AUTO PARTS SUPPLIER AND SUB-CONTRACTOR ACCUSED OF

UNCLAS SECTION 01 OF 03 MEXICO 005979 SIPDIS SIPDIS DEPT FOR DRL/AWH AND ILCSR, WHA/MEX, USDOL FOR ILAB E.O. 12958: N/A TAGS: ELAB ECON EIND EINV PINR MX SUBJECT: AUTO PARTS SUPPLIER AND SUB-CONTRACTOR ACCUSED OF ABUSING WORKER RIGHTS ¶1. SUMMARY: Johnson Controls Inc., a US based auto parts supplier and One-Digit, its Mexican based sub-contractor have been accused of a series of ongoing labor rights abuses. The Johnson Controls and the One-Digit plants where the abuses are said to be occurring are located in the central Mexican state of Puebla. The two companies are major parts suppliers for the Mexican operations of such international automobile companies as Volkswagen, Ford, Chrysler, General Motors and Nissan. Some of the abuses the two companies are accused of include forced overtime, sexual harassment, inappropriate camera monitors (in restrooms and locker rooms),dismissals for union organizing activities, denied profit sharing benefits and threats against family members of fired workers still employed by the companies. On paper, a union affiliated with Mexico,s fourth largest labor federation represents the workers at the two companies. In practice the union appears to be in collusion with the companies to deny workers their labor rights and has arranged to have employees fired simply for asking to see a copy of their collective bargaining agreement. On November 15, Mission Mexico,s Labor Counselor and visiting DRL Policy Advisor for International Labor and Corporate Social Responsibility accompanied a representative of the AFL-CIO,s Mexico City office to Puebla to meet with some of the current and recently fired workers from the two companies. The stories told by these current and former workers appear to be both genuine and credible. END SUMMARY THREE TO ONE AGAINST THE WORKERS -------------- ¶1. Johnson Controls Inc. (JCI) is, among other things, an auto parts supplier with international operations but whose headquarters is in Wisconsin. One-Digit is a Mexican based company that provides human resources (read outsourcing) services to a wide range of manufacturing companies. These two companies have a collaborative operation in the central Mexican state of Puebla. The two companies main, but not their only, customer is the Volkswagen de Mexico plant in Puebla but their operations in that state also produce goods for Ford, Chrysler, General Motors and Nissan. ¶2. According to numerous press reports the two companies are the perpetrators of a growing number of labor rights abuses. The consequences of these alleged abuses appear to have come to a head in May of 2007 when their then collective bargaining contract expired and the workers began to look forward to the upcoming contract negotiations as an opportunity to address some of their grievances. On paper the workers at JCI and One-Digit are formally represented by a union known as the &National Union of General Industrial Workers8 which is affiliated with the a national labor federation called the CROM (Regional Confederation of Mexican Workers). The CROM is perhaps Mexico,s fourth largest labor federation and the workers looked to their union and its affiliated federation to represent their interests. It was not until a month later the workers learned that their union &representatives8 had renegotiated and signed a new collective bargaining contract without their knowledge and with no consultation whatsoever. In effect the two companies and the &union8 had apparently gotten together on their own and decided what was best for the workers. A TALE OF WORKER RIGHTS ABUSES -------------- ¶3. The workers at JCI (and One-Digit) were shocked to learn that a new collective bargaining contract had been signed in their name and that they had been given no opportunity address a number of long standing grievances. These grievances reportedly started as far back 2001 which, according to the workers, was the last time that JCI fully complied with their understanding of the terms profit-sharing agreement in their collective bargaining agreement. The workers indicate that they can only presume that that the company complied with a profit sharing agreement because they have never been allowed to actually see the agreement nor any MEXICO 00005979 002 OF 003 other part of the collective bargaining contracts that their CROM affiliated union has negotiated and signed on their behalf. ¶4. Since 2001 the workers indicate that they have been subjected to a growing number of labor rights abuses. These abuse include such things as forced overtime, sexual harassment of female employees by their male supervisors, being pressured into signing documents agreeing to inappropriate camera monitors (in restroom and locker rooms), dismissals for union organizing activities (simply asking to see the collective bargaining contract has become grounds for dismissal) and threats against family members of fired workers still employed by the companies. Moreover, fired employees have been denied payment of the full severance pay benefits they are entitled to under Mexican Federal Labor Law. ¶5. Employees, salaries are routinely and severely docked for any time taken to attend to medical problems even when the workers can present documented proof of a visit to a physician in Mexico,s national health care system. In addition to medical visit absences being deducted from workers, vacation credit, the workers claim that only documented absences that incapacitate them for three days or more are considered excusable. In addition, workers claim that no consideration is given to pregnant women employed by the companies in terms of their daily work assignments and that they are often fired when they can no longer work even the most demanding schedules. Once fired these women become ineligible for access to the national health care