all of the
unions or federations that make up the CT have had direct and
formal ties linking them to the PRI.

3. Although there are several large and important individual
unions in the CT for the most part it is dominated by a
collection of large national labor federations. The more
important of these federations are the Confederation of
Mexican Workers (CTM), the Revolutionary Confederation of
Workers and Farmers (CROC) and the Regional Confederation of
Mexican Workers (CROM). Respectively these organization are
the first, third and fourth largest labor federations in
Mexico. (Note: The second largest federation is the National
Workers Union ) UNT. The UNT does not belong to the CT.
Politically the UNT is informally affiliated with Mexico,s
current main opposition party, the Party of the Democratic
Revolution ) PRD).

4. The most significant individual unions in the CT are the
National Teachers Union (SNTE), the National Union of Miners
and Metalworkers (SNTMMSRM), the Petroleum Workers Union
(STPRM) and the National Railroad Workers Union (STFRM). Each
of these individual unions is recognized for some special
role they plan within Mexico,s organized labor movement. The
Teachers Union,s fame derives from being the largest
individual union in Latin America with an estimated 1.5
million members. Alas, it is also viewed as being one of the
main culprits responsible for what many believe is the poor
state of public education in Mexico. The Miners are known
for the loyalty of many of its members but also for their
combativeness with employers and for the alleged dishonesty
of its national leader (currently living in Canada to escape
prosecution for corruption charges). The Railroad Workers
Union is known because of the role it played in the
successful privatization. During that privatization Mexican
railroads were transformed from a money-losing public
transport system into a profit making cargo carrying system.
The Railroad Workers Union is also known for its flamboyant
leader, Victor Flores Morales. In addition being the head of
the STFRM, Flores has been a Federal Deputy (equivalent to US
Congressman) twice and is a former President of the CT. The
Petroleum Workers Union is known for widespread corruption
and for the excessive benefits (mostly for the union itself
as opposed to union members) it has extracted from the GOM.

MEXICO 00002497 002 OF 004


LEADERSHIP DISPUTE FRACTURES LABOR ORGANIZATION
--------------------------------------------- --

5. Within the world of Mexican organized labor the
presidency of the CT is an important and much sought after
position of prestige and political power. The leader of the
CT is often the main interlocutor on labor issues with the
President of Mexico. The CT president is often viewed as the
main national level spokesman for organized labor in
particular and for Mexican workers in general. Outside of
the CT, the organization,s president is viewed by many
politicians as a valuable ally able to mobilize the union
vote. Consequently, the leader of the CT is routinely sought
out by elected officials and/or those hoping to win elected
office.

6. In February 2006 the term of office of the then president
of the CT, STFRM Secretary General Victor Flores Morales, was
coming to an end. There were several labor leaders in the
umbrella organization who wanted to succeed Flores as CT
president, the most insistent of whom was the Secretary
General of the CROC, Isaias Gonzalez Cuevas. Gonzalez
lobbied hard to be the next CT president and won the
unconditional support of the leaders of the CROM and of the
Miners Union; respectively Ignacio Cuauhtemoc Paleta and
Napoleon Gomez Urrutia. Unfortunately for Gonzalez, Victor
Flores decided that he was not yet ready to step down from
the presidency of the CT. Rather than surrender his position
at the end of his term of office Flores engineered a one year
extension to his mandate as President of the CT.

7. This move, while technically permitted by CT statues, was
very ill-advised from the standpoint of labor unity.
Moreover, Flores arranged the extension of his time CT
presidency through a blatant exercise of political power
within the organization. This action, and the manner in
which it was carried out, caused a fracture within the CT
which ultimately led to confrontation and even limited
incidences of violence between the supporters of Flores and
Gonzalez. As result of all this the CT and the errant group
went their separate ways to such an extent that even though
it never formally changed political party affiliation, the
CROC went so far as to openly campaign (unsuccessfully) for
the PRD, and against the PRI, in Mexico,s 2006 presidential
elections.


A MAYDAY WAKEUP CALL
--------------------

8. After two years of going it on their own the errant
unions decided to rejoin the CT. One prominent CTM official
speculated to Mission Labor Counselor that this year,s May 1
celebration may have prompted that decision by providing a
wake-up call for many groups within Mexico,s organized labor
movement. As was the case last year (Reftel B), only more so
this year, Mexico,s May 1, International Workers, Day,
celebrations served as a stark reminder of the disunity that
exists within the country,s organized labor movement. The
clearest indication of this was the fact that the three major
factions within the organized labor movement (CT, the errant
group and the UNT) all held separate celebrations. The most
important factor all of these celebrations held in common is
that they were extremely poorly attended; even by many of the
various national unions, and federations, leaders who did
not even bother to show up.

