The Runaway Shop

In North America, few places have come to symbolize the transformation of economic development in the neoliberal era more intensely than at the border between the United States of America and Mexico. As international economic integration remade the national developmentalist projects of the postwar era, Mexico followed much of the developing world in increasingly turning to export markets rather than domestic consumption spending as the engine of economic growth. With global demand limited to a small number of high-consumption countries, manufacturing became a hyper-competitive industry. Governments that once promoted collective bargaining and internal redistribution turned to repressing wages and lowering taxes to earn diminishing shares of the value of final products.

The maquiladora has become the symbol of this transformation. But alongside these changes in modern production and cross-border trade, the growth of manufacturing in Mexico has produced some of the most militant labor organizing on the continent. Since 2019, when the Mexican government strengthened its collective-bargaining laws, organization has spread across the continent’s workshop.

Jeffrey Hermanson, a labor organizer who began his career with the International Ladies Garment Workers Union (ILGWU) during the late 1970s, witnessed these events first hand. Following the migration of the textile industry after the passage of NAFTA, Hermanson worked in Mexico as a representative of the AFL-CIO Solidarity Center from 2000 to 2003 and later served as the director of global strategies at Workers United-SEIU. He has lived primarily in Mexico since 2019, when the Solidarity Center appointed him Director of Organizing in Mexico, a position from which he retired in 2022.¹ Phenomenal World spoke with Hermanson about the evolution of North American manufacturing and its creation of a new working class in the export industries of Latin America. The following interview has been edited for length and clarity.

An interview with Jeff Hermanson

Andrew elrod: What is a maquiladora today, after NAFTA?

Jeff hermanson: The word maquila means mill—it refers to a subcontracted labor-intensive process. From the 1980s, unfinished goods were shipped across the border from the US and shipped back, but they initially couldn’t be sold in Mexico. Today, a maquiladora is basically a separate tax regime. There are industrial parks all over Mexico, but you don’t have to be in an industrial park to be a maquiladora. The maquiladora incentivizes foreign direct investment by lighter taxation and allows for negotiation with the local authorities for land and other utilities, water being one of the most crucial.

The maquiladora largely established itself in large factories on the US-Mexico border in the early years of NAFTA. The factories were well capitalized, and workers came for the jobs from all over the country to settle in poor communities they built themselves. I visited a free trade zone, or industrial park area, a few years after NAFTA was passed and saw really poor conditions, with low wages that were insufficient for supporting human life. The houses were built out of pallets. There was a song, “Techos de Carton,” about people living in cardboard shacks in Mexico. Electricity was brought in with homemade attachments to electricity lines overhead, and with wires all over the ground to run into these houses. The dirt streets turned to mud when it rained. This was a barrio obrera in the late 1990s.

Prior to 2018 and the Morena government, it was widely known that these companies were given land for free as well as tax concessions. For ten years, they wouldn’t have to pay any tax on the land or the buildings. They also received special deals on energy and water.  With Morena, concessions for maquiladoras have been revised to equalize the tax rate with other companies, rather than giving an unfair advantage to a foreign invested firm. Maquiladoras have been required, more and more, to meet the same regulatory requirements as any company. There’s still favorable treatment of big investments. Nestlé, for example, just announced a $400 million investment in Chiapas, and they will receive favorable terms on the use of water. Here in my local community, there is a maquiladora making sweatshirts and hoodies for Fanatics and Columbia Sportswear, which has a special contract for the use of water. In an area where water’s at a premium, they get a relatively good price, and they use a lot of it to dye and launder garments.

AE: The phrase “runaway shop” was commonly used during the fifties and sixties, much earlier than “deindustrialization” entered the conversation. How has that concept changed over time with the rise of the maquiladora, NAFTA, and what we call neoliberalism?

JH: During the fifties and sixties employers were running away from the Northeast and Midwest to the US South and Puerto Rico, which was much less unionized and had much lower wages. In garment manufacturing, where I began organizing for the International Ladies’ Garment Workers Union (ILGWU, or ILG), the core of the US industry had been New York City, Philadelphia, Chicago, and a little bit in Canada. But in the fifties it all started moving south.

In 1965, the Congress passed Item 807, which is part of the US Tariff Schedule.² This permitted garment manufacturers to cut goods in the United States, send the pieces to the Dominican Republic and other Caribbean sites to be sewn together and then export it back to the US duty free. By the late 1980s the Dominican Republic became the site of free trade zones employing a couple hundred thousand workers sewing apparel for the US market.

