Solidarity Transformed: Labor Responses to Globalization and Crisis in Latin America 9780801460579

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Solidarity Transformed

Solidarity Transformed

Labor Responses to Globalization and Crisis in Latin America

Mark S. Anner

ILR Press an imprint of Cornell University Press Ithaca and London

Copyright © 2011 by Cornell University All rights reserved. Except for brief quotations in a review, this book, or parts thereof, must not be reproduced in any form without permission in writing from the publisher. For information, address Cornell University Press, Sage House, 512 East State Street, Ithaca, New York 14850.

First published 2011 by Cornell University Press First printing, Cornell Paperbacks, 2011 Printed in the United States of America Library of Congress Cataloging-in-Publication Data Anner, Mark Sebastian, 1963– Solidarity transformed : labor responses to globalization and crisis in Latin America / Mark S. Anner. p. cm. Includes bibliographical references and index. ISBN 978-0-8014-4959-8 (cloth : alk. paper) ISBN 978-0-8014-7673-0 (pbk. : alk. paper) 1. Labor unions—Latin America. 2. Labor movement—Latin America. 3. Clothing workers—Labor unions—Latin America. 4. Automobile industry workers—Labor unions—Latin America. 5. Solidarity— Latin America. 6. Globalization—Latin America. I. Title. HD6530.5.A796 2011 331.88098—dc22 2010047913 Cornell University Press strives to use environmentally responsible suppliers and materials to the fullest extent possible in the publishing of its books. Such materials include vegetable-based, low-VOC inks and acid-free papers that are recycled, totally chlorine-free, or partly composed of nonwood fibers. For further information, visit our website at www. cornellpress.cornell.edu. Cloth printing Paperback printing

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Contents

List of Figures and Tables

ix

Preface

xi

Acknowledgments

xix

Acronyms

xxv

1. Introduction

1

2. Segmented Production, Fragmented Labor

22

3. Transnational Activist Campaigns and the Anti-Sweatshop Movement in El Salvador and Honduras

52

4. Labor’s Radical Flank Mechanism in Central America

86

5. Transnational Labor Networks in the Brazilian Auto Industry

111

6. Microcorporatism in Argentine and Brazilian Auto Plants

139

7. Conclusion

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Contents

Notes

181

References

191

Index

205

Figures and Tables

Figures 1.1: Labor’s four responses to globalization

19

2.1: Traditional versus segmented production regimes

25

2.2: Model of export processing zones

28

2.3: El Salvador: Segmentation and unionization rates in manufacturing

32

2.4: Central America and DR apparel and textile exports to the United States

36

2.5: Auto industry: Model of modular production

39

2.6: Brazil: Motor vehicle production and employment

45

2.7: Argentina: Motor vehicle production and employment

47

3.1: The triangle of power and labor’s tri-level strategy

81

3.2: Example of labor’s tri-level strategy

81

4.1: The radical flank mechanism in El Salvador and Honduras

106

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Figures and Tables

Tables 1.1: Global commodity chain internationalism

17

2.1: Brazil: Wages and unionization in traditional and modular auto plants

43

2.2: Argentina: Wages and unionization in traditional and modular auto plants

49

3.1: Left labor actions to form unions in apparel export plants

75

4.1: Moderate labor actions to form unions in apparel export plants

107

5.1: Brazil: Transnational labor activities by factory

131

6.1: Unionization in the Brazilian auto sector

162

6.2: Unionization in the Argentine auto sector

163

Preface

This book is a product of both lived experiences and careful academic research and analysis. My years in academia have given me a profound appreciation for the rigors of the scholarly enterprise, with its attention to methods, data collection, and analysis. My decade in Latin America, where I often lived with workers and their families, and spent countless nights with workers at strike sites, have given me many insights into the thoughts, beliefs, and ideas that shape their actions. What I have learned is that in order to understand how people act we must know something not only about their economic and political contexts, but also about how they see themselves and others in society. I also believe that, just as it is important to know the lived experiences of the subjects of our writings in order to better understand their actions, so too is it useful to know something about the experiences of the authors who write about them, especially if those experiences are particularly pronounced. So let me say a little about some of the experiences that have influenced me and ideas that have made their way into this book.

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My college years were marked by the Central American wars of the 1980s. These wars might not have mattered that much to me if it had not been for a new law requiring young men to register for the draft. That hit close to home. I began taking Latin American history courses and paying more attention in Spanish class. My first real activism was in the Central America solidarity movement. Soon after graduating, I developed another interest: I was given the opportunity to work with a local labor union to organize a large hotel and restaurant in the Boston area. In coordination with two skilled union organizers from the local chapter of the Hotel Employees and Restaurant Employees union, I endeavored to establish a union from the inside as a busboy. But after nine months the union leadership decided to shift its attention and get out the vote for a local election in which the union president was running. Union representatives told me that they might return to the organizing effort in six months. In union organizing work, this is an eternity. The campaign was over, and I needed to move on. I learned that a progressive union in El Salvador was looking for a bilingual activist to work with it in San Salvador, the country’s capital. My two passions, labor and Central America, seemed to have come together for me in one opportunity. El Salvador was in the midst of a civil war, and government arrests and death squad killings of unionists were on the rise at the time. The Salvadoran unionists realized that their survival depended not only on their organizing ability, but also on the solidarity of international labor unions and human rights organizations. Yet, with Spanish as their only language, communication was a problem. The unionists needed someone to help send off urgent action alerts in English whenever a unionist was arrested or killed, or some other emergency presented itself to solidarity groups in Europe, the United States, and Canada. Foreign solidarity groups were asked to pressure the Salvadoran state to punish those responsible for the killings and to release those unionists who were unjustly imprisoned. The hope was not only that the culpable parties would be punished, but also that the protest would create deterrence to future repression. International solidarity in this context was a very political affair; the state was most often the direct target of the protest movement. But it was also a high-stakes and basic affair. It was about fundamental human rights and activists’ survival.

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The job provided no salary or benefits, but I would be given three meals a day at the union cafeteria. Sleeping accommodations would be provided on the cement floor in the back of the building, at least until other arrangements could be worked out. Old protest banners could be used as blankets. Work would be seven days a week and often go well into the night. Although it was not a job description that I was willing to share with my parents, I was twenty-four at the time and it all sounded perfectly fine to me. There was a clear and urgent need for the solidarity work I could provide, and everyone working for the union was there because they were deeply committed to what they were doing. Weeks after arriving, I moved into the apartment of a former textile worker turned union leader who lived with his family in the working-class Zacamil housing projects. I was given a space with a cot behind a partition in the kitchen. During the day I worked in the office communicating with U.S. and European activists about the latest abuses against unionists. Many nights were spent at strike sites. Striking workers stayed at work centers at night to prevent state security forces from taking over the installations and returning them to the employers. The strikes gave me the opportunity to have countless hours of conversations with workers. After a few weeks in the country, I met the representative for Latin America of the Norwegian Confederation of Trade Unions (LO-Norway). As residents of a small, progressive European country with more powerful neighbors, Norwegian unionists appreciated some of the challenges facing El Salvador. With generous collaboration from the Norwegian government, LO-Norway provided much of the funds allowing the progressive Salvadoran federation I was working for to function. I quickly felt a certain political affinity with the Norwegian approach to international labor solidarity, which was based on mutual respect and a belief in progressive, political unionism to transform not only the workplace but also society. It was in sharp contrast to the AFL-CIO at the time, which, through the American Institute for Free Labor Development (AIFLD), received money from the U.S. State Department to build conservative, market-oriented, “business” unions in the region. One evening, I asked my Norwegian colleague how he knew which unionists to work with in Latin America. “That’s easy,” he responded. “I go to a country, ask who the Americans are working with, and I work