9. The good old days of labor unity, between the GOM and
organized labor, and among labor unions themselves, ended
with Mexico,s 2000 presidential elections when the PRI was
defeated for the first time in its 70 year plus history.
From that time on, the Mexican government, now ruled for the
second consecutive time by the National Action Party (PAN),
began distancing itself from the International Workers, Day
celebration hosted under the auspices of the country,s
organized labor movement. At first the government declined
to attend the May celebrations but normally invited the
leaders of the country,s largest labor unions to some highly
publicized event, normally held at the official residence,
&Los Pinos8 (the Mexican White House). Last year, Mexican
President, Felipe Calderon declined to associate himself in
any way with the May Day events. This year even the GOM,s

MEXICO 00002497 003 OF 004


Secretary of Labor minimized his association with the May Day
celebrations.

10. With the PRI,s fall from power, the labor movement
elements tied to it saw a rapid acceleration of a number of
debilitating factors (increased part-time hiring,
outsourcing, the growth of the informal economy, job lost due
to global competition and mass migration to the US) that had
already begun to take a toll. Over the past 10-15 years the
factors negatively impacting the unions caused them to lose
membership and resources. This lost of members and funds
prompted the different elements of Mexico,s organized labor
movement to reassess their relationship with the PRI and with
each other. This divergence of interests was on stark
display in this year,s International Workers,/Labor Day
festivities on May 1. Faced with another year in which the
entire country saw the level of disunity within Mexican
organized labor many organizations began to stake stock of
just how far the movement had fallen.

11. A few weeks later, on May 30, the movement as a whole
faced the possibility of being fractured into even more
separate groupings when the leaders of the Teachers, Union
(SNTE) and the Petroleum Workers Union (STPRM) announced an
alliance to promote &A New Labor Policy in Mexico8 (Ref A).
Reportedly, some 40 other smaller unions joined the teachers
and the petroleum workers to help advance this proposal. The
formal purpose of the alliance was to serve as a discussion
and analysis group to review the problems facing Mexican
workers but many labor observers in Mexico suspected that its
formation was the first step in a move to create a new labor
organization to compete with the CT. It now seems the
alliance will not amount to much but the fact that two such
powerful unions, both formally part of the CT, went outside
the organization in order to address various concerns further
disturbed many within Mexico,s organized labor movement.


GOM ENCOURAGED UNITY
--------------------

12. According to what one of the CT Vice Presidents told
Mission Labor Counselor, the idea of allowing the errant
unions to rejoin the umbrella labor organization was a
subject that had been discussed off and on for months.
Apparently the main problem preventing their return was that
many of the unions still in the CT did not want them back.
The errant unions were viewed as sore losers for not
accepting the defeat of their nominee for CT president and as
disloyal for first trying to take over the organization by
force; and then for leaving the labor grouping altogether.
The negotiations to allow the errant unions back into the
labor organization involved considerable discussions on
having them pay some type of penalty for having left the CT.
For their part, the errant unions wanted to save face and
hoped to get something to show that they were not returning
to the CT hat in hand asking for forgiveness.

13. Ultimately both sides reportedly agreed to drop any and
all pre-conditions on allowing the return of the errant
unions. This agreement on no pre-conditions was not done for
altruistic any reasons. In the end, the errant unions were
(reluctantly) allowed back into the labor fold at the request
of the GOM.

14. Almost since taking office Mexican President Felipe
Calderon,s administration has stated that one of its
priorities is a major reform of the country,s labor laws.
Enacting any significant reform of Mexico,s labor laws will
require a change in the country,s constitution.
Constitutional change in Mexico, relatively speaking, is far
easier than a similar change would be in the US. That said,
it is still not something the GOM would undertake lightly.
As of yet the GOM has not formally provided any specific
details on the types of labor reforms it hopes to enact.
This lack of specific details notwithstanding many of
Mexico,s larger unions and federations has already expressed
strong opposition to any reform that would change the
constitution. The GOM knows that concerted opposition from
organized labor movement could block its plans for reform.
Consequently, it appears the GOM is promoting greater labor
unity so there will be fewer points of potential opposition
when it is finally prepared to officially release its reform
proposals.

MEXICO 00002497 004 OF 004


COMMENT
-------

15. The return of the errant unions to the Congress of Labor
is a noteworthy event for Mexico,s organized labor movement.
Together, the CROC, CROM and the unions that supported them
jointly form a significant part of unionized workers in
Mexico. With them back in the Congress of Labor and with the
apparent non-event of the Teachers, and the Petroleum
Workers Unions alliance the CT represents the overwhelming
majority of all organized workers in Mexico. The only
sizable groupings of unionized works in the country that do
not belong to the CT are those affiliated with the UNT
(National Workers Union). The UNT and their allies in the
PRD, Mexico,s main opposition party, are unlikely to support
the labor reform proposals of President Calderon,s PAN
administration no matter what shape the final details
ultimately take. That being the case, by having a unified,
PRI affiliated, CT with whom it can negotiate the GOM is
increasing the possibility that its reform proposals will
received important opposition party support when it is
finally presented to the Mexican Congress.
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 /
BASSETT

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