Hosiery and other intimate apparel had been in the upper US South, already on a runaway from the northeast. In the seventies and eighties, these companies set up their factories in Puerto Rico. From there it was a short jump to Central America. This was the next phase, which was pioneered by the intimate apparel industry: Maidenform, Fruit of the Loom, and Hanes are the big three. Underwear manufacturers moved primarily to Honduras and El Salvador. Those companies were more capital intensive— knitting, cutting, and sewing were all integrated in big factories owned by the manufacturers—and they moved their whole shops, with Honduras being the industry’s geographic core.

Other parts of the garment industry did the same thing on the southern border with Mexico. Prior to NAFTA, there was a twin-plant system, a cutting factory on one side of the border and a sewing factory on the other. Calvin Klein jeans, for example, were cut in a union shop in El Paso, Texas, then sent to Durango and Coahuila in Mexico to be sewed together and imported back under Item 807. With NAFTA, the need to cut garments in the United States was eliminated.

AE: When did you begin working with the ILG?

JH: I started with the ILG in 1977, at the beginning of the offshoring process. We organized a strike in 1979 against a sportswear firm in New York City, and one of the workers, a Dominican cutter, told me that the cut goods were being shipped to the Dominican Republic. That was new for him, and he was shocked. That was the beginning of offshoring, and it grew by leaps and bounds during the eighties.

The union had a slogan, “follow the work.” We followed the work, out of New York City into Pennsylvania and beyond. But when we went to the South, it became much more difficult because of the racial divisions in the workforce and employers’ use of those divisions to defeat unionization efforts. We organized Kellwood in Mississippi, a big firm owned by Sears that employed thousands of workers. We followed Calvin Klein to El Paso, Texas, and organized the factory there. We had several other successes in the South, but it was more difficult than in the Northeast.

In 1990, the Dominican Republic passed a new labor code under pressure from the AFL-CIO. The Dominican unions came to the US and asked for assistance in organizing workers in the free trade zones, which their government had set up specifically for this work. At that time, there were already over 100,000 Dominican workers in those free trade zones producing apparel for the US market. We went to the Dominican Republic, trained about twenty organizers, helped the Dominican union organize ten or eleven factories—over 10,000 workers—and built a strong garment workers union in the Dominican Republic, which still exists. All these factories were producing for US brands. But with NAFTA, we basically lost control of the industry. The whole process, rather than just the sewing, was now done in a maquiladora. We were not able to follow the work into Mexico at that time.

AE: You mentioned a change in the US tariff code to enable this kind of business. What were the changes in the laws of the other countries?

JH: From the forties through the seventies, Mexico followed an import substitution model, which emphasized local production and national producers. Quite a few of them were state-owned. Even in the auto industry—trucks, buses, and agricultural equipment were produced in state-owned enterprises. That model began to exhaust itself in the late seventies and early eighties. There was an external debt crisis, and neoliberalism became the ideology of international trade and investment—the Washington Consensus, Thatcher, and Reagan. This required changes in law in Honduras and  Central America—where the intimate apparel industry had already relocated production—and in the US. The Caribbean Basin Initiative, for example, enabled these industries to invest internationally in response to the competitive pressures that existed in the US.

In Mexico, this meant the sale of the state-owned enterprises, the privatization of production generally, and the end to as many trade barriers as possible. The maquiladora was the first step in that process. A very strict trade regime initially prevented maquiladoras from competing with local firms. But when those restrictions were lifted, many were pushed out of business.

The story differs from industry to industry. The auto industry, for example, has a long history in Mexico. Ford has been in Mexico for a hundred years and has developed an internal market for their product. In textile and apparel, there are still domestic firms that produce entirely for the Mexican market. Even in steel and heavy industry, there’s part of the market that is truly producing for domestic consumption. Because of Mexico’s historic national economic model, many did not agree with this loosening of the regulation of import and export. But they were a minority, and the political forces were such that regulations became looser and looser.

AE: When was the first time that you went to Mexico?

JH: The first time I went to Mexico was in 1994, when NAFTA was passed. Prior to NAFTA, the national textile and apparel industry was quite strong in Mexico. They produced the textiles in fairly large modern plants and had an industry-wide labor agreement for the textile sector. It was unionized and prosperous, and the union contracts were fairly good.