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with the other ones. So far, I haven’t had any problems.” Of course, there was more to it than that, and there were plenty of good U.S. union locals and solidarity committees doing effective solidarity work, but the point was taken. I worked part-time for LO-Norway, writing occasional reports and translating for delegations of Norwegian unionists who came through on a regular basis. I also continued to work for the Salvadoran federation, where I became involved in raising funds internationally to maintain strikes and other union activities. This eventually put me on the radar screen of the state security forces. In September 1989, several heavily armed men came to my Soyapango home in a coordinated predawn raid on union activists. I was taken to their headquarters, stripped to my underwear, blindfolded, handcuffed, and placed in a basement jail cell. For the first twenty-four hours, I was denied food and water, and was forced to remain standing for prolonged periods between interrogation sessions. During the interrogation sessions I was asked if I worked with labor unions in the country, as if doing so was a serious crime against the state. I decided to say that I was an economics student, and that I was doing research on the benefits of free trade in small developing countries. I do not think they believed me, but fortunately for me they were disinclined from using other means at their disposal to test the veracity of my claim. Other unionists arrested that day were severely beaten. Several women and one young man were raped. I later learned that an activist campaign and the Norwegian government (which responded to pressure from Norwegian unions) demanded my release and that of several Salvadoran unionists who had been arrested on the same day. The campaign made direct reference to our right to carry out labor union work. This countered my attempt at discretion during my interrogation, but it worked. I was released two days later, the beneficiary of an urgent action campaign (ironically like the ones I had originally come to help organize for detained Salvadoran unionists). The anti-union violence escalated. Six weeks after our release from detention, a lunchtime bombing of our union cafeteria by paramilitary forces left ten people dead and me with a severe head wound and lingering health problems. Three union friends sitting with me at the time were killed, including a top union leader, Febe Elizabeth Velásquez. After eight days in a Salvadoran hospital, I returned to the United States for continued medical

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attention. Days later, the leftwing guerrilla insurgency launched its largest military offensive in over a decade, briefly taking over considerable segments of San Salvador and other large cities. The extreme level of violence in the country spurred the international community to act. By the time I returned to live in El Salvador in the summer of 1991, the United Nations was actively involved in a peace process with the Salvadoran government and the guerrilla forces to end the twelve-year civil war. For labor, the end of the war, which coincided with the end of the Cold War internationally, lessened levels of polarization among groups and allowed unions to focus on organizing new factories and improving wages and working conditions. Alliances expanded as local nongovernmental organizations like women’s groups and human rights organizations became engaged in anti-sweatshop activism. The AFL-CIO, now under new leadership, sought ties with left-oriented unions that the previous leadership had shunned and demonized. And groups working on international labor rights, like the National Labor Committee, shifted their focus from protesting the arrest and torture of union leaders to ensuring that the young women workers who produced apparel for North American consumers were treated with dignity at work. Now instead of spending my days writing urgent alerts on the latest antiunion repression I spent time overseeing Norwegian-funded programs in El Salvador and eventually in Honduras, Nicaragua, Guatemala, the Dominican Republic, Peru, Bolivia, and Brazil. These programs focused on labor union growth, capacity building for tasks like collective bargaining, and international campaigns to assist union organizing efforts. In El Salvador, as employment in export processing zones (EPZs) mushroomed from three thousand to eighty thousand, labor conditions in these factories quickly became a concern for the labor movement. I increasingly focused on documenting labor rights abuses in these apparel export factories producing North American brands for North American consumers. A case involving a local factory that produced for Gap took much of my attention in the mid-1990s. Workers at the factory complained that when they had attempted to form a union, all of the workers identified by management as being sympathetic to the union had been dismissed. The National Labor Committee organized an international campaign that forced Gap to require that the local factory owner rehire the dismissed unionists. I was asked to join a group of local NGOs to achieve that goal.

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The following months for me were filled with countless visits to the factory, numerous interviews with workers and union activists, and lengthy discussions and negotiations with the local factory owner and Gap representatives. During this process, the world of export processing zones was opened to me in great detail. I learned about the complexities of supplychain management, production order cycles, the role of supplier consortiums in Asia, and the impact of complex trade rules. More important, I began to understand how these dynamics influenced working conditions and employment relations in the factories. This level of understanding of the world of work had eluded me during the 1980s when international solidarity was a highly politicized affair often involving issues of unionists’ survival. International solidarity was still political in the 1990s, in that the government remained a concern and often the target of the solidarity movement, but now the focus shifted from demanding that the security forces respect human rights to demanding that the Ministry of Labor ensure employers respect basic labor rights. New alliances opened up to the labor movement during this time, and old alliances took on new forms. Women’s groups concerned about the fate of women garment workers embraced labor campaigns. Human rights groups and faith-based organizations that had focused on ending the war in the 1980s now joined labor organizations in their demand for human dignity at work. The transition from old to new forms of solidarity is never seamless, partly because old practices by repressive, anti-union forces often die hard. Some unionists still received death threats and a few were killed. In my case, four days after accompanying several union leaders as they returned to their jobs at the Gap supplier, three armed men visited me in my home and, after waiting for the right moment, attempted to take me with them. Fortunately, the police arrived in response to a call from a concerned neighbor, and the assailants fled over a wall in my backyard. My remaining year in the country was spent with heightened security precautions, which included changing homes and driving a car with windows so dark that evenings out, especially when it rained, became an additional risk to my safety. The legacy of dictatorship and civil war in El Salvador would take more than a peace accord to erase. Yet many things were indeed changing. The emerging anti-sweatshop activism of the mid-1990s had blossomed

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into a major transnational movement. It had become a dramatic and creative form of activism on college campuses. Anti-sweatshop groups grew in Canada, Europe, and in parts of Asia. The new form of activism differed in many ways from labor activism during the era of civil war and military dictatorship. It suffered less from excessive politicization, and was more focused on concrete work demands, and on broad social alliances. And a networked form of organization was slowly replacing the more rigid organizational form of the preceding era. These dynamics were not unique to El Salvador. Transnational antisweatshop activism spread to Mexico, through Central America and the Caribbean, and then to Asia and the Middle East. In South America, autoworkers had joined forces with their global counterparts to protect jobs and achieve global employee committees and international agreements on rights at work. The international solidarity movement would not be without problems. Power imbalances between activists in the global North and workers in the South sometimes distorted campaign goals and created tensions. Some southern unionists denounced northern activists and proclaimed that they would organize without international solidarity. Often, either deliberately or unwittingly, they used the threat of unionization by more radical unions to make themselves more palatable to employers and thus facilitate their union successes. On the left, tensions emerged between women’s groups and labor organizers. Some women’s groups accused male union leaders of lacking a gender perspective as they attempted to organize mostly female garment workers. Unions responded that women’s groups did not understand the dynamics of union organizing and collective bargaining, and that women’s committees were poor substitutes for strong unions. Yet, in the midst of these disputes, the movement grew and enjoyed several important successes. It found new points of vulnerability in global supply chains by exploiting structural weaknesses and cultural frames that resonated with larger societal values. In more than a few cases, these successes were short-lived due to capital mobility, world economic crises, and the international industrial restructuring that facilitated South-South competition. In other cases, the effects were more long-lived. These dynamics made the study of labor solidarity all the more fascinating for me.

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When I left El Salvador to begin my academic pursuits, I decided to turn an intense decade of experiences in Latin America and my initial research endeavors into the foundation for my studies. First, I wanted to know why union organizing was still so difficult after the end to such a long period of authoritarian rule in Latin America and, in countries like El Salvador, violent civil war. Peace accords and democratization should have created a much more permissive environment for unionization. What was it about global industrial restructuring that made local factory owners so resistant to unionization? And how did state transformation during this period affect labor movement dynamics? Second, given this new political and economic context, what strategies were unionists turning to and why? Was international activism the only response, or were there others? How would workers in other countries— like Brazil and Argentina—respond to the challenges of globalization in their dominant industries, most notably the automobile industry? As my own experience working with unions made clear, countless potential strategies were available to union organizers. How did historical experiences, ideational influences, and political identities shape the transformation of labor solidarity? It took me years of intellectual inquiry to begin to understand in more theoretical terms some of my experiences from my ten years in Latin America. It took another several years of field research and writing to systematically probe the ideas and arguments that I derived from my experiences and academic exploration. This book is a product of that endeavor.

