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Cablegate: Auto Parts Supplier and Sub-Contractor Accused Of

VZCZCXRO9395
RR RUEHCD RUEHGA RUEHGD RUEHHA RUEHHM RUEHHO RUEHJO RUEHMC RUEHNG
RUEHNL RUEHPOD RUEHQU RUEHRD RUEHRS RUEHTM RUEHVC
DE RUEHME #5979/01 3341742
ZNR UUUUU ZZH
R 301742Z NOV 07
FM AMEMBASSY MEXICO
TO RUEHRL/AMEMBASSY BERLIN 0405
RUEHKO/AMEMBASSY TOKYO 0477
RUEHC/SECSTATE WASHDC 9719
RUEHC/DEPT OF LABOR WASHDC
INFO RUCNCAN/ALL CANADIAN POSTS COLLECTIVE
RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE
RUEHXI/LABOR COLLECTIVE
RHMFIUU/CDR USSOUTHCOM MIAMI FL
RUCPDOC/DEPT OF COMMERCE WASHDC
RHEHNSC/NSC WASHDC

UNCLAS SECTION 01 OF 03 MEXICO 005979

SIPDIS

SIPDIS

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

E.O. 12958: N/A
TAGS: ELAB ECON EIND EINV PINR MX
SUBJECT: AUTO PARTS SUPPLIER AND SUB-CONTRACTOR ACCUSED OF
ABUSING WORKER RIGHTS

1. SUMMARY: Johnson Controls Inc., a US based auto parts
supplier and One-Digit, its Mexican based sub-contractor have
been accused of a series of ongoing labor rights abuses. The
Johnson Controls and the One-Digit plants where the abuses
are said to be occurring are located in the central Mexican
state of Puebla. The two companies are major parts suppliers
for the Mexican operations of such international automobile
companies as Volkswagen, Ford, Chrysler, General Motors and
Nissan. Some of the abuses the two companies are accused of
include forced overtime, sexual harassment, inappropriate
camera monitors (in restrooms and locker rooms), dismissals
for union organizing activities, denied profit sharing
benefits and threats against family members of fired workers
still employed by the companies. On paper, a union
affiliated with Mexico,s fourth largest labor federation
represents the workers at the two companies. In practice the
union appears to be in collusion with the companies to deny
workers their labor rights and has arranged to have employees
fired simply for asking to see a copy of their collective
bargaining agreement. On November 15, Mission Mexico,s
Labor Counselor and visiting DRL Policy Advisor for
International Labor and Corporate Social Responsibility
accompanied a representative of the AFL-CIO,s Mexico City
office to Puebla to meet with some of the current and
recently fired workers from the two companies. The stories
told by these current and former workers appear to be both
genuine and credible. END SUMMARY


THREE TO ONE AGAINST THE WORKERS
--------------------------------

1. Johnson Controls Inc. (JCI) is, among other things, an
auto parts supplier with international operations but whose
headquarters is in Wisconsin. One-Digit is a Mexican based
company that provides human resources (read outsourcing)
services to a wide range of manufacturing companies. These
two companies have a collaborative operation in the central
Mexican state of Puebla. The two companies main, but not
their only, customer is the Volkswagen de Mexico plant in
Puebla but their operations in that state also produce goods
for Ford, Chrysler, General Motors and Nissan.

2. According to numerous press reports the two companies are
the perpetrators of a growing number of labor rights abuses.
The consequences of these alleged abuses appear to have come
to a head in May of 2007 when their then collective
bargaining contract expired and the workers began to look
forward to the upcoming contract negotiations as an
opportunity to address some of their grievances. On paper
the workers at JCI and One-Digit are formally represented by
a union known as the &National Union of General Industrial
Workers8 which is affiliated with the a national labor
federation called the CROM (Regional Confederation of Mexican
Workers). The CROM is perhaps Mexico,s fourth largest labor
federation and the workers looked to their union and its
affiliated federation to represent their interests. It was
not until a month later the workers learned that their union
&representatives8 had renegotiated and signed a new
collective bargaining contract without their knowledge and
with no consultation whatsoever. In effect the two companies
and the &union8 had apparently gotten together on their own
and decided what was best for the workers.


A TALE OF WORKER RIGHTS ABUSES
------------------------------

3. The workers at JCI (and One-Digit) were shocked to learn
that a new collective bargaining contract had been signed in
their name and that they had been given no opportunity
address a number of long standing grievances. These
grievances reportedly started as far back 2001 which,
according to the workers, was the last time that JCI fully
complied with their understanding of the terms profit-sharing
agreement in their collective bargaining agreement. The
workers indicate that they can only presume that that the
company complied with a profit sharing agreement because they
have never been allowed to actually see the agreement nor any

MEXICO 00005979 002 OF 003


other part of the collective bargaining contracts that their
CROM affiliated union has negotiated and signed on their
behalf.

4. Since 2001 the workers indicate that they have been
subjected to a growing number of labor rights abuses. These
abuse include such things as forced overtime, sexual
harassment of female employees by their male supervisors,
being pressured into signing documents agreeing to
inappropriate camera monitors (in restroom and locker rooms),
dismissals for union organizing activities (simply asking to
see the collective bargaining contract has become grounds for
dismissal) and threats against family members of fired
workers still employed by the companies. Moreover, fired
employees have been denied payment of the full severance pay
benefits they are entitled to under Mexican Federal Labor
Law.

