Labor unrest broke out at a truck manufacturing plant in Mexicali, Baja California, this month. Dissatisfied over a profit-sharing payment as well as stagnating wages, some employees of the Kenworth Mexicana assembly plant staged a work stoppage on Friday, May 9. Employees again halted production on Monday, May 12, after news spread of co-workers sacked from their jobs because of their participation in the previous week’s labor action.
Kenworth Mexicana is part of the Bellevue, Washington-based company Paccar. The Mexicali factory first opened under Mexican ownership during the 1950s, but was later acquired by foreign capital. For a long time, the plant had a reputation as one of the highest-paying and best industrial employers in Mexico.
“We have gone two-and-a-half years without a salary raise. We are (still) waiting to negotiate with Kenworth officials because they haven’t wanted to meet with us since (May 9),” said worker Paul Najera. “We’ve shown up for work at the plant but (management) continues in a negative mode in spite of our willingness to return to work on good terms.”
According to another worker, the company’s annual profit-sharing payment was slashed drastically from about $1,500 in 2013 to approximately $650 in 2014.
Kenworth issued no immediate statement on the labor dispute, but managers reportedly told workers that economic problems combined with this year’s hike in the border region sales tax forced the company to limit the size of the latest profit-sharing payment.
Under Mexican labor law, companies are required to pay their employees profit-sharing payments every year.
The Kenworth conflict went public after workers protested at Mexicali’s Civic Center last week. Led by Fidencio Pena and Diego Rosales, the workers also sought out the support of city officials and state lawmakers. Mexicali is the state capital of Baja California.
According to one labor leader, some of the fired workers had more than 30 years of service under their belt.
David Limon Grijalva, Baja California attorney general for labor rights, later confirmed that 106 Kenworth workers had filed a wrongful termination complaint with the federal Labor Secretariat; two of the workers accepted company severance payments while the rest held out for job reinstatement, Limon said.
The discord at Kenworth over profit-sharing exposed an increasingly sore spot in Mexican employer-labor relations. A recent study by the Economic Research Institute of the National Autonomous University of Mexico (UNAM) determined that only one-fourth of salaried workers receive the proper profit-sharing payments due to them under their country’s labor law.
According to the study, the payments have practically disappeared in the service sector while also plunging in the textile, toy-making and manufacturing components of the economy. The UNAM researchers linked employment outsourcing to the loss of profit-sharing income.
Even once-relatively generous employers like Volkswagen have reduced profit-sharing with workers, with the German company cutting its payment by more than two-thirds during the last two years. The profit-sharing drop has reportedly prompted the Independent Union of Volkswagen Workers to seek an audit of the company’s books.
The UNAM study reported that the $21 billion mining industry was virtually the only economic sector maintaining strong profit-sharing payments.
Sources: La Jornada, May 17 and 19, 2014. Articles by Antonio Heras and Patricia Munoz Rios. Zeta (Tijuana), May 14, 2014. Article by Sergio Haro Cordero. La Voz de la Frontera, May 13 and 15, 2014. Articles by Mayte Lopez.
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Center for Latin American and Border Studies
New Mexico State University
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