VENEZUELA: LABOR UNREST TURNS DEADLY

C O N F I D E N T I A L SECTION 01 OF 02 CARACAS 000157

SIPDIS

E.O. 12958: DECL: 02/05/2019
TAGS: ECON EFIN ELAB EINV PGOV PREL VE
SUBJECT: VENEZUELA: LABOR UNREST TURNS DEADLY

Classified By: Economic Counselor Darnall Steuart for reasons
1.4 (b) and (d).


1. (C) Summary. On January 29, police in Anzoategui state,
enforcing a judicial order obtained by Mitsubishi, entered
the Mitsubishi automotive factory, which had been taken over
by union workers on January 12. A melee ensued, leaving two
workers dead and several workers and two police officers
wounded. Expressing outrage for human rights violations
against the workers, both Anzoategui Governor Tarek Saab and
the Venezuelan National Assembly announced investigations of
the incident. Six police officers have been arrested in
connection with the incident, although formal charges remain
unknown. Rival pro-Chavez unions vying for control of
lucrative kickbacks from car dealers for expedited delivery
of vehicles spurred the factory take-over, according to a
prominent labor analyst. End Summary.

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Labor Unrest at the Mitsubishi Factory
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2. (SBU) According to press reports, on January 12,
automotive workers occupied the Mitsubishi assembly plant in
Barcelona, to protest the dismissal of some 135 contract
workers. The contract workers, employed by a third party for
maintenance and cleaning work, were left without jobs when
Mitsubishi and the third party ended their business contract.
The Mitsubishi workers then occupied the factory and
demanded that Mitsubishi hire the dismissed contract workers.
The Mitsubishi workers appealed to the Venezuelan Ministry
of Popular Power for Labor to intercede with Mitsubishi's
management to push for negotiations. Press reports also
indicate that the Mitsubishi workers have lobbied for the
nationalization of the factory to solve their ongoing labor
issues.


3. (SBU) According to local press reports, on January 29,
state police, executing a judicial order to displace the
occupying workers, cut the chains on the door to the factory.
A melee ensued and gunshots were fired, leaving one
Mitsubishi worker and one autoparts worker from Macusa dead,
and wounding six workers and two police officers. Anzoategui
Governor Tarek William Saab, a former human rights lawyer,
was embarrassed by the incident and announced an immediate
investigation into the incident. (Note: In 2005, Tarek Saab
issued an order that prohibited police officers from carrying
firearms when breaking up labor disputes.) On February 2,
six police officers were arrested in connection with the
deaths and approximately fifty police officers remain
suspended. The Venezuelan National Assembly (AN) also
launched an investigation into the incident in the context of
human right violations, and Barcelona community councils
announced marches in defense of workers' rights. Despite
calls for solidarity by Mitsubishi workers, employees of Ford
and GM refused to paralyze their factories' operations.
However, employees of the Toyota plant in Cumana joined in
the February 3 march by Mitsubishi employees to the regional
headquarters of the Supreme Court and the Governor's office.

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The Story Behind the Headlines
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4. (C) On February 2, Rolando Diaz, a prominent Caracas
labor analyst, told EmbOffs that the root cause of the
employee take-over of the Mitsubishi plant was a turf battle
between pro-Chavez unions. According to Diaz, the union that
controls the auto factory also controls the lucrative
kickbacks received from car dealers. For example, he said,
in exchange for expediting car delivery, the dominant union
will request a fee of up to 20,000 BsF (approximately 9,300
USD at the official exchange rate of 2.15 BsF per USD) per
car from the car dealer. Car dealers, facing decreased
national auto production and import quotas, have little
choice but to pay the kickback to the union and pass the
added cost to the consumer. Consumers may have to wait six
months to two years for a new 2008 model car if they do not
pay to "expedite." (Note: 2009 model year vehicles are not
currently available.)


5. (C) According to Diaz, two rival Chavista unions operate
within the Mitsubishi factory. The larger union counts 1800
workers among its membership and the smaller union, which is
aligned with a former Labor Minister, has approximately 300
members. With respect to the January 29 events at the
Mitsubishi factory, Diaz explained that both the union

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workers inside the factory and police officers were armed.
Apparently, he said, the union workers attempted to kidnap
the judge accompanying the police officers, at which point
the gunfire started. Diaz compared the labor unions to rival
Mafias fighting for control of a territory. Management, he
said, turns a blind eye to the kickbacks to avoid production
halts due to labor unrest.


6. (SBU) In addition to seeking control over distribution,
the car assembly unions negotiate labor contracts with the
companies that include the delivery of free automobiles to
the unions. According to press reports, the Socialist Union
at General Motors in Valencia is unhappy with the fifty-seven
compact cars it received in December and wants one hundred
and thirteen trucks instead. The union has threatened to
shut down the factory on Saturdays, which would decrease
production by two hundred and sixty automobiles annually.

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Comment
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7. (C) While local news reports have framed the shoot-out at
the Mitsubishi factory as a struggle for workers, rights,
competition between two pro-Chavez unions for control over
car distribution and associated kickbacks appears to have
been at the root of the factory take-over, as well as the
effort to obtain the judicial order to dislodge the auto
workers inside. Violent union turf battles, particularly in
the construction sector, led to approximately 200 killings in
2008, according to local media reports. President Chavez has
attempted unsuccessfully to unify and subordinate
pro-government unions to his United Socialist Party of
Venezuela (PSUV). Instead, fractious pro-government and
opposition unions continue to compete aggressively against
each other and even among themselves not so much for
ideological reasons, but rather for control over workplaces -
and personal enrichment opportunities. Such competition is
likely to become even more pronounced - and violent - against
a backdrop of significant, expected economic challenges in

2009.
CAULFIELD