Acknowledgments

This book has been a long time coming, and my debts are extensive. I am grateful to my union friends in the National Federation of Salvadoran Workers (FENASTRAS) of 1988–1992 who took me into their organization as one of their own and gave me a crash course on unionism under authoritarian rule. I am also indebted to the workers in export processing zones—especially at Mandarin International—who trusted me to work with them in finding a solution to their problems and in the process introduced me to the EPZ production system and the lives of the workers who make our apparel. My colleagues in the Norwegian Confederation of Labor confided in me and gave me the honor of representing them internationally for many years. In the earliest incarnation of this work as an academic project, I benefited enormously from Sidney Tarrow, who, from our first meeting, encouraged me to “theorize more” about social movement dynamics. He gently pushed me when I needed it the most, while giving me the freedom to develop and explore my project as I saw fit. Peter Katzenstein inspired

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me to go beyond economic and political structures by exploring the role of norms and political identities in shaping large social processes. He helped me to focus my arguments and find my own voice. And he provided a remarkable source of encouragement. Maria Cook was a friend and a colleague from the moment I arrived at Cornell University. She constantly pressed me to make my arguments and evidence more precise, and this greatly improved my project. Peter Evans provided a wonderful source of support and intellectual collaboration, and he helped me to see some of the deeper implications of my arguments before I recognized them myself. Victoria Murillo provided extensive and extremely insightful and helpful comments. At Penn State University, I have benefited from the feedback provided by the social movement reading group led by John McCarthy and Lee Ann Banaszak. The Rock Ethic Institute’s Social Justice Seminar, under the guidance of Sandra Morgen, was an additional source of insight and inspiration, as was the Political Science and Economics departments’ globalization seminar organized by Quan Li and Andrés Rodríguez. Penn State’s chapter of United Students Against Sweatshop (USAS) provided a different sort of encouragement, for which I am grateful. Through other academic conferences, workshops, and collaborative endeavors, many other colleagues provided support and valuable insights on segments of my work. They include Teri Caraway, Alex Colvin, Lance Compa, Susan Eckstein, Henry Frundt, Gary Gereffi, Michael Gordon, Michael Hanagan, Shareen Hertel, Harry Katz, Margaret Keck, Mark Kesselman, Audie Klotz, Scott Martin, Gene Palumbo, Dan Plafcan, Jonas Pontusson, Karthika Sasikumar, Andrew Schrank, Gay Seidman, Joel Stillerman, Charles Tilly, Lowell Turner, Peter Waterman, Christopher Way, and Peter Winn. My appreciation also goes to Harley Shaiken, whose path-breaking book Work Transformed helped inspire the title of this book. My students at Cornell and Penn State have been a source of encouragement, and they contributed in their own way to this project. When I began teaching on topics related to this book, they let me know—through their verbal feedback or, more often, their facial expressions and body language in the classroom—when I was being precise and engaging, and when the presentation of my ideas was somewhat uninspiring. I quickly learned the benefits of clarity as well as the effectiveness of incorporating

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stories from Latin America to illustrate my points. These lessons served me as I’ve endeavored to write this book. Research for this project entailed living abroad and numerous field research trips in four countries between 2001 and 2010. I am especially thankful to the workers and unionists in Latin America who shared their lives, hopes, and frustrations with me over countless hours of conversations. In El Salvador, I am grateful to the members of the Center for Labor Studies (CENTRA) who opened their archives to me, provided free photocopies, and offered countless discussions about labor politics. The Center for Labor Studies and Support (CEAL) provided invaluable contacts, meeting space, and an opportunity to exchange ideas. For gathering data and conducting surveys in El Salvador, I thank Norma Molina, my research assistant there. In Honduras, all of the labor centers were generous with their time. I am particularly grateful to the FITH labor center and the CGT’s maquila organizing project for their support during my stay, their patience in answering my endless questions, and their willingness to organize countless meetings for me with apparel workers. Juan Ramon Irías provided firstrate research assistance in assisting me with my surveys. Representatives of the Ministry of Labor and the Honduran Maquiladora Association were also generous with their time, information, and analysis. In Brazil, the researchers from DIEESE—particularly Patricia Pelatieri, Jefferson José da Conceição, and Airton Gustavo dos Santos—were extremely helpful in providing scholarly studies and feedback on some of my ideas. At the DESEP research center, Carlos Augusto S. Gonçalves provided office space when I needed it, and also intellectual discussion. Kjeld Jakobsen and Silvia Portella of the CUT labor center provided contacts, encouragement, and friendship. Fernando Lópes and Valter Sanches of the National Confederation of Metalworkers were extremely generous with their time, as were all of the colleagues of the SMABC autoworkers’ union. I also thank the SMABC for giving me access to their internal files, and for the assistance of the staff at the SMABC office to sort through them all. I am grateful to Marco Antonio Kramaer of General Motors and to Uwe Ernst Kraus and Elder Couto of Volkswagen for their time and insights. Pablo Trevel and Claudia Banus of the National Motor Vehicle Constructors Association (ANFAVEA) were also generous with their time.

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My work in Argentina would not have been possible without the assistance of Marta Novick and Osvaldo Battistini; they provided me with numerous contacts and, thanks to their outstanding scholarship on the Argentine automobile sector, a solid academic foundation from which to begin my research. Dr. Victor Hugo of the Ministry of Labor gave me additional insights and invaluable contacts, for which I am extremely grateful. At the autoworkers’ union, SMATA, Manuel Pardo and Hugo Gonzalez shared invaluable information about their union with me. Dr. Silvia Catany of General Motors, Hector Garcia and Edgardo Pinelli of Mercedes Benz, Dr. Juan Carlos Parmigiani and Dr. Carlos Mignaquy of the Ford Motor Company, and especially Dr. Luis Maria Casares, Francisco Mosca, and Mariel Russo of Volkswagen in Argentina were extremely generous with their time during my visit. Research for this project was assisted by several fellowships and research awards. The International Dissertation Field Research Fellowship Program of the Social Science Research Council (SSRC) offered funds provided by the Andrew W. Mellon Foundation. A Ford Foundation grant to the Cornell Transnational Contention Project under the direction of Sidney Tarrow provided additional support for field research. Funding and research assistantships provided by the College of Liberal Arts at Penn State allowed for several follow-up visits. Funds provided by the W. E. Upjohn Institute for Employment Research permitted greater data analysis. Finally, an SSRC 2009 fellowship allowed me to get my manuscript ready for publication with the assistance of developmental editors Adi Hovav and Jeff Hardwick, and SSRC representatives Samuel Zief and Daniella Sarnoff. A special word of thanks goes to Fran Benson of Cornell University Press. Fran offered encouragement after one of my first speaking events and then published my first book chapter in Transnational Cooperation among Labor Unions, edited by Michael Gordon and Lowell Turner. When she later met with me to discuss how to promote that book, Fran told me that she saw in me far more than one book chapter. For believing in me at such an early stage in my academic career, she helped me to believe in myself. When my manuscript for this book was finally ready, I had no doubt of where to take it. Lingering health issues linked to the perils of labor solidarity activism in a war zone plagued me during much of the writing of this book. For

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help in addressing those issues, I thank doctors Paolo Bolognese, Thomas Milhorat, Chan Roonprapunt, Roger Kula, and Brian Hyman. I also thank Heather Walker, Daniel Greenberg, and Tracie Pletcher for assisting me during the long and lingering post-surgery recovery process. My family was an unwavering source of support. My parents instilled in me many of my values and were a constant source of encouragement. My three sisters gave me love and support. My brother introduced me to the world of activism and provided a solid example to follow. I reserve my most special acknowledgment for my wife, Anouk Patel-Campillo. She has been a source of support, while also never failing to remind me that there were things in life besides workers and my research on them. Despite the extreme quality of support I have received over the years, no doubt a careful reader will detect some errors in fact, analysis, or omission, for which no person mentioned here bears any responsibility. They are mine alone.

