Date: Thu, 3 Sep 1998 22:20:26 -0400
Subject: AUT: Part 1, Mex Labor News, Sept 2, 1998


MEXICAN LABOR NEWS AND ANALYSIS
September 2, 1998
Vol. III, No. 15
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               About Mexican Labor News and Analysis

     Mexican Labor News and Analysis is produced in collaboration
with the Authentic Labor Front (Frente Autentico del Trabajo -
FAT) of Mexico and with the United Electrical Workers (UE) of the
United States and is published the 2nd and 16th of every month. 

     MLNA can be viewed at the UE's international web site:
HTTP://www.igc.apc.org/unitedelect/. For information about direct
subscriptions, submission of articles, and all queries contact
editor Dan La Botz at the following e-mail address:
103144.2651-AT-compuserve.com or call in the U.S. (513) 961-8722.
The U.S. mailing address is: Dan La Botz, Mexican Labor News and
Analysis, 3436 Morrison Place, Cincinnati, OH 45220.

     MLNA articles may be reprinted by other electronic or print
media, but we ask that you credit Mexican Labor News and Analysis
and give the UE home page location and Dan La Botz's compuserve
address.

     The UE Home Page which displays Mexican Labor News and
Analysis has an INDEX of back issues and an URGENT ACTION ALERT
section.

     Staff: Editor, Dan La Botz; Correspondents in Mexico: Bob
Briggs, Peter Gellert, Jorge Robles, Juan-Carlos Romero, Don
Sherman.
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IN THIS ISSUE:
     *Mexico Faces Economic Crisis--Labor Promises Not to Fight-
          by Dan La Botz
     *Bank Rescue Controversy Contributes to Crisis -
          by Peter Gellert
     *Coalition Forms to Stop Labor Law Reform
          by Don Sherman
     *Unemployment Insurance in Mexico??
     *Volkswagen Workers Union Settles for 21 Percent Increase
     *GM Delphi Division Closes Mexican Plant
     *Mexican Petroleum Institute Workers Want 45% Increase
Part II
     *UE Hosts Canadian and Mexican Political Leaders
     *Manuel Fuentes, Mexico City Director of Labor Speech to UE
     *Social Statistics
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Dear Readers,

     I want to call your attention to the highly informative and
politically fascinating speech to the United Electrical Workers
(UE) convention by Manuel Fuentes, the Director of Labor of
Mexico City. His speech is found in part two of this newsletter.

     Dan La Botz, editor.
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             MEXICO AGAIN FACES ECONOMIC CRISIS
     OFFICIAL LABOR UNIONS PROMISE NOT TO FIGHT FOR RAISES

                         by Dan La Botz

     With the fall in oil prices, the economic crisis in Asia
especially in Japan, and the near economic collapse of Russia,
Mexico seems once again to be on the verge of depression. The
international problems have been exacerbated by domestic problems
such as the Mexican bank crisis, and particularly the scandal of
the FOBAPROA bank insurance fund. (See Peter Gellert's article
below.)

     The symptoms of the latest wave of economic crisis in Mexico
are many. First, there is the further fall in the value of the
peso which in the last month has gone from about 8.5 to 10.2
pesos to the U.S. dollar. Also Mexican interest rates have risen
to about 40 percent, making loans unthinkable for many
businessmen and farmers. Then too the Mexican stock market has
fallen almost 50 percent in value over the last year. Mexico's
annual growth rate is now projected by analysts to reach only
about 3.0 percent, though President Ernesto Zedillo hopes to
reach 4.0 percent.

     As a result of the fall in oil prices which provide much of
the government's revenue, the Zedillo government has cut the
Federal budget, mainly in the area of social services. Federal
budget cuts mean among other things a reduction in the workforce
and a freeze on new hiring in many areas. 

     Taken altogether, Mexico faces its worst economic situation
since the collapse of the peso in December 1994.

