A critical contribution to understanding the transformations driven by the 2019 labor reform in Mexico.

Willebaldo Gómez Zuppa holds a PhD in Labor Studies from the Universidad Autónoma Metropolitana-Iztapalapa. As an expert in the field of labor relations in the Mexican automotive sector, in this interview for Jacobin Magazine he provides a critical contribution to understanding the transformations resulting from the 2019 Labor Reform in this sector. The Labor Reform consists of a reform of the Federal Labor Law that sets a historical precedent in a country where corporatist unions or employer protection unions predominate. As a result of the reform all collective bargaining agreements (CBAs) must now be legitimated by a secret ballot vote of the workers, opening the possibility for new independent unions to represent the workers.

Having carried out multiple investigations in this regard and participating side by side with workers’ movements, Dr. Willebaldo Gómez Zuppa details the relevance of the automotive sector for Mexican economic development and warns of the existence of irregularities in terms of the administration of labor justice and simulation in the processes of legitimization of collective bargaining agreements. However, he also highlights the window of opportunity for the transformation of Mexico’s labor regime, while suggesting important lines of action for independent and combative trade unionism. Roberto Sánchez Moreno is a sociologist and graduate student at the University of Buenos Aires.

Roberto Sánchez:  What is the relevance of the automotive sector for Mexico’s economic development?

Willebaldo Gómez:   The automotive sector has been the star industry of the Mexican economy in the latter part of the 20th century and the beginning of the 21st century. It is one of the three manufacturing economic sectors that earn the most foreign exchange, which allows Mexico to stabilize both its trade balance and the balance of payments. It also attracts a lot of foreign direct investment and is a pillar of development. Thanks to this type of investment, we have seen a radical transformation in some regions (initially in the center of the country, then in the northern fringe and more recently in the Bajío). Therefore, it is a strategic sector both for the generation of foreign currency, as well as for its link with the outside world and its technology transfer in production processes.

RS:  What is the reason for the entry of new manufacturers of vehicles and auto parts and the opening of new plants?

WG:  There are four critical factors. The first is the proximity to the most important market in the world in terms of automotive consumption, the United States. Mexico’s participation in this trade bloc – which is now governed by the USMCA trade agreement – provides an important advantage and opportunity for automakers. The second element is that Mexico developed its automotive industry almost a hundred years ago. The first recorded manufacturing facility was in 1925, with Ford in Mexico City. This long trajectory has made it possible to develop and train skilled workers.

The labor cost factor has also been critical. As the industry grew, the qualifications and competencies of Mexican workers developed, but the costs were not comparable to the costs of labor in the United States and Canada. So that differential in labor force costs, the remuneration to the workers, is a great attraction for the industry. In Mexico, you have skilled workers with growing technological experience who are familiar with new technologies and whose cost represents, in some cases, a tenth of what workers with the same skills and abilities would earn in the United States or Canada.

The third factor that I would identify is the promotion of foreign direct investment. Very low land costs, a chain of suppliers that operate throughout the country, communication routes that practically had the intention of connecting these production centers and, well… everything that has to do with the forgiveness of taxes for corporations that would set up in the country. Not only did the low cost of the land count, but practically all the services were provided by the Mexican state at its different levels: federal government, state government or municipal government, in order to attract this type of investment.

And there is a fourth element that I hope will be transformed in these years, which is the “labor peace” derived from the corporatist union model. The corporatist unionism that in its inception privileged sectors of the working class gradually degenerated into a unionism of employer protection and social control, which practically guaranteed employers a free hand in labor relations. This meant stability in terms of planning for corporations.

RS: Why have a high percentage of collective bargaining agreements in the automotive sector been legitimated?

WG:  In the case of the automotive sector, this is linked to the simulation of labor relations in Mexico and the social control exercised by the corporatist unions. When fieldwork is carried out in the different production settings, we observe that the vast majority of workers do not know their unions, do not know their representatives, do not know the leaders, do not know the collective agreement and do not know their fundamental rights. This allowed the vast majority of automotive corporations, both assembly plants and auto parts plants, to ensure that the corporatist unions could legitimize the CBAs, often without the workers’ knowledge. There is empirical evidence of this: in many places, many plants with 1,500, 2,000 workers, the CBA was legitimized with the participation of only 200 workers.

In that sense, yes, the automotive industry as a sector has managed to legitimize 95% of the contracts. The remaining 5% represents those iconic conflicts that have been widely publicized: the case of General Motors in Silao, the case of St. Gobain in Morelos, the case of the workers who grouped together in the SNITIS 20/32 Movement in Tamaulipas. In these few areas, the workers voted not to legitimize the collective agreement, and even changed union representation, building new organizations.

RS: What are the main irregularities that have occurred in the processes derived from the labor reform?

WG:  I would distinguish two. On the one hand, the issue of legitimation; on the other hand, the administration of labour justice. In the case of legitimation, we have encountered a lot of simulation. The protection unions control the process from start to finish. They go, paste the announcement of the vote, leave it for twenty minutes, take pictures of it and take it down. They don’t inform the workers what it means, they don’t distribute the CBAs so that the workers know about them. Many times there are no labor inspectors to check compliance with the election protocols. And of course the employers help them by repressing any dissidents.

I was at General Motors in Silao for the first attempt to legitimize the CBA. We were accredited by the Ministry of Labor to be observers, but we were forcibly evicted from the factory, and there was not a single inspector from the Labor Department. We were outside all that day, and the inspectors didn’t arrive until that night. That is, they gave the incumbent union twenty-four hours to conduct the election without interference or supervision. When the inspectors finally arrived, they found the ballot boxes were broken into and ballots destroyed, and they had to suspend the first round of voting. We have observed similar irregularities in different places.