Acronyms

ADEFA AFL-CIO ANFAVEA

CAW

CGS CGT CGT

Asociación de Fábricas de Automotores (Automotive Manufacturer Association) American Federation of Labor–Congress of Industrial Unions Associação Nacional dos Fabricantes de Veículos Automotores (National Motor Vehicle Constructors Association) National Automobile, Aerospace, Transportation and General Workers Union of Canada (Canadian Auto Workers) Confederación General de Sindicatos (General Confederation of Trade Unions) Confederación General de Trabajadores (General Confederation of Workers) [Honduras] Confederação Geral dos Trabalhadores (General Confederation of Workers) [Brazil]

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CGT

Acronyms

Confederación General del Trabajo (General Confederation of Labor) [Argentina] CLC Canadian Labour Congress CNM Confederação Nacional dos Metalúrgicos (National Confederation of Metalworkers) CNTS Confederación Nacional de los Trabajadores Salvadoreños (National Confederation of Salvadoran Workers) COSDEMA Coordinadora Social para la Dignificación del Empleo en la Maquila (Social Coordinator for Employment with Dignity in the Maquila) CSTS Coordinadora Sindical de Trabajdoras(es) de El Salvador (Trade Union Coordinator of Salvadoran Workers) CUT Central Única dos Trabalhadores (Single Workers’ Center) CUTH Confederación Unitaria de Trabajadores de Honduras (United Confederation of Honduran Workers) DIEESE Departamento Intersindical de Estatística e Estudos Sócio-Econômicos (Inter-Trade Union Statistical and Socio-economic Studies Department) EPZ Export Processing Zone FEASIES Federación de Asociaciones y Sindicatos Independientes de El Salvador (Federation of Independent Associations and Unions of El Salvador) FENASTRAS Federación Nacional Sindical de Trabajadores Salvadoreños (National Federation of Salvadoran Workers) FESITRAINCOSH Federación Sindical de Trabajadores de la Industria de la Costura y Similares de Honduras (Union Federation of the Apparel Industry Workers) FITH Federación Independiente de Trabajadores de Honduras (Independent Federation of Honduran Workers) FS Força Sindical (Union Force) FUTH Federación Unitaria de Trabajadores de Honduras (United Federation of Honduran Workers) GMIES Grupo de Monitoreo Independiente de El Salvador (Independent Monitoring Group of El Salvador)

Acronyms

GUF IG Metall ILO IMF IMF ITGLWF ITUC NLC ORIT

PT SITRAKIMIH SMABC SMATA

SMSP

STIASSYC

UAW

UNITE UOM USAS USLEAP WCL

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Global Union Federation Industriegewerkschaft Metall (German Metalworkers Union) International Labour Organization International Metalworkers’ Federation International Monetary Fund International Textile, Garment and Leather Workers’ Federation International Trade Union Confederation National Labor Committee Organización Regional Interamericana de Trabajadores (Inter-American Regional Organization for Workers) Partido dos Trabalhadores (Workers’ Party) Sindicato de Trabajadores de Kimi de Honduras (Union of Workers of Kimi Honduras) Sindicato dos Metalúrgicos dos ABC (Metalworkers’ Union of the ABC) Sindicato de Mecánicos y Afines del Transporte Automotor (Union of Mechanics and Related Trades of the Automobile Industry) Sindicato dos Metalúrgicos de São Paulo, Mogi e Região (Metalworkers’ Union of São Paulo, Mogi and region) Sindicato de Trabajadores de la Industria del Algodón, Sintéticos, Similares y Conexos (Industry Union of Cotton, Synthetics, and Related Industries) International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (United Auto Workers) Union of Needletrades, Industrial and Textile Employees Unión Obrera Metalúrgica (Union of Metalworkers) United Students Against Sweatshops U.S. Labor Education and Action Project World Confederation of Labor

Solidarity Transformed

1

Introduction

It is very difficult for us to organize the U.S. apparel industry if you [Central American unionists] are unable to organize your workers. We need a new strategy on a global scale. Each day we see how our destiny is linked to your destiny. Transnational corporations cannot be organized only within one nation. —U.S. union activist, 1997 To organize a union you have to instill trust in the workers. They have to know that they will not lose their job if they join the union. We can achieve this by integrating national and international pressure. We have to know what brands are being produced in the factories. There needs to be NGO and union pressure. And we have to take advantage of political conjunctures. —Salvadoran union activist, 2001

Two changes—one political and the other economic—have contributed to a dramatic transformation of labor solidarity since the end of the Cold War. The decline in state protection of labor altered the political terrain in which labor operates, and the international restructuring of industry transformed the economic landscape. Protected national industries have been displaced by hyper-competitive production chains that span states and regions, and escalate employers’ proclivity for keeping wages low and unions out. To respond effectively to these changes, labor solidarity—how workers and their organizations support each other in pursuit of common goals— would have to be transformed. But was labor up to the challenge? For pessimists, deregulated labor markets, rising corporate power, and escalating North-South differences were insurmountable obstacles, and labor’s future looked bleak. For optimists, the end of Cold War ideological antagonisms

2

Chapter 1

and growing cross-border connections allowed for global social movement unionism, which was capable of overcoming these obstacles. This book argues that there is no one dominant or predetermined path for labor in the era of neoliberal globalization. Rather, there are a range of responses pursued by labor organizations with varying degrees of failure and success. These responses are shaped by labor identities, political threats and opportunities, and economic structures. From the remnants of old corporatist pacts between labor and the state, some labor groups are drawn to new forms of economic nationalism where domestic pacts are prioritized over broader class-based interests. Other labor unionists, influenced by a history of more militant activism and international solidarity in the region, are often more inclined to pursue cross-national, class-based alliances. Both domestic pacts and transnational solidarity come in different forms and degrees of intensity. Where states are able to provide labor with at least some of the protections it needs from the challenges of economic globalization, the desire to pursue new strategies is mitigated. And where industry is highly centralized and controlled by producers (as in autos), labor actions will tend to be more sustained. Where industry is more decentralized and controlled by retailers (as in apparel), labor will have a greater tendency to pursue NGO alliances and sporadic campaigns. Combined, these interacting influences result in two major types of transnational labor response to recent political and economic transformation: transnational activist campaigns (TACs), which are built on shorter-term labor and NGO cross-border alliances, and transnational labor networks (TLNs), which are characterized by stable, class-based solidarity. Under certain circumstances, more moderate unions in the apparel sector are inclined to pursue clientelistic labor-employer pacts, which are facilitated by the threat of left unionization via a radical flank mechanism. In the auto sector, moderate unions have a proclivity toward microcorporatist labor-employer pacts, which entail a relatively stable form of collaboration between workers and employers. These categories of response should not suggest that a labor organization’s strategy must fit rigidly and permanently into one of four boxes. Rather, strategies are by definition dynamic, and the pulls of nationalism and internationalism affect all unionists to varying degrees. Union leadership transitions, variations in employer strategies, and changes in government and labor relations institutions all continue to modify and transform

Introduction

3

labor’s action. And unionists continue to learn from their experiences and from those around them. That is, labor has choices. But do these new strategies matter? Is it even relevant to concern ourselves with the study of labor movements anymore?