That has been totally undermined by the competition with garments made in maquiladoras. But even more today, the Mexican garment industry has been undermined by import competition from Chinese-produced garments. That national industry has been decimated, and the conditions are in grave decline.

AE: What is the labor law in Mexico as it relates to labor organizing? In the United States, for example, unions in the private sector must be certified by a federal agency, the National Labor Relations Board (NLRB), to enjoy legal protections. Workers have organizing rights without a certified union, but these are also enforced by the NLRB. In Brazil, there was a long tradition of union jurisdictions being written into law, and the representatives being funded through a special labor tax, a kind of “dues checkoff” through the state. What is the Mexican labor regime?

JH: From the mid-1930s up through the 1990s, Mexico’s was a “corporatist” labor relations regime: the government supported the organization of workers into big national industrial unions and a confederation of those unions, which became a pillar of support for the political party, the Partido Revolucionario Institucional (Institutional Revolutionary Party, PRI). The Confederación de Trabajadores de México (Confederation of Mexican Workers, CTM) was formed during that period in the late thirties—like in the United States, at the time of the Wagner Act and the growth of the Congress of Industrial Organizations—when millions of workers organized under a fairly favorable labor law.³

The CTM unions mainly covered workers in those sectors that were either state enterprises or quasi-state enterprises, like the electrical energy industry, the petroleum industry (which was nationalized in 1935), telephones, steel, mining—all these big national basic industries. Those unions in turn supported the political party, providing privileges to the organized segment of the industrial workforce. This approach, incorporating labor unions into the political structure of the state so they become “official unions,” is called corporatism.

AE: That sounds very similar to the US and other labor-aligned political parties of the mid-century—the government supporting large industrial unions with an implicit or explicit political agreement that those unionized workers would then support the government. To an important extent, that’s the story of Franklin Roosevelt and the CIO. What is the importance of understanding this as “corporatist,” as a regime of a different type to the US?

JH: The biggest distinction is that in the US the CIO was organizing private enterprise, privately owned industries. In Mexico, a lot of the industries were state-controlled, either state-owned or operated—petroleum, electricity and telephones—and their workers were public-sector workers. Teachers, for example, still make up the largest union in Mexico.

I’ll also point out that the union activists who led the formation of these unions were communists and anarchists and socialists. But the government was not a socialist government, although they did nationalize industries. There was, consequently, a very tight political control over the organizing of the industries and the unions. Legal certification was determined, and disputes were settled, by a federal board and the Local Boards of Conciliation and Arbitration, which were tripartite in structure: the government, the employer, and the unions appointed these boards. It was a condition of membership in the union to be a member of the PRI. When there was an election, the union would organize buses to take the workers to the polls, or to demonstrations in favor of the candidates. It was a very tightly controlled corporatist labor movement (incorporated into the political structure), and in the US there’s nothing like that.

AE: Except during the 1930s—“Franklin Roosevelt wants you to join a union” was a big part of the 1936 election. That relationship intensified during World War II, in the 1940 and 1944 elections.

JH: Wartime capitalism in the US approached the corporatist structure. There was the War Labor Board and its sectoral wage-setting boards. That’s quite true. There are similarities between the approach of the Cardenas government in Mexico and the Roosevelt government in the United States. The Democratic Party did want to control the labor movement. They weren’t as able to at first. They were able to get David Dubinsky and John L. Lewis to come to the White House, but John L. Lewis could not be controlled. “You can’t dig coal with bayonets,” as he said. But with the beginning of the Cold War, the US government and employers used anti-communism to pass the Taft-Hartley Act, which weakened the labor movement and halted its growth. Rather than control labor by bringing it into the political structure, in the US the choice was made to control labor by weakening it and subjecting it to regulation.

In Mexico, the period of the “Mexican Miracle” (1940–1970) saw the growth of a narrow, privileged organized sector of the working class in the corporatist unions. They were becoming middle-class workers. But they never amounted to more than a small percentage of the overall labor force, which included millions of rural poor. The privileged position of unionized workers began to break down for a couple of reasons. In the sixties, there were several rebellions by workers against the tight control of the unions, most of which were repressed by the union leaders with the help of the PRI government. In October 1968 the Mexican military, acting at the direction of the president Gustavo Diaz Ordaz, massacred hundreds of protesting students in Mexico City. There were uprisings in the countryside in southern Mexico and in certain urban areas in the north of Mexico, where people began forming guerilla groups. There was an uprising by dissident workers in the Ford plant in Cuautitlan, in the industrial belt around Mexico City, that the incumbent CTM union, colluding with Ford management, put down violently with 300 golpeadores (thugs). The international situation—France in 1968, the US Civil Rights and Anti-war Movements—contributed to the government’s paranoia. There was a sense that revolution was in the air. The government of Mexico treated this as a real threat.

