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Quelle: Mexican Labor News and Analysis, Vol. 5 Nr. 2
http://www.igc.apc.org/unitedelect/

Making History: The 2000 Volkswagen Strike

by Michal Kohout

[The independent union at the Volkswagen plant in Puebla, Mexico won an important victory at the end of August when the company agreed to a 13 percent raise, a 5 percent productivity bonus and a 3 percent increase in benefits. Under the old contract, VW workers made $2.30 an hour, while under the new agreement they will make almost $2.80 an hour. They were and remain the highest paid autoworkers in Mexico. Our Mexico correspondent Michal Kohout tells the story below in full. - ed.].

On Friday August 18 workers at Volkswagen in Puebla went on strike demanding a 35% wage increase plus 7% in benefits. Volkswagen countered with a 9.2% total offer. During the next week the union would be pressured by the Mexican government and the company to accept the low increase. It would bend, but not break and through its newfound solidarity would emerge victorious. History would not repeat itself.

After more than 30 years of existence, the Independent Union of Volkswagen Workers (SITIAVW) became strong enough to successfully challenge one of the most powerful companies in Mexico. In the 1960's the union belonged to the CTM, but since 1972 it is an independent union belonging first to the Union of Independent Workers (UOI) and since 1992 to the Federation of Unions of Companies of Goods and Services (FESEBES). The union also belongs to the independent labbor federation, the National Union of Workers (UNT), which is not officially registered with the Ministry of Labor, but is nevertheless a powerful agglomeration of more than 200 unions. These alliances would prove to be instrumental in aiding the union to believe in itself and unite its members in the face of an all out assault by corporate and state interests.

VW: Corporate Power

On the other side of the picket line, Volkswagen has been in Puebla since the 1960's and is recognized as a leader in the automotive sector. Its productivity levels are among the highest in the world. Each day the Puebla factory produces 1,500 cars worth approximately U.S.$5 million. This year it was set to break the record and produce 430,000 units. Last year Volkswagen Mexico made approximately U.S.$5 billion mostly through a 32% jump in exports. The principal models manufactured in the Puebla plant are the New Beetle (manufactured only in Mexico), Golf convertible and the Jetta, most of which are exported to the U.S., Canada, and Europe.

Volkswagen's great cost advantage over other car manufacturers in Mexico is its cluster system of suppliers in a close-by industrial park. There are 82 of these suppliers, 53 of which are owned by foreign capital, and most of whom are not unionized. According to Huberto Juarez an economist at the Autonomous University of Puebla and an expert on the automobile industry in Mexico, these suppliers pay on average 40-50% less than Volkswagen, thus generating substantial savings for the company whose workers now assemble mostly prefabricated parts from the suppliers. Sixty percent of the New Beetle, for example, is manufactured outside of the plant. As a result the company has shed about 8,000 workers since 1990 and has reduced labor costs from 10% to 3.7% as a percentage of total costs since 1996, according to Juarez.

Juarez offers an interesting comparison of labor costs in the industry. In 1992 10% of the cost of building a car went to pay workers in Mexico compared to 15% in the United States. Today these numbers have been reduced drastically to 4% in Mexico and between 10 and 12% in the U.S., indicating that manufacturers are relying more on suppliers to manufacture parts. The year 1992 marked a watershed year for the production process in Volkswagen since the company was able to rescind all individual contracts, due to an intra-union conflict arising from workers' confusion over the collective contract, and rehire the entire workforce. Unopposed by the union, the company established a process of flexible regulation on the shop floor with team concept and earnings pegged to production. Bilateral relations with the union disappeared and the collective bargaining agreement was weakened.

Government Support for VW

The loyal support of the federal and state governments is a source of much power for Volkswagen. "The government of Puebla is nothing more than a voice box for the company," claims Juarez, adding that "the Archbishop of Puebla proclaimed the strike a sin akin to abortion." The Ministry of Labor is also very responsive to Volkswagen's needs. Its Federal Labor Board (JFCA) judged this year's strike to be illegal because the workers raised their red and black strike banners one minute before the designated legal time. The union itself was "surprised by the government's tactics because it disqualified the strike for such a trifling reason," says Jose Luis Rodriguez, the general secretary of SITIAVW. Although he concedes that "the union feared that the strike might be deemed illegal at that point in the negotiations because talks broke off and Volkswagen was very much opposed to the union's petition."

As opposed to 1992 when the government used similar tactics to divide and subsequently destroy the union, this time the workers showed restraint and returned to work on Wednesday, August 23 because they did not want to lose their collective bargaining agreement. The union then had to "fight differently - from the inside out," says Rodriguez. Workers turned down bonus hours or extra days of work that the company depends on to meet production targets. Many workers rely on these bonuses to increase their paychecks, but in light of the on-going negotiations these sacrifices became important tools for the union to use to impress its will on the company. In other words the company's precarious production schedules built on overtime and Sunday shifts crumbled under the unwillingness of workers to take on extra work.