Labor’s Continued Relevance? Ever since Alain Touraine wrote off labor as an old social movement, the study of labor has held a precarious position in the annals of social movement scholarship. The recent interest in economic globalization has done little to alter this view of labor among some. Manuel Castells’s influential three-volume set analyzes the dramatic transformations affecting economic and social relations and thus the world of work, and then dismisses labor as an actor from a bygone era (Castells 1997). Margaret Keck and Kathryn Sikkink’s otherwise path-breaking study on transnational advocacy dismisses labor as a predominately “bounded” economic actor (Keck and Sikkink 1998, 15). And Charles Tilly, who was always an insightful and profoundly sympathetic observer of labor movements, suggested that labor ultimately might be unable to respond to the challenges of economic globalization due to the lack of a global government capable of enforcing labor rights (Tilly 1995). Others are more optimistic. Lowell Turner and his collaborators argue that new union strategies are engendering a revitalization of labor movements (Turner, Katz, and Hurd 2001). Peter Waterman sees unions shunning old international labor confederations for more dynamic networks of global social movement unionism (Waterman 1998). Beverly Silver indicates that the internationalization of production, far from hurting labor in developing countries, has allowed an explosion of labor activism from Brazil to South Korea as these new “forces of labor” use their industrybased power and exploit vulnerabilities in just-in-time production networks (Silver 2003). And Kate Bronfenbrenner and her contributors highlight how global corporate campaigns have exposed the weak underbelly of powerful corporations and opened the door for union success (Bronfenbrenner 2007). This book has been influenced by both groups of scholars, and my research on Latin America suggests reasons for both optimism and

4

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pessimism. Perhaps this is partly a result of the methodology I have chosen to use. Some of the optimistic literature begins by explicitly selecting the largest and most successful campaigns, which are often the ones that get the most attention in the international media. This approach provides some insights on big campaigns, but it fails to answer the more crucial questions for scholars of international labor activism: Why, how, and with what frequency did organizing campaigns turn to international solidarity for support? And when might unionists turn to more nationalist responses to globalization, including pacts with employers and the state? The bottom-up research strategy presented here, which surveys a large number of campaigns of unions of all political suasions, provides a more nuanced picture of the changing dynamics of labor solidarity while also shedding light on these questions. And these are not ideal questions. The fate of organized labor has an impact on society and politics. Effective labor movements improve wages and benefits, and also lessen income, gender, and racial inequality among workers (Freeman and Medoff 1984). They influence political dynamics too, and their decline in some countries has been attributed to a conservative shift in the political spectrum as well as declining voter turnout (Radcliff 2001). In Latin America, organized labor provided a check on authoritarian rulers and often contributed to democratization in the region (Drake 1996; Keck 1995; Levenson-Estrada 1994). It follows that the success or failure of labor’s new strategies will impact living standards, equality, and the dynamics of democracy. The success or failure of international labor solidarity will likewise affect multinational corporations and international political processes. In a word, labor is indeed still relevant. This is not the only reason for this study. How we study labor, labor movements, and international activism has relevance for broader social science research on political processes, social movement dynamics, economic development and international industrial restructuring. Let me begin with restructuring.

International Industrial Restructuring It has long been acknowledged that how goods and services are produced affects labor and labor unions. That is, to understand labor’s fate, a good

Introduction

5

place to start is the realm of production. Adam Smith envisioned how the capitalist division of labor would spur workers to organize (Smith 1976 [1786]). Karl Marx reflected on how capital brought labor together into ever-larger factories, and then speculated on how labor would use its structural and associational power to bring down capitalism (Marx 1977 [1887]). Much of the post–World War II literature shifted the emphasis from class conflict to an analysis of conditions that made a laborcapital compromise possible through more stable production systems such as Fordism, at least in developed countries (Katzenstein 1985; Kerr et al. 1960). As the postwar boom in unionism turned to stagnation and then decline in the 1980s and 1990s, a new body of literature sought to explain how economic shifts hurt labor. The most common account was that the breakdown of the Bretton-Woods stable monetary system and the first and second oil crises greatly burdened the old Fordist system of mass production. Managers of mass production facilities, who had grown accustomed to economic stability and steady growth, became unsure of what or how much to produce. Over time, the rigidities and other limitations of the production model made systemic change imperative (Piore and Sabel 1984). For some, the hope was that capital might pursue a high road, what they termed “flexible specialization,” in which labor, capital, and communities would benefit from relatively small, innovative enterprise groups (Piore and Sabel 1984). But most evidence suggests that such cases were the exception. Rather, in order to stay competitive, the labor-capital compromise was slowly eroded in favor of a system of global supply chains designed to keep firms competitive in part by keeping production costs (including labor costs) low. These systems relied on subcontracting and outsourcing built on webs of networks to cover their needs for everything from material and parts to production, services, and distribution (Harrison 1994, 24). Under internationally networked capitalism, it is not only what you produce, but what segment you produce during what part of the product life cycle that matters (Evans 1995). A country’s enterprises could concentrate in the “high-end” auto sector, but if they were making standardized auto parts at the end of a long outsourcing system, chances are that profit margins and wages in the firm would be low. Or a firm could be in the “low-end” garment industry, but if it were designing and developing new products, the firm and its workforce probably would be well off.

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The unit of analysis in this approach is not domestic industries but rather “global value chains,” business networks that entail product design, production, distribution, and sales that span states (Bair 2009; Gereffi, Korzeniewicz, and Korzeniewicz 1994). Even the simplest of items, such as a T-shirt, might be designed in San Francisco, use fabric made in Hong Kong, be sewn together in Honduras, shipped to Miami, and then sold in a mall in New Jersey. The global value chain (GVC) approach shifts the attention from national industries to lead firms, vertical and horizontal outsourcing, and sources of leverage and power among different actors along the supply network (Gereffi, Humphrey, and Sturgeon 2005; PatelCampillo 2010; Patel-Campillo forthcoming). In the apparel, footwear, and consumer electronics sectors, production had been reorganized in export processing zones in which locally based manufacturers produce under contract for multinational corporations (MNCs) that provide the material inputs and then re-export the final product. This has been a dynamic process, shaped not only by industry imperatives but also by political processes that influence international trade rules. For example, the phaseout of controlled trade in textiles and apparel contributed to a variety of forms of apparel production, in which some firms moved beyond cutting, sewing, and trimming apparel, to include textile production (Gereffi and Frederick 2010). In higher-end sectors like automobiles and heavy equipment, international outsourcing entails increasingly complex components and final assembly through modularization. Under this system, independent producers are located inside final assembly plants, make their components, and feed the final assembly line (Salerno and Carneiro Dias 2002). In both forms, this dramatic restructuring of production has been largely detrimental to labor movements since segmenting the work process increases cost-based competition and weakens labor’s collective strength. A labor strike at one geographically dispersed production site no longer packs the same punch as a strike at a traditional, centralized facility.1 At the same time, the MNC’s capacity to shift production from one site to another across the globe increases the pressure to keep wages low. Thus, labor has been losing power in its traditional area of strength, industrial manufacturing.2 If labor is unable to adequately respond to the challenges presented in the realm of production, it is unlikely that it will find solutions to its problems elsewhere. Moreover, as we will see in the

Introduction

7

next section, the economic sphere is not the only area that has experienced dramatic transformation.