Another factor was the increasing corruption at all levels of the government, the PRI political party, and the trade union leadership. Carlos Hank Gonzalez, one of the most famous politicians in Mexico, had a saying: “a politician who’s poor is a poor politician.” It’s just open corruption. “Quien respira, aspira,” (literally translating to: He who breathes, aspires) is also a saying from the legislator Saúl Monreal, who after jumping from party to party has joined the ascendant Morena.⁴ It became shameless, really.

This combination of the growing, open corruption and repression coincided with the waning of the Mexican miracle in the late 1960s. The union leadership didn’t take action against it, they joined in the corruption. They began to survive on their relationships with the employer and the government, not on their relationship with the workers. Of course, there were also some leftist independent unions formed in the 1970s that organized in the industrial belt around Mexico City.

AE: NAFTA was signed in 1993. What was the motivation for this, given how much integration already existed?

JH: My feeling has always been that, in the US, employer support for NAFTA was a union avoidance strategy. Since the PATCO strike was crushed by Reagan in 1980, the employers continued their attack on the labor movement, and by the mid-1990s they decided they could use Mexico as a low-wage preserve.  In the summer of 1996, my union, UNITE, launched a big strike against Guess Jeans in Los Angeles, where there were 3,000 workers in several dozen small sweatshops.⁵ The strike shut down their production in the Los Angeles area, so Guess picked up and moved their production to Mexico.

We filed unfair labor practice charges with the NLRB, which initially agreed with us that the move was illegal and indicated they would issue a complaint.⁶ But they didn’t, and ultimately found that Guess had been planning this move all along, and therefore it was not a response to the strike.⁷ While it might have been true that Guess had investigated such a move, I truly believe that the Board’s finding was a political decision by the Clinton administration. NAFTA was three years old: they could not penalize a company for moving to Mexico to escape the union, because that would have restricted NAFTA’s implementation. Guess Jeans was a major campaign contributor to the Clinton campaign. We lost that strike: the jobs went to Mexican sweatshops and Guess Jeans prospered.

The complexity of the pre-NAFTA supply chain, at least in the apparel industry, was also a motivating factor for companies to support NAFTA. The nature of the industry was changing. “Full package producers” were beginning to take charge of the total production process. Even some parts of the design process were being done by big contractors in Asia and in Latin America. This was a development in Mexico primarily in the 1990s. A company like Calvin Klein became a design and marketing firm, employing no production workers at all.

That process has continued until the present, facilitated by NAFTA. Calvin Klein, Tommy Hilfiger—these companies are now just names. They have zero production employees. The labels are owned by PVH, which is a company that owns brands and contracts out production throughout the world. This way, they can take advantage of the cheapest labor they can find and avoid any threat of unionization.

AE: How has labor organizing in Mexico shifted with this regional integration before and after NAFTA?

JH: In the West, in Tijuana and Mexicali, there were sweetheart unions, corrupt mafia-controlled unions that made deals with the employer before they even set up business. In Juarez, which is across from El Paso, there were no unions whatsoever and workers organized at the risk of their lives. During the maquiladora boom of the 1990s and 2000s, hundreds of young women workers were murdered and disappeared by criminal gangs—a climate of violence and insecurity in which maquiladora employers’ union avoidance strategy was very successful.

On the east end of the border—Matamoros, in the state of Tamaulipas—there was a union that grew out of the workplace. It was a traditional CTM union, the Sindicato de Jornaleros y Obreros Industriales y de la Industria Maquiladora (SJOIIM), representing around 150 to 200 factories in Matamoros. But its leader, a man named Agapito Gonzalez, was determined to get a good deal from the employers. During the 1980s, he negotiated contracts that won wages significantly higher than other maquiladora regions. They also contained clauses that said wages would be in reference to the minimum wage, so that minimum wage raises would raise all wages under the contract. It was unique in the maquila sector.

