Mexico in Turmoil After Strike, Riot, and Charges of Corruption

Mexico never has been a paragon of political stability. That country’s civil war (1910-20) was at least as brutal as our own, and resulted in the execution or assassination of five consecutive presidents. The era of one-party rule by the Institutional Revolutionary Party (PRI) that began in 1929 and ended with the election of President Vicente Fox in 2000 provided only the illusion of stability. Its main legacy is a culture of corruption that has become next to impossible to erase. The near future may find things getting even worse. In fact, the aftermath of the recent and still-contested presidential election might even produce another civil war. The situation has been exacerbated by several factors: accusations of corruption at the nation’s steelworkers and miners union; a mine explosion in February that killed dozens of workers; and the shooting deaths of two workers at a steel mill by riot police. The implications for pending immigration reform legislation in the U.S. could be enormous.


On July 2, Mexican voters went to the polls to elect a new president to replace current incumbent Vicente Fox, head of the National Action Party (PAN). It was a close three-man race, with Fox’s former energy minister, Felipe Calderon, winning by 243,000 votes over his nearest rival, far-Leftist Democratic Revolutionary Party (PRD) leader Andres Manuel Lopez Obrador. Obrador appealed the results, charging massive vote fraud on the part of Calderon’s people. He and other PRD leaders led massive protest rallies in the streets of Mexico City. On September 1, dozens of PRD members of the Mexican Congress, waving flags and raising fists, forced President Fox to cancel his scheduled in-person state-of-the-nation speech – he would give a televised address an hour later from the presidential palace. Opponents have accused Fox of illegally working behind the scenes to aid Calderon. 


It was to no avail. Mexico’s Federal Electoral Tribunal reviewed the results, and two months later, on September 5, announced that while fraud may have taken place, it was not of sufficient magnitude to reverse Calderon’s victory. Lopez Obrador has vowed to create an “alternate government” before the December 1 inauguration. But assuming that Calderon does take office, on schedule and unchallenged, he will have to resolve almost intractable labor strife that to some extent was brought on by union corruption. For now the prevailing issue is who’s in charge. Back on February 19, an explosion at Pasta de Conchos coal mine in Coahuila state killed 65 coal miners. The tragedy appeared to be the result of indifference on the part of the mine owner, Grupo Mexico, and the Mexican government. President Fox used the occasion to oust the union chieftain, Napoleon Gomez Urrutia, claiming that most of the 250,000-member National Miners and Metal Workers Union wanted him out anyway – he was simply acting on their wishes. But Gomez was more popular than the government had anticipated. More than 20,000 persons jammed the streets of Mexico City on March 7 to protest the action. 


On April 2, after weeks of tension, workers at the Sicartsa steel mill in Michocan went on a wildcat strike that would last nearly five months; many workers occupied the mill, refusing to leave. A labor court declared the strike illegal.  Grupo Villacera, the owner of the mill, fired about 300 striking workers and filed charges against those whom it believed responsible for vandalizing the premises. An attempt to evict resulted in a riot; two workers died in a hail of bullets and another dozen were wounded. But in the end, the workers won far more than they lost. Instead of being forcibly evicted, fired from their jobs, and sent to prison, the strikers came out of the work stoppage with 140 days of back pay, a generous raise and no need to hire defense lawyers. Mexican businessmen, fearing a loss of attractiveness of their country’s investment climate, reacted less than well. “We in the industrial sector are expressly uncomfortable with the resolution,” said Leon Halkin, of Concamin, Mexico’s confederation of industrial chambers of commerce. “The worry we have is that it marks a very unfavorable example for the Mexican market (because) of the conditions that it had to concede to all (of the workers’) requests.”       


A great many workers want Gomez back at the helm of their union. First, they’ll have to find him. Accused of misusing a $55 million payment made to his union as part of a 1990 mine privatization deal, Gomez is reportedly hiding out in Canada to avoid arrest for embezzlement. But assuming he is guilty, he merely represents another example of the Mexican way of doing business. Unions as well as businesses and the government have mastered the art of being on the take, imposing what amounts to a hidden tax on consumers. Police and other public servants routinely squeeze small bribes, known as mordida, to perform basic functions. Vicente Fox, who was elected in 2000 largely on the basis of his promise to clean up corruption, has barely made a dent. Transparencia Mexicana, the nation’s affiliate of the worldwide reform group Transparency International, estimates that Mexicans in 2005 paid out nearly $2 billion in bribes to public servants in more than 115 million acts of corruption to settle traffic tickets, obtain driver’s licenses and perform other functions. If Lopez Obrador’s challenge to the election results is successful, it’s doubtful he will make headway unless he can deal with the main causes of corruption – low salaries and wages; a weak criminal justice system; and a 70-year legacy of autocratic PRI rule. Until these things are addressed, notes Jephraim Gundzik, a California-based international investment consultant, corruption and violent strikes will continue, and within more than one union. A teachers’ strike in the mountain resort city of Oaxaca, practically an annual spring event, has grown unusually ugly this year. Now three months old, it’s become a leftist jamboree, with thousands of unionists, students, farmers and Marxist radicals setting up an encampment around the central plaza. Despite ongoing labor talks, the strike continues. Radicals, led by a small group of armed masked men, recently blocked a highway and distributed pamphlets warning the federal police and the military not to intervene.       

Our own country’s ability to stem the flow of illegal immigration from Mexico hinges very much on Mexico’s ability to reform labor law, clean up corruption and resolve strikes peacefully. With such matters addressed, say observers, Mexico will become a more attractive place to work and operate a business. “The militarization of the U.S.-Mexico border…signals the end of rapid remittance growth.” Without it, Gundzik said, “income growth in Mexico will have to be generated domestically through higher wages.” Less immigration to the U.S. and fewer remittances – these would be heartening trends, if not to the Fox government, which from the start has been demanding amnesty for Mexicans illegally here in America, then certainly to most Americans.