     The Mexican government through Secretary of Labor Jose
Antonio Gonzalez Hernandez advises workers to "moderate" their
wage demands in order to preserve jobs, warning that demands for
big wage increases could result in the failure of small
businesses. 

     Once again, as over the last several years of the economic
crisis in Mexico, workers, peasants and the poor are called upon
to make sacrifices to save the economy which benefits bankers,
industrialists, and the very wealthy, and of course U.S. and
other foreign corporations.

                What the Crisis Means for Workers

     About one-third of all Mexican workers earn one minimum wage
per day, or less than US$3.00, while two-thirds earn less than
two minimum wages or less than US$6.00. (Mexican wages are often
discussed in terms of multiples of the minimum.) Most workers
spend about 50 percent of their income on food. Mexican
government officials and university researchers now estimate that
over 50 percent of the Mexican population suffers from
malnutrition.

     The Mexican Secretary of Labor  claims that wages rose 23
percent in July keeping workers 7.7 points above inflation. But
the Authentic Labor Front (FAT), an independent union federation,
argues that the 14.7 percent increase in the minimum wages at the
beginning of the year has been completely eaten up by inflation,
and that today 75 percent of the working class does not have
sufficient income to maintain a balanced diet.
     
          Labor Leaders' Response to the Crisis

     Mexico's "official" or government-controlled labor union
leaders raise no threat of economic or political strikes to
respond to this new era of crisis. On the contrary, they try to
out-do each other with promises of labor peace. Jose Ayala
Almeida of the Federation of Unions of Workers at the Service of
the State (FSTSE), Enrique Aguilar Borrego of the Bank Workers
Union (FENASIB), Tomas Vazquez Vigil of the Mexican Teachers
Union (el SNTE), and others have promised not to fight for higher
wages, which they say would only lead to higher inflation. Even
Francisco Hernandez Juarez, head of the Telephone Workers Union
(STRM) and a leader of the National Union of Workers (UNT) has
been quoted in the press as opposing a wage increase at this
time, though other reports have him supporting a wage increase.

     Victor Flores Morales, the head of the Mexican Railroad
Workers Union (STFRM)--who can always be counted on to represent
the interests of the government and the employers--not only
opposes any demand for wage increases, but warns workers that "it
would be a crime" if anyone should attempt to get a raise. (He
was quoted to this effect in the pro-government newspaper
UNOMASUNO on August 30.)

     The UNT has convened for this week a special forum to
discuss alternatives to the government's economic policies. If
the UNT comes up with an alternative program and is prepared to
lead a fight for it, it could find a following among the Mexican
people. If it does not, other new union coalitions, such as the
newly founded National Assembly of Workers (ANT) may move into
the vacuum of leadership. (On the ANT see the story below by Don
Sherman.)

                         ###

          BANK RESCUE CONTROVERSY CONTRIBUTES 
             TO MEXICO'S ECONOMIC PROBLEMS

                  by Peter Gellert

     While the Asian and Russian disasters have contributed to
Mexico's current economic crisis, domestic issues also play a
central role. The inability of the Mexican government and the
Congress to resolve the controversy surrounding the bank bailout
program continues to undermine confidence in the Mexican economy.

     The bailout program, conducted by the Bank Savings
Protection Fund or FOBAPROA, was launched during the 1995
economic crisis and involved the government buying up banks'
overdue loan portfolios, to the tune of 65 billion U.S. dollars,
equivalent to 16 percent of Mexico's annual gross domestic
product (GDP). 

     Now the Zedillo government wants the Mexican Congress to
authorize the conversion of FOBAPROA liabilities into public
debt. That would raise the debt from 26 to 42 percent of the
annual GDP.

     The government's argument is simple: the alternative to a
bailout is the collapse of the financial system with catastrophic
consequences for all.

                    PRD-PRI FACE OFF

     The issue has pitted the left-of-center Party of the
Democratic Revolution (PRD) against the government of the
Institutional Revolutionary Party (PRI). The PRD charges that
bankers provided loans to each other and to close business
associate, made massive donations to the PRI's election
campaigns, and then passed on uncollectible and sometimes
fraudulent loans to FOBAPROA.