5. Employees, salaries are routinely and severely docked
for any time taken to attend to medical problems even when
the workers can present documented proof of a visit to a
physician in Mexico,s national health care system. In
addition to medical visit absences being deducted from
workers, vacation credit, the workers claim that only
documented absences that incapacitate them for three days or
more are considered excusable. In addition, workers claim
that no consideration is given to pregnant women employed by
the companies in terms of their daily work assignments and
that they are often fired when they can no longer work even
the most demanding schedules. Once fired these women become
ineligible for access to the national health care system.
(Comment: Only currently employed workers, and their
families, are eligible for access to the national health care
system.)


NATIONAL AND INTERNATIONAL HELP
-------------------------------

6. Because of the above-mentioned allegations of labor
rights abuses the workers at JCI and One-Digit have received
both national and international assistance in their efforts
to obtain some form of redress for their grievances. The
problems of the workers at JCI and One-Digit were initially
made public when a Mexican NGO learned of their situation.
The NGO, the Center for Workers, Support (CAT), an
organization dedicated to promoting worker rights, learned of
the conditions under which the employees at the two companies
in question were working when it undertook a study of the
auto parts suppliers operating in Puebla. Once it learned of
the situation of the JCI and One-Digit workers it contacted
the Mexico office of the AFL-CIO for assistance and
international support.

7. Together CAT and the Mexico office of the AFL-CIO have
been assisting the workers in their efforts to get better
treatment from the two companies. The two organizations have
helped the workers file formal complaints against the
companies with both the Mexican state and federal labor
authorities. They have used their media contacts to draw the
attention of the general public to the conditions facing the
workers in the two companies. They have also reportedly made
a direct appeal to the international headquarters of
Volkswagen in Germany (the two companies, main customer)
asking the company to take steps to enforce the code of
conduct that the company agreed to in 2002 which it said
applies to itself and to its suppliers. In addition to the
above-mentioned actions taken by the CAT and the AFL-CIO they
also asked Mission Mexico,s Labor Counselor to meet with
some of the JCI and One-Digit workers to hear their stories
first hand.


USG OFFICIAL MEET THE WORKERS
-----------------------------

8. On November 15, post,s Labor Counselor took advantage of
the visit to Mexico of DRL Policy Advisor for International
Labor and Corporate Social Responsibility to jointly
accompany an AFL-CIO representative to Puebla. Once there,
the head of the CAT,s Puebla office and several other NGO

MEXICO 00005979 003 OF 003


staffers arranged for a meeting with some of the current and
recently fired workers from the two companies. The meeting
took place in the back yard of a JCI employee far from the
operations of either of the two companies. During the
meeting the actual and former employees presented a credible
picture of the harsh conditions under which they currently
labor.

9. The worker spoke in passionate detail about how the two
companies and their CROM affiliated union have repeated
abused their labor rights in open violation of Mexican law.
In addition to the previously mentioned abuses the workers
also told of how JCI systematically lays off employees who
are then immediately hired by One-Digit to do the exact same
job and more often than not in the exact same place they had
been released from. However, as employees of One-Digit these
workers are hired under a series of three-month contracts
that makes them part-time workers who are consequently
ineligible for standard employee benefits mandated by Mexican
law. According to the worker, some One-Digit employees at
this factory have worked under a series of three-month
contracts for up to three years. In addition, the
three-month contracts keeps the worker in a state of constant
fear that the will be permanently let go at the end of that
time if they do not behave. These part-time employees are
all required to pay union dues but they are not allowed to
request any form of union assistance or representation. The
USG visitors were shown a September 2007 pay stub of a
One-Digit worker employed at the JCI factory and saw that
union dues were indeed being deducted.

10. In addition to the above, the workers also told the USG
visitors how the companies manipulated their work and
vacation hours so that they often owed their employers time
for which they had supposedly already been paid when in fact
that was not the case. Furthermore, the two companies make
it a standard practice to force the workers to take as their
authorized vacation time any period when Volkswagen, their
main customer, has workers on strike, or is operating at less
than full capacity for such things as regular maintenance or
when production lines are being re-tooled. Overall, the JCI
and One-Digit laborers presented a convincing picture showing
they were employed in a work environment characterized by
fear, intimidation and systematic violation and/or
intentional subversion of Mexican Federal Labor Law.


COMMENT
-------

11. After meeting with the JCI and One-Digit workers there
seems little doubt that the two companies are engaging in
regular abuses of their employees labor rights. This
situation is made worse by the fact that the union that is
supposed to represent the workers is, in reality, doing
nothing of the kind. With the help of the CAT and the
AFL-CIO the employees of the two companies appear to be
organizing themselves for the process of changing their union
representation available to them under Mexican law. In the
meantime, the conditions under which the companies are
working could improve, in all likelihood, by informing the
main offices of Johnson Control Inc., Volkswagen, Ford, and
the other international automotive companies of the action
being taken by their suppliers in Mexico. All of these
companies have codes of conduct that include respect for
worker rights and there is no reason to assume that they will
not enforce these codes one they are aware that they are
being violated.


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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