Gonzalez has passed away, and his successor Juan Villafuerte has faced some rebellion from workers who feel he is less committed to fighting for their interests. In January 2019, the federal minimum wage on the border was doubled by the new Morena government. Under the Gonzalez contract language, this would have meant doubling the wages of the workers already earning above the new minimum wage, but the union leadership refused to enforce this language. This led to a wildcat strike of 45,000 workers in forty-eight maquiladoras in Matamoros—a huge event after Morena had just come into power.

The employers immediately got the governor to request a federal intervention to stop the strike, as they would have ordinarily expected. But the Deputy Secretary of Labor, Alfredo Dominguez Maruffo, told the employers the government would not intervene. He advised the employers to negotiate. The workers put forward demands for a 20 percent immediate across-the-board increase in wages and a $1,600 (MX$32,000) one-time bonus, calling themselves the “20/32 Movement,” and pressured the SJOIIM to negotiate those terms. After weeks of individual factory negotiations, the workers’ demands were met, and a victory was achieved. Out of that struggle, a new independent union, the Sindicato Independiente de Trabajadores de Industrias y Servicios, Movimiento 20/32 (SNITIS) was formed; and SNITIS has gone on to organize several big factories, including Panasonic Automotive in Reynosa, and Tridonex in Matamoros.

AE: What does it mean to be an independent union in Mexico? In the United States, a union can be not affiliated to the AFL-CIO, but it can still have a board election, it can still have rights in court.

JH: In Mexico, an independent union is a union organized outside the corporatist relationship of the “official unions” (CTM, CROC, CROM, SNTE, et al.⁸) with the PRI political structure. In the 1960s and 1970s, as we were saying, political radicals began the formation of independent unions through direct action, and they were minimally successful. But unions affiliated with the existing confederations and political parties, first the PRI and then the PAN, used their position on the labor boards to refuse registering unions not affiliated with the CTM or other corporatist unions. Sixty years of corporatism have left their mark on workers and would-be independent trade unionists. Many instinctively look to the Mexican state as the principal determining factor in the success or failure of a trade union initiative, which leads them to try and align as closely as possible with the state and the party in power.

Most successful independent unions are in the private sector. Two of the earliest successful independent unions were the Volkswagen Union in Puebla and the Nissan Union in Morelos. Both of them are unions that bargain at the level of the company. To win recognition, they had to throw out an industrial auto workers union that was an affiliate of the CTM and part of the corporatist political structure. How did they succeed? Through direct action, through those wildcat strikes—illegal activities that the state tried but failed to repress.

AE: Did they go for contracts?

JH: Yes. Once Volkswagen saw that they couldn’t operate without recognizing the independent union, they agreed to make a deal. This happened in a number of sectors, including with some of the state-owned companies. Workers at Dina, a truck manufacturer in Hidalgo, also formed an independent union through direct action. This was the only way, because you couldn’t use the legal process to get recognition, and you had to force the employer into enough desperation to ask the government to allow the recognition of the union.

This situation continued through the nineties. When I came here in 2000 to represent the AFL-CIO Solidarity Center, we started supporting a group of about a thousand Mexican workers at a Nike contract factory here in Puebla. The Korean owner who produced sweatshirts for Nike had recognized one of these corporatist unions before the plant even opened. The workers were angry at being forced to pay dues to a corporatist union, the state CROC affiliate, that they had no contact with, and which never did anything for them. The workers formed an independent union and conducted a nine-month strike at this maquiladora. Because it was a Nike factory producing under license from the University of Wisconsin and other universities, there was pressure from the US—from the student activist groups such as United Students Against Sweatshops—to get their universities to cancel their licenses with Nike.⁹ Nike called me and asked me to help resolve the conflict.

AE: How many months into the strike did that happen?

JH: Almost at the beginning of the strike. The CROC state affiliate had got the state government to send in the riot cops to beat up the workers that had camped out in the factory yard, and so the workers all went to their homes and didn’t go to work. People stayed home, that was how the strike unfolded. Both Nike and the maquiladora were desperate.

The company—both Nike and the local contractor—saw me as an ally in their struggle for existence, and I helped them work out a resolution. But first the company had to pay off the incumbent union to the tune of $50,000, and then the contractor had to pay off the government. And of course, the union and government were related: when the Korean contractor wanted to make an investment in the state of Puebla, it was the governor of Puebla who introduced him to the CROC union.