     In any case, it is clear that some of the country's most
rich and powerful defaulted on loans that the government now
proposes to absorb. The question raised by the PRD and also by El
Barzon, the debtors' movement, is whether the government should
bail out those who can most afford it, at the expense of those ho
can least afford it.

               Loans for Rich and Powerful

     Indeed, half of FOBAPROA's debts, over 600 multi-million
dollar loans, correspond to credits that banks granted to rich
investor.

     In July, PRD President Andres Manuel Lopez Obrador released
a list of 304 bankers, businessmen and investors who allegedly
benefitted from FOBAPROA to the tune of 11 billion dollars. Four
of those who were aided by FOBAPROA are on FORBES magazine's list
of the richest men in the world, two were members of the
financial committee of the PRI in 1998, seven attended the famous
1993 banquet where the wealthiest men in Mexico each pledged 25
million dollars to the PRI, and several are bankers who lent
themselves millions--and then defaulted on their loans.

     What was initially a major banking and financial scandal
rapidly escalated into a political scandal as well. Everyday for
two months news has appeared about how PRI campaigns have been
funded by crooked and in some cases fugitive bankers through
defaulted loans taken over by government bailout agencies. The
spotlight has also fallen on Roberto Madrazo, the governor of
Tabasco, a PRI hardliner whose campaign spending was 60 times the
legal limit, financed by huge contributions from bankers whose
massive debts were assumed by FOBAPROA.

          Suspicion, Controversy, Political Debate

     A general suspicion has arisen in society that there is a
network of complicities between banking and financial corruption
and top political circles.

     The PRD, backed by the conservative National Action Party
(PAN), which is rapidly trying to distance itself from a
government increasingly in disgrace over this issue, is demanding
a full and impartial investigation. Furthermore, the PRD has
announced that it will conduct a nationwide referendum on August
31, to ask the Mexican people whether the banker's loans should
be converted into public debt. [So far we have no report on the
referendum.]

     The reaction of the authorities has been swift and strong,
accusing the PRD of being irresponsible and using the issue for
electoral gain. Officials argued that information on credit is
confidential, covered by bank secrecy rules. Furthermore, Finance
Minister Jose Angel Gurria argues that any delay in approving the
conversion of FOBAPROA's accounts to public debt would undermine
investor confidence in Mexico.

     The government authorities have accused the PRD of provoking
capital flight, a rise in interest rates, and leading the country
into an economic crisis. While the scare campaign has received
the backing of the organized business interests, it doesn't
appear to have too many other takers. 

     The government clearly wanted an agreement with the PRD and
other parties on how to deal with the FOBAPROA liabilities. The
PRD, El Barzon and other debtors' organizations, and social
movements are increasingly unwilling to play that game. They
believe the best way forward is to take the issue directly to the
people. 

     Even within the ruling party, many legislators are reluctant
to pass debt on to taxpayers over a 30-year period. This would
cut directly into Federal social spending, which has already been
slashed 40 percent since 1994. There has been the suggestion of a
compromise formula by the PRI to reduce the overall amount to be
converted into public debt, accompanied by a review of FOBAPROA
operations. At the same time the ruling party is furiously
rejecting calls to investigate its 1994 campaign finances.

     The question of converting the bankers' uncollectible
accounts into public debt is an explosive issue, with long-term
implications for the country's economic and political system.

                              ###

                    COALITION FORMS TO STOP 
                       LABOR LAW REFORM 

                        by Don Sherman

     Some 800 delegates representing 52 unions and other social
organizations attended the first meeting of the National Assembly
of Workers (ANT) on August 29. The meeting, held in a large
public auditorium close to the heart of Mexico City, was called
to form a coalition to prevent any changes in the Mexican Federal
Labor Law (LFT). 