system. (Comment: Only currently employed workers, and their families, are eligible for access to the national health care system.) NATIONAL AND INTERNATIONAL HELP -------------- ¶6. Because of the above-mentioned allegations of labor rights abuses the workers at JCI and One-Digit have received both national and international assistance in their efforts to obtain some form of redress for their grievances. The problems of the workers at JCI and One-Digit were initially made public when a Mexican NGO learned of their situation. The NGO, the Center for Workers, Support (CAT),an organization dedicated to promoting worker rights, learned of the conditions under which the employees at the two companies in question were working when it undertook a study of the auto parts suppliers operating in Puebla. Once it learned of the situation of the JCI and One-Digit workers it contacted the Mexico office of the AFL-CIO for assistance and international support. ¶7. Together CAT and the Mexico office of the AFL-CIO have been assisting the workers in their efforts to get better treatment from the two companies. The two organizations have helped the workers file formal complaints against the companies with both the Mexican state and federal labor authorities. They have used their media contacts to draw the attention of the general public to the conditions facing the workers in the two companies. They have also reportedly made a direct appeal to the international headquarters of Volkswagen in Germany (the two companies, main customer) asking the company to take steps to enforce the code of conduct that the company agreed to in 2002 which it said applies to itself and to its suppliers. In addition to the above-mentioned actions taken by the CAT and the AFL-CIO they also asked Mission Mexico,s Labor Counselor to meet with some of the JCI and One-Digit workers to hear their stories first hand. USG OFFICIAL MEET THE WORKERS -------------- ¶8. On November 15, post,s Labor Counselor took advantage of the visit to Mexico of DRL Policy Advisor for International Labor and Corporate Social Responsibility to jointly accompany an AFL-CIO representative to Puebla. Once there, the head of the CAT,s Puebla office and several other NGO MEXICO 00005979 003 OF 003 staffers arranged for a meeting with some of the current and recently fired workers from the two companies. The meeting took place in the back yard of a JCI employee far from the operations of either of the two companies. During the meeting the actual and former employees presented a credible picture of the harsh conditions under which they currently labor. ¶9. The worker spoke in passionate detail about how the two companies and their CROM affiliated union have repeated abused their labor rights in open violation of Mexican law. In addition to the previously mentioned abuses the workers also told of how JCI systematically lays off employees who are then immediately hired by One-Digit to do the exact same job and more often than not in the exact same place they had been released from. However, as employees of One-Digit these workers are hired under a series of three-month contracts that makes them part-time workers who are consequently ineligible for standard employee benefits mandated by Mexican law. According to the worker, some One-Digit employees at this factory have worked under a series of three-month contracts for up to three years. In addition, the three-month contracts keeps the worker in a state of constant fear that the will be permanently let go at the end of that time if they do not behave. These part-time employees are all required to pay union dues but they are not allowed to request any form of union assistance or representation. The USG visitors were shown a September 2007 pay stub of a One-Digit worker employed at the JCI factory and saw that union dues were indeed being deducted. ¶10. In addition to the above, the workers also told the USG visitors how the companies manipulated their work and vacation hours so that they often owed their employers time for which they had supposedly already been paid when in fact that was not the case. Furthermore, the two companies make it a standard practice to force the workers to take as their authorized vacation time any period when Volkswagen, their main customer, has workers on strike, or is operating at less than full capacity for such things as regular maintenance or when production lines are being re-tooled. Overall, the JCI and One-Digit laborers presented a convincing picture showing they were employed in a work environment characterized by fear, intimidation and systematic violation and/or intentional subversion of Mexican Federal Labor Law. COMMENT -------------- ¶11. After meeting with the JCI and One-Digit workers there seems little doubt that the two companies are engaging in regular abuses of their employees labor rights. This situation is made worse by the fact that the union that is supposed to represent the workers is, in reality, doing nothing of the kind. With the help of the CAT and the AFL-CIO the employees of the two companies appear to be organizing themselves for the process of changing their union representation available to them under Mexican law. In the meantime, the conditions under which the companies are working could improve, in all likelihood, by informing the main offices of Johnson Control Inc., Volkswagen, Ford, and the other international automotive companies of the action being taken by their suppliers in Mexico. All of these companies have codes of conduct that include respect for worker rights and there is no reason to assume that they will not enforce these codes one they are aware that they are being violated. Visit Mexico City's Classified Web Site at http://www.state.sgov.gov/p/wha/mexicocity and the North American Partnership Blog at http://www.intelink.gov/communities/state/nap / GARZA