“Mafia of power” is what López Obrador called it, and he was right. This issue of corruption got worse and worse from the late 1960s until Peña Nieto, the last president before Lopez Obrador, who was a pure object of popular contempt. He was blatantly corrupt, and the mass media sold this guy as a president. From 2012 to 2018, people were just so disgusted that they elected a radical, a rebel: López Obrador, whose main political platform was ending corruption and using the funds that were freed up to assist the poor. His slogan was “for the good of all, first the poor”—just the total opposite of the ideology that had preceded him. He has been tremendously successful, so much so that his successor, Claudia Sheinbaum, now has 85 percent popular support.

AE: Have there been efforts to federate, or to form a rival federation, to bring the militant parts of the labor movement to a broader level of organization?

JH: There have been attempts, but the independent union movement in Mexico is ideologically committed to enterprise unions, bargaining at the company level. Independent union leaders and members are extremely suspicious of larger organizations because of their experience with the corporatist federations and confederations. There is a federation of auto parts, aerospace, and tire workers that has ten affiliated unions, FESIIAAAN. But they have not registered as a federation legally. They have no staff, and no dues or affiliation fees. They rotate the president among the leaders of the independent unions every year.

AE: Have independent unions experienced setbacks because of that suspicion of federations? The impetus for broader organization, historically, is that the firms can be put against each other. The militant shop can be punished if it stands alone.

JH: This enterprise union mentality is a serious weakness. The Nissan Union is one of the original independent auto unions, formed in the 1970s at the Nissan plant in Cuernavaca, Morelos. The union negotiated excellent contracts; but in 1982, Nissan set up a plant in Aguascalientes, and since then has opened three more plants, all with a corporatist union, the CTM. That union basically discredited itself by not representing the workers, but the union that eventually challenged and took over the contract, Confederación Autónoma de Trabajadores y Empleados de México (CATEM), is led by Pedro Haces Barba, a former PRI and CTM leader. His patron, Ricardo Monreal, the former governor of Zacatecas, is also a former PRI man, who now sits in the Chamber of Deputies. Barba is trying to replicate that niche for himself within the new political regime of Morena, so the workers are no better off. But Morena has not shown significant support for this—both men have come under significant criticism from Morena’s more progressive figures. Meanwhile, Nissan has been downsizing the Morelos plant, where the independent union is organized, and increasing their production in Aguascalientes instead. The same happened with the VW independent union: VW built an engines plant in Silao and signed a CTM contract before the doors opened, which the independent VW union has not been able to overcome.

AE: How has the USMCA changed labor organizing?

JH: Unlike NAFTA, the USMCA has a labor chapter.¹⁰ One of its provisions required Mexico to reform its labor law and to ratify ILO Conventions 87 and 98, which the US has still not even ratified.¹¹

In 2019, Mexico reformed its labor law to require direct, private secret ballot votes on union representation elections, union leadership elections, and ratification of contracts—a much more democratic system than exists in the US. The independent union movement and its allies—academics, labor lawyers, activists of all kinds—have been supporting this type of reform since the 1970s. Secret ballot was the key consideration, but the elimination of tripartite labor boards is also crucial. There is a new labor justice system under the judiciary, and now, because of a recent constitutional change, the judiciary is going to be democratically elected.

The USMCA labor chapter also has a Rapid Response Mechanism that permits workers or unions to raise complaints with the US Department of Labor if their rights are violated. The Mexican government currently has been responsive to this. Under Biden, the US had good labor secretaries and the US Trade Representative (USTR) was fairly progressive. The US pushed hard for the success of the labor terms of the USMCA, and there were twenty-four cases during the Biden administration that were favorably settled for Mexican workers and independent unions. This really is a huge transformation.

One of the first cases under the USMCA Rapid Response Mechanism was at General Motors in Silao, Guanajuato, an assembly plant of 6,500 workers that produces US$40,000 Silverado pickups for export to the US. Part of Mexico’s USMCA implementation stipulated that existing contracts had to be voted on by workers. When the incumbent CTM union at GM Silao was caught destroying ballots in the first vote, the Rapid Response Mechanism ensured a fair vote. After the contract was voted down, a new independent union, SINTTIA (Sindicato Independiente Nacional de Trabajadores y Trabajadoras de la Industria Automotriz), won a representation vote against two other unions. They’ve been negotiating good contracts ever since. SINTTIA, which has an industrial union outlook, has since won a couple of campaigns in auto parts plants, and they just organized a Bose speaker plant in Tijuana.

AE: Now that USMCA is being renegotiated, what do you think is the best way of improving on this record?