     Among the organizations and unions present at the assembly
were the Mexican Electrical Workers (SME), one of the oldest
unions in Mexico; the Coordinating Committee of the Teachers
Union (la CNTE); the National Workers Council (CNT; the Zapatista
Front for National Liberation (FZLN); the Broad Front for the
Construction of a National Liberation Movement (FAC-MLN); the
Francisco Villa Popular Front; the National Association of
Democratic Attorneys; and the Independent Proletarian Movement
(MPI). The assembly claimed to speak for over 50,000 workers
altogether.

     For many of the delegates in the assembly, the basis of the
federal labor law was the Mexican Revolution itself. Many workers
fought and died in order to have a constitutional guarantee of
workers' rights, the asserted. Although many of the Mexican labor
law provisions guaranteeing these rights have been virtually
ignored by the government, corporations and the government
supported union federations, such as the Confederation of Mexican
Workers (CTM), almost everyone who participated in the assembly
supports the ideas embodied in the Federal Labor Law.

     The assembly was divided into morning and afternoon
sessions. In the morning twenty-some speakers took the stage to
denounce the impact of globalization on Mexican workers and
linked the "neoliberal globalization policies" of President
Zedillo with the government's attempts to change the Federal
Labor Law. Almost every speaker seemed to agree on three
reasons why it was necessary at this time to defend the Federal
Labor Law. 
     
     First, they argued, the proposed reforms are actually aimed
at legalizing the flagrant violations of the federal law that
occur daily in the country.

     Second, any changes in the labor law will only contribute to
the acceleration of the corporate drive for "flexibility" of the
Mexican workforce. Specifically, it was pointed out by
several speakers, overtime pay, workers' hours, and pensions are
all threatened by proposed changes in the federal labor law. 

     Finally, many of the assembly speakers expressed the fear
that with a new neoliberal inspired labor law will come adverse
social changes like more competition between workers based on
productivity and "merit" pay raises, as well as the end of the
right to form unions and strike.

     In the afternoon, the assembly broke into twelve afternoon
workshops divided by region. Perhaps only 300 to 500 people
attended the workshops which focused on the ANT's "principles of
unity." Many of the discussions in these workshops revolved
around tactics that should be adopted by the workers' movement as
well as arguments between various political tendencies over
principles and strategies. 

     Some who attended the workshops argued against working with
the "official" or government-supported unions in trying to defeat
labor law "reform." Others believed that it was necessary to find
common points of unity even with the most conservative union
forces in the country in order to succeed in preventing any
significant changes in the labor law. These discussions,
sometimes over arcane political points, dragged on and took some
of the initial energy out of the assembly.

     The ANT plans to hold a second national assembly, and to
organize demonstrations against reform of the Federal Labor Law
and over other issues. 
     
     Hector De la Cueva, the coordinator of Center for Labor
Investigation and Union Consultation (CILAS), felt that the
assembly was a success. "In spite of the organizational
problems," said de la Cueva, "the assembly was a step forward for
the workers' movement. It was an advance because it put the
discussion of union democratization out front." 

     However, de la Cueva was also of the opinion that in the
midst of a Mexican economic and political crisis it is not enough
just to oppose labor law reform. There must be, he suggests, a
program to organize and motivate a real labor movement throughout
the entire country. At this point, however, the discussion of a
broader program for the entire Mexican working class was not on
the agenda. 
                              ###

          UNEMPLOYMENT INSURANCE FOR MEXICAN WORKERS?
                         NOT VERY LIKELY

     The discussion of the reform of the Mexican Federal Labor
Law (LFT) has raised a host of issues: sexual harassment in the
workplace, labor union rights for agricultural laborers, the
question of part-time and temporary work, and, probably most
important, the right of workers to form genuine independent
unions without the approval of the ruling party or the state. 

     But among the many issues which has been raised is that of
unemployment insurance. At present, unemployment insurance does
not exist in Mexico, though the government claims it provides
about 500,000 scholarships each year for re-training. 