Workers' Pressure Company

Those workers not working their shift continued the protests and pressure on the company outside the plant and in the community. Taken aback by the workers' strategy the Ministry of Labor issued a statement urging Volkswagen to begin negotiating in earnest with the workers. The company responded by reassuring all parties that it was willing to continue the negotiations, and extended a new offer to the workers consisting of a 12% pay raise and 2% for bonuses. The union countered that it would not lower its modified demand of a 20% pay raise and 3% bonus raise.

When asked how the union determined its salary increase before negotiations began, Rodriguez outlined a process whereby eight division assemblies (divided geographically within the plant so they contain an equal number of workers) deliberated for 4 months to determine how much they needed to feed and clothe their families and how much they deserved for their world-class levels of production. The union's executive committee aided the workers by presenting studies and a percentage they felt would be justifiable. But, according to Rodriguez, the workers had the final say in the matter and consequently the average percentage of the assemblies was presented as the union's demand 10 days before the contract expired.

Workers also made demands for changes in the collective bargaining agreement based on their expertise. Some objected to the presence of contractors in the factory, others made proposals about the work process itself. A revision committee was formed to gather the workers' ideas and revise the collective contract. In general, the union was defending itself against the entry of contractors who are presently working in the plant and who "have no interest in quality control because they make less and have high turnover," says the secretary general. Asked if the union ever tried to organize these workers, he said that the union makes little effort because the company frowns upon such advances, threatening its contractors and the union that "it will terminate their contracts."

In terms of production, the company's main goal was what came back to haunt them in the 2000 negotiations because workers achieved levels unmatched in both quality and quantity within the consortium. Backed by their impressive production numbers and "vital" international and domestic support from workers in Europe, North America and South America the union felt justified in holding firm on its demands.

Role of International Labor Solidarity

According to Rodriguez, the international backing and pressure on government officials and the company was especially important because it meant that the movement had global support. Labor groups such as the AFL-CIO, the Teamsters, Volkswagen workers in Brazil and Germany, and the UNT sent letters to the Mexican government and to Volkswagen. Even the Confederation of Mexican Workers (CTM) affiliated with the Institutional Revolutionary Party (PRI) sent a letter of support to SITIAVW. Despite the fact that the federal government proclaimed their strike illegal, the SITIAVW was able to mobilize mass support for its cause and realize many actions outside the factory, especially in Puebla and Mexico City. With its UNT allies, many of whom also filed strike petitions claiming violations of their collective bargaining agreements, the union organized blockades of the main highway between Puebla and Mexico City and participated in "plantones" or sit-ins in front of the Ministry of Labor and in front of the plant itself.

Facing increasing pressure, the federal government refocused its attention on Volkswagen. "They slipped up and then had to make up for it," opined Rodriguez referring to the Ministry of Labor's ruling that SITIAVW's strike illegal. "They may have also feared the reaction of Mexican labor as a whole, because the JFCA threatened the legality of strikes as a tool workers can use," he added. Finally the Ministry of Labor made an offer to the company: 20% (12% salary, 5% productivity benefits, 2% benefits, 1% scholarships) that the company and union ratified. Huberto Juarez argues that the offer is actually 15% because the 5% productivity benefits "means nothing." Upon calculating the salary increases from a table provided by the union, the increase is indeed 15%, ranging from U.S.$15 per day ($1.76/hr) to U.S.$39 per day ($4.59/hr). In comparison with other car manufacturers in Mexico the new deal gives Volkswagen workers the highest direct salary raise.

Linking salary increases to production could be divisive for the working class in Mexico, especially when considering that workers employed in the public sector rely on similar tactics in salary negotiations. When prompted on the issue, Rodriguez conceded that there are some risks in linking wage increases strictly to production, but he argued that higher incomes for companies such as Volkswagen generate more taxes, which will trickle down to the public sector. He added that perhaps some sort of a production agreement could raise the level of public services.

Referring to production-salary risks specifically within Volkswagen, Rodriguez believes that most of these stem from the company's inability to share power on the shop floor with the workers. The secretary general expressed hope that a new labor culture, through which all parties seek a consensus based on production, will also mean more decision-making authority for workers. However, he concedes "that companies defend their right to direct," and this becomes an obstacle for equality on the shop floor.

Successful Strike: Three Reasons

Jose Luis Rodriguez feels the strike was a success for three main reasons. First, by decoupling salary raises from inflation and linking them more directly to production the union was able to argue more convincingly for a higher increase. Second, by maintaining internal solidarity and mobilizing large international support the union demonstrated to the government that they should think through their decisions more carefully. "The government bet against the union's ability to defend its position and thought it would settle for the company's offer," Rodriguez said. Here Rodriguez is referring to the government's early posture that it would intimidate the union only to later change its tactics and putting pressure on Volkswagen to negotiate. Third, participation and solidarity of the SITIAVW members were the most fundamental criteria for the successful outcome and ensured that history would not repeat itself.

[Reporter's sources: LA JORNADA, August 19, 20, 22, 24, 26, 31, and September 1, 2000, Interviews by author with Huberto Juarez, Autonomous University of Puebla, and Jose Rodriguez, Secretary General of SITIAVW (September 8).]