State Transformation The forms and fortunes of national labor movements are intimately linked not only to economic shifts, but also to what states do or do not do. Without authority in the form of national states, there is no means to enforce rights, and without rights labor unions have little chance to develop into strong, stable, national movements (Tilly 1995). Prior to the mid-1800s, states were notably ill-equipped to enforce rights. Afterward, due to intense labor struggles in western Europe that demanded greater state protections, state authority and ability to defend labor rights also improved. Labor unions grew as a result (Tilly 1995). Of course, states come in a range of forms, which partly accounts for variations in labor movements. In the United States, pluralistic state structures contributed to a form of economistic, business unionism (Levi 2003). In continental Europe, societal corporatism engendered politically engaged social democratic unionism (Regini 1995). Within Europe, the centralized French state was conducive to a more centralized labor movement, whereas the decentralization of the Swiss state resulted in a more dispersed labor movement (Hanagan 2003). The top-down development model of the Asian Tigers engendered labor movements that were often highly subordinated to the state (Deyo 1989). In the formative years of labor movements in Latin America, unfavorable labor market conditions motivated labor to pursue alliances with populist governments (Collier and Collier 1991). This is because organizing a union or going on strike where over half of the workforce was either unemployed or underemployed was more likely to result in one’s dismissal and quick replacement than in an improvement in working conditions. Directly, or in alliance with political parties, unions pressured governing elites to enact labor laws that covered everything from the minimum wage and maximum working hours to benefits, including holidays and paid vacation time. Latin American labor laws followed the Iberian tradition where the state determined in great detail how, when, and where workers could

8

Chapter 1

form labor unions, bargain collectively, and strike. In extreme cases during periods of authoritarian rule, state security forces were used not only to curtail strike activity but also to imprison, torture, exile, or even assassinate labor leaders who had earned the displeasure of governing elites (Drake 1996). In Central America, extreme authoritarian rule contributed to radical unionism that often sympathized or allied with revolutionary movements (Montgomery 1982). Since states so intimately influence the development of national labor movements, it follows that a transformation in state structures has an effect on labor. Indeed, following democratization, there have been important variations in individual and collective employment laws, and state enforcement capabilities (Anner 2008; Cook 2007; Murillo and Schrank 2005). These variations suggest the need to compare and contrast labor relations dynamics on a case-by-case basis. This book examines the cases of four countries: El Salvador, Honduras, Brazil, and Argentina. Of these, the Salvadoran labor relations system has been least favorable to labor. Historically, the state used its extensive statutory powers to routinely deny legal recognition to new unions (Arriola and Candray 1994; Blanco 1997; Molina 1995). During much of the twentieth century—especially during civil war from 1980 to 1992—in a repressive form of “accumulation by dispossession” (Gill 2007; Harvey 2003), state security forces and death squads with ties to those security forces and economic elites were directly responsible for the killing of thousands of labor union activists. Democratization in 1992 and international pressure led to important labor law reforms. Yet, while it became technically easier for workers to form unions, it remained just as difficult to oblige an employer to negotiate a collective contract.3 And the state budget for enforcement remained woefully inadequate, reflecting the state’s anti-union orientation. From 1989 through 2009, El Salvador’s presidency was held by the right-wing National Republican Alliance (ARENA). In Honduras, the export sector was dominated by bananas, which entailed concentrated plantations and a stable workforce, which are factors that facilitate a stronger labor movement relative to countries with de-centralized agriculture and a predominantly temporary workforce (Bergquist 1986). This emerging movement organized a powerful banana workers’ strike in 1954 that forced the government to enact important

Introduction

9

social legislation. In the 1970s, under the presidency of the military reformer Oswaldo López Arellano (1972–1975), the union movement grew considerably (Meza 1991, 153). A new law ensured that all workers in unionized work centers paid dues, which made unions financially stable (Posas 2000). In general, the Honduras labor law was more permissive of unionization and collective bargaining than the Salvadoran law, although underfunding of the Ministry of Labor and corruption among state labor inspectors were issues. The government, unionists, and employers in Honduras established bipartite and tripartite mechanisms for resolving disputes (Interiano 2001). And while neither of the two historic political parties, the National Party and the Liberal Party, can be considered labor-based, they are not as extremely conservative as ARENA in El Salvador (Zoco 2006). But that dynamic would change with the election of Manuel Zelaya in 2006 and his subsequent removal from office with the right-wing coup d’état of June 2009. Brazil’s state labor relations institutions have their roots in the populism of President Getulio Vargas (1930–1945). Motivated in part by Italian corporatism, Vargas’s labor relations regime prohibited political activity, denied unions the right to affiliate with international organizations, prevented the use of union income for strike activity, and defined unions as “organs of collaboration with the State” (Antunes 1999 [1980], 46–47). The law also established that there could be only one union per economic category in a given geographical region. State control over labor unions deepened under military rule from 1964 to 1985 before democratization and constitutional reforms began a liberalization of labor controls and allowed for public sector unionization (Cook 2001; Stepan 1989). Yet the Brazilian reforms left numerous components of the corporatist regime intact. Labor courts held broad powers over the terms of collective bargaining and strike activity, and Brazilian labor laws continued to favor union formation on the sub-national level so that as industry expanded nationally unions were not able to easily organize new plants or automatically extend collective bargaining agreements to new work centers. And once a union was formed, all workers in that occupational category paid a union tax. Since ex-union leader, Luiz Inácio “Lula” da Silva became president in 2003, the state has increased the resources dedicated to enforcement. The Lula administration, via a tripartite National Labor Forum, also opened

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Chapter 1

the discussion of labor reforms that would allow for national unions and national collective bargaining.4 While Lula did not achieve the main objectives of his proposed reforms, some changes were implemented, such as the recognition of national labor union centers (Hall 2009). Argentina’s state labor relations institutions were strongly influenced by the populism of General Juan Perón (1943–1955). Unlike in Brazil, in Perón’s system of labor relations labor was incorporated into the political party through the governing party, not directly through the state (Collier and Collier 1991). Perón’s 1945 Law of Professional Associations allowed for one union per economic activity, one central union confederation, and automatic payroll deduction of union dues (McGuire 1997). It also allowed for union control over the welfare funds, which created a strong incentive for workers to join unions. Politically, the union movement had an extremely close relationship to the Peronist party, the Partido Justicialista (PJ). Many union leaders became ministers and members of Congress. Indeed, for much of its history, the Peronist party delegated a given percentage of congressional seats to the union movement (McGuire 1997). When Perón returned to power in 1973, he enacted a labor-contracting law that allowed for industry-wide collective bargaining agreements.5 Labor’s fate changed when the military came to power in 1976. Under the rule of General Jorge Videla, leftist base-level leaders in the union movement were killed or disappeared while many mainstream Peronist labor leaders were imprisoned (Drake 1996). Democratization and the government of Raul Alfonsín of the Radical Civic Union (UCR) restored many rights suspended during the military dictatorship (Drake 1996, 178). Alfonsín also removed the military’s prohibition of union participation in political activity (Ranis 1995, 48). The Peronists returned to power in 1989 with the election of Carlos Menem, who strayed from the traditional Peronist proclivity for big government and generous social programs. He used the Law of Economic Emergency to pursue market liberalization and more flexible labor contracts.6 Menem also limited the right to strike in the public sector and allowed for greater labor relations flexibility (Bronstein 1995; Córdova 1996). Yet the law left many aspects of the old system intact, include monopoly union representation, which greatly limited the ability of new unions to compete to represent workers (Murillo 2001; Novick and Tomada 2001). In effect, the legislation allowed traditional, pro-government unions to monopolize worker representation.

Introduction

11

In relative terms, the Salvadoran state (up until 2009)—with its history of labor repression and other anti-union practices—is among the least favorable to labor, whereas Argentina, with its state institutions favoring strong national unions and collective agreements, and influential political ties, is among the most favorable to labor. Honduras is closest to El Salvador, but somewhat less labor repressive, whereas Brazil is closer to Argentina yet absent the laws favoring strong national unionization.