In the case of labor justice, we have the problems that plague the new institutions, the labor tribunals, that are just starting to get underway. There are no experienced personnel, the judges that exist come from civil, criminal or family matters, and when they come to the labor issue, well, they come with interpretations that do not conform to reality. We do not have regulations or secondary laws, for example, for the election of new union officers, which is an essential process. Thus we have severe problems of few human and material resources in the administration of labor justice.

The other element is that everything is very new, and therefore there is little capacity to solve the multiple problems that arise. There are problems, such as a demand for replacing an incumbent union representative that can take up to eight months to be resolved; when there are unjustified dismissals, it takes four or five months before a judge begins to review them, and during all this time the workers are left unemployed and without remuneration.

The practical implementation of the labor reform is a severe problem. I hope that in the short term there will be rapid progress so these difficulties can be overcome. In the case of simulation and non-compliance, it will be very important that complaints follow one another to change this situation.

RS:  What are the main challenges faced in the sector for the creation of new democratic and representative unions?

WG: Well, that’s a great topic. It has been widely theorized that the low power of Mexican trade unionism is due to its atomization. Even for the biggest corporatist union, the Confederation of Mexican Workers (CTM), each and every one of its plants has a different collective agreement. In the case of independent trade unionism, there is the concern that workers will push for unions on a per-plant basis, which would mean continuing down the path of fragmentation. There’s a big risk there; I think the task of looking for shared trajectories should be taken very seriously. That means generating agreements between the trade union political actors who are opposed to the CTM and who are active, an issue that falls more than anything else on independent trade unionism.

Independent trade unionism must be made more visible, not in the eyes of the national and international press, not in the eyes of the government, but in the eyes of the workers. The workers must see them as an option, and say yes, we can join, we want to join this union grouping that is radically different. To this end, independent trade unionism must innovate in trade union approaches, it must put democracy, horizontality, broad vision and the study of the sector at the center in order that the trade union can actively participate in the transformations that are coming.

There are three very important tensions. One of them is the technological trajectory: productive restructuring processes are taking place, for example in the growth of electric mobility, and the worst thing that independent trade unionism can do is oppose change to protect what little it has. The second is a change in the world’s productive geography that includes Mexico. Which sectors are going to increase their production, which sectors are going to decrease it? Independent trade unionism has to be aware of these processes. Finally, it must pay attention to the realities that derive from the labor reform and the labor chapter of the USMCA.

Faced with these three tensions, independent trade unionism has to plan strategies. It is therefore not only a matter of making themselves visible to the workers, but also of innovating in their union management approaches and putting the issue of democracy and horizontality at the center in order to compete and show that it is a different trade union model. If independent trade unionism does not achieve this, I think we will have a very short spring: a trade union spring in which several organizations appear that try to build themselves on the margins of the CTM but end up entrenching bureaucracies, or never manage to present themselves as an alternative for the workers and, over time, disappear. 

RS: Are there unions that today serve as an example for grassroots organizing in the face of the new labor relations?

WG: I think so. At the national level there are great examples of workers’ organizations, of genuinely left-wing unions, with horizontality and participation of workers in decision-making. On the national stage, I would place the SME as a benchmark. In the the automotive industry there are two unions that have become icons for their trajectories, for their struggles: one is the Volkswagen union, which has been independent for more than 50 years, having left the CTM. The other is the Nissan Morelos union, which has just under 50 years of independent history. Both have consistently negotiated the best contracts in the industry. Thirdly, there is Audi, which is a great reference because it is a new company where the workers very quickly achieved high productivity, and established an independent union.

More recently we have seen the emergence of SINTTIA, a union that the rank and file workers built and organized themselves; then after a very strong struggle against the CTM (against the most important auto industry union of the CTM, the “Miguel Trujillo López Union” controlled by the PRI Senator Tereso Medina) managed to win by a very wide margin and followed up by negotiating a collective agreement that far exceeds the previous one negotiated by the CTM. After successful wage negotiations, SINTTIA managed to break the barrier that had been established in the automotive industry, that no one could have an annual salary increase above 10%. I believe that these are unions that can become references for the rest of the workers.

RS: What opportunities does the labor reform present for the automotive sector in the future and what issues remain to be improved in terms of labor legislation in Mexico?

WG: I think that this opens up a certain perspective for workers to change their wages, which have been suppressed and are very low – ten percent of US and Canadian wages – as well as benefits and freedom within the production process itself. A great space is opening up for bilaterality. That opportunity cannot be wasted. On the part of the unions, negotiating working conditions, seeking greater well-being for workers and their families, I believe, is the great challenge. It is still very early from my perspective, but I believe that in a couple of years we will be able to clearly observe whether there has been a radical change in that sense and assess more accurately the scope of the labor reform.

With regard to what remains to be improved, I think there is a lot, starting with the supervision of the reform and its implementation. The process of legitimation of contracts will end in September 2023, but there is still a battery of rights to improve. There is also the issue of the delivery of labor justice. We need more qualified judges and inspectors, with more mastery of the specificities of the field, who understand that the actors have a power differential. If a worker sues a corporatist union, they cannot be treated as an equal actor, because the corporatist union leaders have a lot of economic power and a lot of political control; while the workers are on the margins. If a worker sues a corporation, the great mistake of liberal law is to think that all citizens are equal; but they are not. There are great differences both economically and politically, and I believe that this inequality has to be recognized in the legislation, which will imply further reforms or the incorporation of secondary laws into the labor reform that will establish a much more accurate framework for action, that provides certainty, and that is not left to discretion.