JH: First of all, the USMCA is asymmetric. Mexico is governed by these terms, not the US or Canada. That would be the first thing I would want to see changed. The USMCA is about trade, and the sanctions involve the elimination of the tariff exemption for violators’ products. How would you sanction a US firm? There would have to be a new sanctions regime.

AE: But doesn’t the US auto supply chain involve exports from US plants to Mexican assembly?

JH: Yes, but the provisions don’t currently apply to US firms. They’re meant to “hold Mexico accountable,” which was the position of the US labor movement in the negotiations. In the current process, private parties file complaints with the USTR and the International Labor Affairs Bureau at the US Department of Labor (DOL). These offices conduct a preliminary investigation using their labor attachés in Mexico, of which there are five, to see whether they find a prima facie case of an employer violating labor rights. The rights are under the Mexican labor law and the ILO conventions—which US workers do not have. Why shouldn’t the US reform our labor laws? Why shouldn’t the US ratify the ILO conventions?

If the USTR and DOL find a prima facie case, they ask the Mexican government to investigate. The Mexican government then has a very short period of time in which to see whether they agree with the findings of the US government. If they agree, then there’s a negotiation between the US government and the Mexican government for a remediation plan or for an action plan. This process has been successful in most cases.

But I think it will find diminishing success. The Mexican government is becoming less and less responsive, and they’re beginning to look for ways out of aggressive enforcement. Recently, they have been reaching agreements with the company that’s been charged before the remediation plan is fully worked out, trying to preempt an aggressive plan.

This is the Mexican strategy in the revision of the USMCA. They want symmetry. My suggestion would be a board composed of all three governments, with citizen participation, that hears complaints and applies the same basic ILO conventions to all three countries.

In Mexico, with or without the USMCA, there should be an independent labor movement that is aggressive, that organizes, that takes direct action, that uses the Mexican labor law—which is truly good—to increase the legitimate representation of workers in Mexico. For that to happen, there needs to be an investment in resources, and the Mexicans don’t have the resources needed. There’s no Congress of Industrial Organizations in Mexico, so I’ve been trying to convince US unions that they should provide support for the Mexican independent labor movement.

AE: How much money would be a good, initial investment on the growth of the Mexican labor movement. What unions could undertake this?

JH: The US Congress appropriated $180 million for the implementation of the USMCA, of which $150 million was for contractors of various sorts to assist the Mexican Department of Labor in training and developing the labor inspectors, the labor justice system—“capacity building.”

The last $30 million was supposed to go to the AFL-CIO Solidarity Center, which I worked for at the time. The money was appropriated and I developed a program that I had hoped would be successful in building a militant labor movement in Mexico. The US and Mexican economies have been increasingly integrated since the 1980s, and in this period the Mexican PRI and PAN governments encouraged a low-wage strategy to attract foreign investment. The wage gap with the US grew significantly. Improved labor rights and increasing wages in Mexico are one of the means of leveling the playing field and promoting fair trade, but for Mexican wages to rise the country needs the growth of an independent and democratic labor movement. It was approved by the Department of Labor, but with the suspension of foreign aid that money has been frozen.

But US union support for Mexican worker organizing and collective bargaining need not depend on US government funding, nor cost $30 million. In the 1930s in the USA, the CIO hired 100 organizers, and in the five years from 1935–1940 the labor movement gained 5 million members, doubling in size. In Mexico, where an organizer’s salary and expenses at current levels would cost around USD $30,000, a national industrial organizing campaign could be carried out for a few million dollars. With the relatively favorable labor laws and labor authorities, some financial support for organizers, shared industrial research, and strategic coordination of campaigns would have the potential to organize many thousands of workers and change the balance of power in the auto and other basic industries.

AE: Do you think that many workers could be organized? 

JH: Definitely. In Puebla there’s a Volkswagen plant with 7,000 workers with an independent union. Within 20 miles of that plant alone there are 70,000 parts workers supplying its components. There’s an Audi plant there with another 30,000 parts workers. General Motors has a plant in Coahuila with 7,000 workers, surrounded by glass, tire, brake, clutch, and axle factories. They can all be organized with a little investment, good industry research, and use of existing US union relationships with the corporations. I believe that the mood is there. There is great discontent in the ranks of the Mexican working class, especially in the auto parts, tire, glass, and other basic industry sectors. We’ve had independent union victories in all those sectors, which indicates that with a little bit of investment and international union solidarity you can stimulate campaigns in other plants.

Footnotes