November 19, 1999

Miners Strike Shows The Human Cost of Economic Reform

EDITOR'S NOTE: The Cananea copper mine, less than an hour from the U.S. border, was a symbol of the conditions that led to the Mexican Revolution in 1906. This year, the same mine again presents a rich example of unfairness, only this time its owner is operating with blessings of the government. This article was written in April 1999, but was held for publication to coincide with El Dia de la Revolución Mexicana, November 20th.


By David Bacon

CANANEA, SONORA — In these mile-high mountains just 25 miles south of the Arizona border, over 2,000 miners have been locked in a bitter industrial war since mid-November, 1998.

Here Grupo Mexico operates North America's oldest — and one of the world's largest — copper mines. The town, Cananea, a small, dusty community of 30,000, occupies an almost mythic place in the story of the Mexican Revolution.

In 1906, the mine's U.S. owners paid Mexican miners less than they paid to white supervisors brought down from the north. Cananea miners went on strike, demanding 5 pesos for an 8-hour day and an end to the lower Mexican wage.

After they were attacked by Arizona vigilantes, workers took up arms and were bloodily put down by then-dictator Porfirio Diaz. In Mexican public schools, children learn of Cananea as the opening shots of what became the Mexican Revolution.

Last November, history seemed about to repeat itself. The mine was paralyzed by a strike — a strike called to protest plans to eliminate the jobs of 700 of its 2070 blue-collar employees.

This time, however, their enemy was not a foreign owner but one of Mexico's wealthiest industrialists, Jorge Larrea, a primary beneficiary of government economic reforms. Larrea's planned job cuts were the logical result of a government policy of privatizing Mexican industry, downsizing its workforce in an effort to increase investment incentives. Cananea strikers directly challenged this policy.

Larrea's industrial empire has grown rapidly through his close friendship with past-President Carlos Salinas. Under Salinas, the Mexican government sold Larrea the Cananea and other copper mines, railroads and heavy industrial enterprises, often at a fraction of their book value. Larrea was one of 13 Mexican financiers who became billionaires during the Salinas administration.

The enterprises acquired by Grupo Mexico have been rocked by conflict over drastic job cuts. In 1997, Larrea bought the 6,521-kilometer Pacific North Railroad, in partnership with Pennsylvania-based Union Pacific. Last summer, workers throughout northern Mexico mounted a series of rolling wildcat strikes over plans to reduce its workforce of 13,000 by more than half.

The copper strike was provoked by a company announcement that it would lay off 435 workers and close four mine departments. Grupo Mexico's mines account for over ninety percent of copper production in Mexico, one of the world's ten largest producers of the metal. When the company took over Cananea in 1991, in partnership with a U.S.-based firm, its workforce numbered over 3300. In six years, the mine workforce was reduced by 1300 jobs while production increased. Striker Javier Canizares says these job cuts came when the company subcontracted construction and maintenance operations. "Two U.S. companies, Road Machinery and Allison Parks, have brought in hundreds of workers under temporary 28-day contracts from southern Mexico," he explained.

Section 65, the Cananea miners' union, has a militant reputation, and wages among the highest of the country's industrial workers — between $8-12 an hour.

Gabino Paez Gonzalez, a Grupo Mexico executive in Mexico City, confirmed that subcontractors now perform many operations using contract employees whose wages are only a fraction of the permanent employees they replaced. Under Mexican law, workers don't achieve permanent employment status and union rights until they have been on the job for 30 days.

After miners struck against the job losses, the government threatened armed intervention to force workers back to their jobs. On February 13, miners went to their job sites in the vast pit, to hold it against the arrival of replacements, escorted by troops. Meanwhile, four convoys of Mexican soldiers began moving toward the town and more than 300 heavily-armed members of the state Judicial police took over the streets.

With violent confrontation in the air, local union president Manuel Romero, Cananea mayor Francisco Garcia, and police and army officers entered the mine appealing to the miners to leave. Fearing the prospect of armed battle, the workers gave up their occupation and ended the strike.

In the days that followed, more than 120 strike leaders were turned away as they tried to report back to their jobs. Hundreds more were permanently laid off and their jobs eliminated.

Section 65 is just the last in a string of gutted unions. While 75 percent of the workforce in Mexico belonged to unions three decades ago, that percentage is now less than 30. In the state-owned oil company, PEMEX, union membership still hovers at 72%, but the unionization rate of the collateral petrochemical industry fell to 7% as it was privatized over the last decade-and-a-half.

After two decades of economic reforms, the Mexican workers' income has lost 76% of its purchasing power, and the number of Mexicans living in poverty has risen from 20 to 30 million. While government estimates put unemployment at below 6 percent, Mexico's new independent union federation, the National Union of Workers (UNT), puts it at 25 percent.

Gema Lopez Limon, professor at the University of Baja California in nearby Mexicali, concludes that "our government and corporations are using privatization to do away with unions entirely, as they've sought to do with the railroad workers, and now the miners here in Cananea. Poverty is increasing rapidly. For unions and poor people to survive, they will have to be much better organized, and seek greater international support."

David Bacon writes widely on immigrant and labor issues.

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