Labor’s Interests and Collective Identities To answer the question of how labor responds to the economic and political changes discussed above requires a discussion of labor as a social actor. For some scholars, organized labor is the quintessential rational economic actor. Its goal is to extract a greater share of economic wealth from employers via higher wages and benefits and to protect its institutional survival (Golden 1997; Rogowski 1989). Yet, while history may be replete with examples of labor leaders pursuing narrow economic interests or even corrupt deals with employers, history also has its share of labor unionists who made significant personal sacrifices to defend the interests of their fellow members. Sometimes these activists have pursued their goals despite lifethreatening circumstances, as was the case of the Salvadoran labor movement in the 1980s and is so in Colombia today. A careful examination of labor movements suggests that labor leaders in the same country at the same time can often pursue very distinct strategies. For example, some labor organizations have worked with governments in support of free trade agreements—such as the official Mexican unions in the debate over the North American Free Trade Agreement (NAFTA)—while others, including the independent Authentic Labor Front (FAT) of Mexico, have vigorously opposed such agreement. These varied strategic responses do not reflect differences in the economic sectors represented by labor, but different worldviews (Dreiling and Robinson 1998; Robinson 2002). This is not to say that some labor activities are rational while others are irrational. Rather, this is to suggest that there may in fact be more than one rational way to pursue and defend one’s interests in a given circumstance. What differs is not the degree of rationality. Instead historical and

12

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ideological factors have influenced how labor activists come to perceive their interests and decide upon their course of action. In part, this suggests the need to understand something about how actors think in order to know how they might act (Sikkink 1991). But more is involved than individual cognition. Understanding actors’ strategies involves knowing something about how activists see themselves and others in the context of their struggles. That is, interests are socially defined and constructed (Therborn 1980). They tell us something about whom actors consider as their opponents and why (Della Porta and Diani 1999). When the Ecuadorian government was dollarizing the economy, a journalist asked a labor union protester to explain in concrete terms why he opposed the policy. The unionist, after a short pause, responded: “I don’t understand all the economics of dollarization, but I do know that this government has never pursued an economic policy that has helped the poor. That is why I am opposing this policy.” When complete technical information or knowledge is lacking, as is often the case, past experiences and understandings of “us” and “them” weigh heavily on the minds of social actors. For this activist, “we” workers cannot trust “them” in the government since they have always ruled on behalf of the rich against the poor. Strong collective identities also build stronger membership allegiances to movements, which are vital when movements confront more powerful employers and states (Robinson 2002, 118). But if identities are so crucial, we need to know how to identify and categorize labor’s political identities. Richard Hyman, who focuses on the European experience, divides labor identities into three ideal types: class-based, market-based, and society-based. Class-based identities reflect labor organizations that view themselves as engaged in a class conflict with employers. Market-based identities are held by labor groups who see their primary goal as achieving basic economic betterment for members through collective bargaining with employers. And society-based identities entail labor unions of a social democratic ilk pursuing social integration (Hyman 2001). Latin American labor movements have a long history of ideological diversity, with anarcho-syndicalism, communism, socialism, Catholicism, and nationalism all shaping labor activists’ sense of self and others (Godio 1985; Zapata 1993). Following the Russian Revolution, class-based identities came to dominate working-class cultures.7 The 1930s and 1940s saw a rise in populism in Latin America. In Brazil in the 1930s, as John

Introduction

13

Humphrey explains, populism changed unions from independent defenders of workers’ interests to “financially secure, bureaucratic welfare agencies” (Humphrey 1982, 15). The dominant identity of the labor movement was based on class harmony and collaboration with the state.8 In Argentina, the populism of Juan Perón also prioritized national cross-class harmony over labor and capital conflict. Labor came to identify with the benevolent populist and paternalistic ruler (McGuire 1997). The majority of the Argentine labor movement would maintain this Peronist, collaborationist identity for the decades that followed. In Central America during the 1930s, elites responded to the economic crisis with dictatorship, not populism, which contributed to the radicalization of a segment of the union movement and a more militant class-based worker identity. With the advent of the Cold War, labor’s leftist orientations earned the chagrin of the American Federation of Labor and Congress of Industrial Unions (AFL-CIO), which, with generous U.S. government funding, sought to modify labor’s ideas by forming the American Institute for Free Labor Development (AIFLD). One goal of the program was to get Latin American unionists to focus on short-term economic goals over long-term political objectives. AFL-CIO president George Meany explained: “We had to teach them basic economics. We had to teach them the relationship between salaries and productivity, something they were totally ignorant about” (quoted in Godio 1985, 215). In Honduras, following the massive banana workers’ strike of 1954 in which communist unionists played an important role, the AFL-CIO focused on transforming labor unions into moderate organizations. One Honduran unionist explained: After the strike, the AFL-CIO, the U.S. Embassy and ORIT 9 fell on us like a plague, offering us scholarships, study in Puerto Rico and all kinds of favours from our employers. . . . The U.S. consul overwhelmed us with visas. . . . Not only did the companies grant permission for us to spend months on leave, but those workers were favoured with the choicest jobs and placed as union leaders when they returned (quoted in Acker 1988, 85).

Honduras was not unique. Some 259,876 Latin American unionists passed through the AFL-CIO’s AIFLD school (Godio 1985, 215). The AFL-CIO thus helped build moderate union movements in Latin America.

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But the left unions survived. Many were impacted by liberation theology, which grew in influence following the 1968 Latin American bishops’ conference. At the conference, the Catholic Church called upon the religious community to “defend the rights of the oppressed [and] denounce the unjust action of world powers that works against self-determination of weaker nations” (cited in Montgomery 1982, 99). The Cuban revolution further inspired the radicalization and growth of the union movement in several countries in Latin America. These unionists believed that ultimately improvements in the conditions of working people could only be achieved through radical social transformation. These unionists’ concept of class was inclusive. They referred to the “popular” sector, which was made up not only of wage laborers, but also informal sector workers, poor peasants, the landless, squatter communities, and marginalized indigenous peoples. Theirs was a self-declared “popular social movement.” And the recent boom in apparel export production, with its predominately female workforce, has brought gender identities into many labor organizations, albeit with some reluctance on the part of more than a few male labor leaders. By the end of the Cold War and into the current era of economic globalization, the difference between radical and conservative labor identities was reduced. However, a division still remained between those broadly adhering to a left worldview built on a class-based identity and those with a moderate orientation, based on some form of cross-class collaboration. Since, as I have argued, labor’s strategies are shaped not only by economic and institutional structures, but also by labor identities, continued difference in labor’s worldviews suggests continued variations in labor strategies.

Explaining Labor’s Responses to Globalization Given the importance of economic restructuring, state transformation, and labor identities, how might we explain labor’s responses to new challenges? First, the lack of access to state institutions creates a strong incentive to find alternative strategies. That is, where labor relations regimes are unfavorable to labor due to poor laws, weak enforcement capacity, or limited political access to the state, labor unions will have a strong incentive to

Introduction

15

pursue new strategies that go outside the formal mechanisms of the labor relations regime. An unfavorable labor relations regime exacerbates the challenges presented by economic restructuring. Indeed, one of the most common challenges facing labor is that state institutions fail to keep pace with the exigencies of new economic realities. Global value chain restructuring further affects labor strategies due to variations in governance structures. Economic sociologist Gary Gereffi makes a distinction between “producer-driven commodity chains” and “buyer-driven commodity chains.” Buyer-driven chains, which include apparel and footwear industries, refer to industries in which large retailers and brand-name merchandisers dominate the governance structure of the production networks. In producer-driven chains, which include the auto industry, the producer MNCs play the central role in controlling the production system (Gereffi 1994, 97). These variations in structures will require distinct labor strategies. The final factor shaping labor strategies is labor itself. The class-based and anticapitalist orientation of left-oriented unions, combined with a historic distrust of state institutions, should make them more predisposed to reject domestic cross-class alliances and to seek domestic and transnational class-based alliances. In contrast, for conservative and moderate unionists a more likely course of action is to establish pacts with employers.10 This predisposition to internationalism or collaborationism is only the beginning of the argument. What is important is how global value chain governance structures and labor identities interact to shape four labor responses to globalization, as we will see next.