     At present when Mexicans loose their government or private
sector jobs, they often move into the informal or underground
economy of business which pay no taxes, have no unions, and enjoy
no social benefits such as health insurance or pensions. The
National Survey of Employment conducted by the Mexican Secretary
of Labor in 1996 found that about 60 percent of the economically
active population, that is about 20 million Mexican workers,
worked in the informal economy and enjoyed no benefits. 

     The Congress of Labor (CT), the umbrella organization that
brings together all of the "official" or pro-government unions
which support the Institutional Revolutionary Party (PRI), has
even put unemployment insurance in its official proposal for
labor law reform.

     While the CT's call for unemployment insurance is mere
propaganda, a demand which it has no intention of fighting for,
the reaction from the government and the employers has been
instructive. Under-Secretary of Labor Pablo Reyes Pruneda
rejected the idea, arguing that the funds for such a program just
do not exist, but also suggesting the risk that some people might
take advantage of unemployment insurance who really did not need
it. 

     Similarly, Vicente Yanez Solloa, the head of the National
Chamber of the Manufacturing Industry (CANACINTRA), says
unemployment insurance would be a disaster. Where, he asks would
the funds come from? Mexicans, he suggests are not yet ready for
unemployment insurance, not mature enough. He and his association
are pushing for more flexible labor agreements.
     
     So, as a new phase of the Mexican economic crisis unfolds,
Mexicans have been told by their government and their employers
that, unlike workers in Europe, Canada or the United States, they
are too immature to be trusted with such a social benefit like
unemployment.
                              ###                 

                    VOLKSWAGEN WORKERS SETTLE
                  FOR 21 PERCENT WAGE INCREASE

     The Independent Union of Volkswagen Workers (SIIAV) at the
Puebla, Puebla plant in central Mexico have negotiated a contract
providing for a 21 percent wage increase, plus another 7 percent
in benefits. The agreement affects 12,760 workers.

     Workers at the lowest level earn 99.12 pesos per day (10.2
pesos=1 U.S. dollar), while the highest paid workers earn 257.2
pesos per day. In addition workers receive other payments, such
as 272 pesos per month toward the purchase of basic goods, and a
one time only payment of 149 pesos towards the purchase of school
supplies.

     VW has also announced that it will be investing one billion
dollars in its Mexican operations in the next four years.

                              ###

               GENERAL MOTORS CLOSES MEXICAN PLANT

     General Motors' Delphi Automotive Systems subsidiary has
closed its Villa Ahumada plant about 60 miles from Juarez,
putting 300 people out of work. The company claimed the plant had
to be closed because it did not have the technology to produce
the new lighting systems.

     With about 80,000 other workers in Mexico, General Motors
remains Mexico's largest private sector employer.

                              ###

               MEXICAN PETROLEUM INSTITUTE WORKERS
                  SEEK 45 PERCENT WAGE INCREASE

     The Union of Workers of the Mexican Petroleum Institute
(IMP) is seeking a 45 percent wage increase according to its
general secretary Francisco Javier Casas Hernandez. IMP provides
engineering and technical services to the Mexican Petroleum
company (PEMEX). The union, which represents 1,252 workers,
claims that productivity has double in the last two years.

                              ###

                    NATIONAL UNIVERSITY UNION 
                 DEMANDS 50 PERCENT WAGE INCREASE

     Augustin Rodriguez, the general secretary of the Union of
Workers of the National Autonomous University of Mexico (STUNAM)
has announced that his union has filed a strike notice with the
Board of Conciliation and Arbitration. The union is demanding a
wage increase of 50 percent and benefit increases of about 20
percent. 

     Rodriguez, who is also one of the three top leaders of the
National Union of Workers, says that workers need such a wage
increase to keep up with the rising cost of living. STUNAM is one
of the largest independent unions in the country.

                              ###

END PART I, MLNA, SEPT 2, 1998 BE SURE YOU HAVE PART II


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