Labor Transnationalism Let us start with left unionists in Gereffi’s buyer-driven commodity chains. The paradigmatic case of a buyer-driven chain is apparel, where lead firms include major retailers like Wal-Mart and Target, and branded apparel companies like Nike and Gap. This is the world of manufacturers without factories. Production is outsourced in a system in which many similar suppliers compete for contracts with retailers and brand-name manufacturers in a highly cost-competitive environment. Low costs of entry make factories hyper-mobile, able to move from region to region and country to country with relative ease in response to a range of factors, including rising

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wages, political changes, labor unrest, or new regulations. The high costcompetiveness and mobility of the sector contributes to low wages, long hours and forced overtime, and inadequate health and safety standards. The vulnerable, mostly female workforce is inclined to experience gendered forms of discrimination (Collins 2003; Tiano 1994). The economic conditions described above and high worker turnover rates result in weak structural and associational (organizational) power for labor (Silver 2003; Wright 2000). But workers are not powerless. First, as Sidney Tarrow suggests, resource-poor actors often turn to protest because disruption is a form of power (Tarrow 1998). At the same time, the harsh conditions in buyer-driven value chains allow grievances to be framed in terms of basic human rights that resonate with broader publics. Since control lies on the retail and brand-name manufacturer end of this commodity chain, left labor unionists will have an incentive to form alliances with activist organizations such as women’s groups, human and labor rights organizations, and student organizations that have legitimacy and can maximize the shaming mechanism as they pressure leading apparel firms through consumer-oriented campaigns.11 These actions constitute what I have labeled transnational activist campaigns (TACs). In producer-driven chains, the dynamics are in many ways the polar opposite of buyer-driven chains and TACs. The automobile sector is the paradigmatic case of this commodity chain. Here control rests not with retailers (or auto dealerships, as the case may be) but rather with production headquarters in places like Detroit for Ford and Wolfsburg for Volkswagen. Outsourcing is more vertical. Assembly plants in developing countries remain at least partially owned by the auto giants. Even the major auto suppliers are highly centralized multinational firms. This is not the hypermobile world of no-name sweatshops that move from country to country. Heavy sunk costs in technology and worker training result in more stable production sites and a more stable and educated workforce. Workers’ demands are not focused on below-subsistence wages, gender discrimination, or forced overtime. Rather, here the concern is on retrenchment resulting from overproduction, worker representation in the form of local and global works councils, the introduction of new technology, and restructuring in the form of modular production. Labor power can be structural and associational, where structural power refers to location of workers within the economic system and associational

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power refers to collective organizations of workers (Wright 2000). Vertical outsourcing is more structurally vulnerable to disruptions caused by strikes than the horizontal outsourcing system in apparel. At the same time, job stability and large factories facilitate unionization and thus associational power. When left-oriented unionists do decide to pursue international activism, they are less likely to rely on shaming mechanisms (normative power) via media exposés and TACs. Rather, they tend to build ties to other labor unions in the foreign countries where auto MNCs have their headquarters. These union-to-union relationships are more stable than anti-sweatshop activist campaigns. Workers in producer-driven chains are thus more likely to form what I have labeled transnational labor networks (TLNs). These two forms of global commodity chain labor internationalism are outlined in table 1.1.

TABLE 1.1 Global commodity chain internationalism Governance

Buyer-driven

Producer-driven

Commodity

Apparel

Autos

Center of GCC control

Retailers, brand manufacturers

Production headquarters

Structure of production

Decentralized, horizontal

Centralized, vertical

Capital investments (plant mobility)

Low (High)

High (Low)

↓

↓

↓

Target of international activism (examples)

Retailers, brand manufacturers (Wal-Mart, Nike, Gap)

Production headquarters (Ford/Detroit, Volkswagen/ Wolfsburg)

Core workers’ issues

Low wages and long hours, women’s rights, union recognition, worker dignity

Job stability, new technologies and de-skilling, wages and benefits, in-plant worker representation

Sources of worker power

Social movement activism, boycotts, and shaming mechanisms (norms)

Structural and associational

Core international allies

Labor, human rights, student and women’s groups

Labor unions

Duration of alliances

Short

Long

↓ Form of internationalism

↓ Transnational activist campaigns (TACs)

↓ Transnational labor networks (TLNs)

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Domestic Cross-Class Collaboration Not all labor organizations are inclined to respond to international restructuring by embracing global commodity chain internationalism. Some unions with a more conservative or moderate labor identity will tend to pursue their goals domestically. These groups are inclined to favor modest social reforms. Many in these unions have their roots in corporatist and Catholic labor organizations that rejected class conflict. Over time, these groups tempered their extreme anticommunism but maintained their collaborationist worldview. For moderate unionists, who often are distrustful of foreign activists, the more likely course of action is to establish pacts or agreements with employers. This may be accentuated when employers feel particularly threatened by unionization by left-oriented unions. That is, employers may be inclined to accept pacts with moderate unions in order to block left unionization. This radical flank mechanism can be an important source of power for moderate unions, often complementing their local organizing efforts. As for left unions, collaboration takes different forms depending on the structure of the value chain. In the low-end industries like apparel, agreements or pacts with employers are often short-lived, with relatively limited benefits for workers. In some extreme cases they may be clientelistic in nature, where union leaders negotiate deals with employers that exchange subordination for material reward. In the auto sector, the relative stability of the employment relationship and the high value added generated per employee allow for a more sustained relationship built on teamwork and partnership, or what some authors have referred to as microcorporatism (Regini 1995; Wells 2001). These four responses reflect probabilistic arguments and not deterministic claims. At times, autoworkers will frame their campaigns in terms of normative values and seek support from nonlabor actors. Apparel unionists may develop routine and institutionalized transnational relations through global union federations or other organizations. And some moderate unionists may find occasion to use international activism, while some leftist labor actors may be tempted by the occasional pact with an employer. My argument depicts general trends that suggest that labor has had choices. These choices, as we will see ahead, have influenced whether or not the transformation of labor solidarity could also modify economic and

Introduction

19

political structures in some way, no matter how small, to ensure greater benefits for labor. If so, new forms of labor solidarity could also transform societies.

Methods and Data My research strategy combines in-depth case studies with an analysis of a large number of campaigns over an extended period of time. Case studies were selected based on differences in my main explanatory variables. For variation in industrial structure, I selected one buyer-driven commodity chain, the apparel sector, and one producer-driven commodity chain, the auto sector. I chose two countries where apparel was the primary industrial activity, but otherwise had important differences in state structures (El Salvador and Honduras). Similarly, I chose two countries where auto production was the primary industrial activity, but with significant differences in state structures (Brazil and Argentina). Finally, for variation in labor identities orientation, I selected the main left-oriented labor unions and the main moderate labor unions in each country. (See figure 1.1 for case selection and anticipated labor responses.)

Unfavorable state/ economic restructuring

Global commodity Political identity chain Leftist

Union response Transnational activist campaigns (Response #1)

Buyer-driven (apparel) Moderate

Radical flank/clientelism (Response #2)

Need for new strategies Leftist

Transnational labor network (Response #3)

Moderate

Microcorporatism (Response #4)

Producer-driven (autos)

Figure 1.1 Labor’s four responses to globalization

20

Chapter 1

To study the union strategies and their impacts, I conducted over one hundred structured interviews with labor activists, managers, government representatives, and NGO activists during eighteen months of research in the region between 2001 and 2010. For my Central America apparel cases, in addition to several in-depth cases, and I conducted a survey of labor responses in fifty-nine campaigns. In the larger and more centralized auto sector, there were far fewer factory cases to study, and most unions had been formed decades ago. But I was able to trace the evolution of several labor networks over a twenty-year period and explore campaigns organized by these networks. For added variation, I studied labor responses in two U.S. auto firms (Ford and General Motors) and two German auto firms (Volkswagen and DaimlerChrysler).

What’s to Come This book begins by examining how international industrial restructuring has impacted labor and created the need for new labor strategies. Each of the chapters that follow focuses on one of the four labor responses outlined earlier. In chapter 2, I explore the processes of international restructuring in the apparel and auto industries. I look at how the MNC strategy to contract out segments of the production process to independent firms weakened union bargaining power at the plant level in these industries. Data are presented on my four country cases that suggest the degree to which industrial changes have resulted in a decline in wages and union representation. Chapters 3 and 4 examine union responses to economic restructuring in the apparel sector in El Salvador and Honduras. In chapter 3, I explore how left unions turned to new forms of local organizing and transnational activism to target MNCs through consumer awareness campaigns and local organizing efforts. In chapter 4, I examine how moderate unions shunned transnationalism in favor of clientelistic pacts with employers at the plant level. I also explore how these unions established these pacts using the threat of unionization by leftist unions through a left-flank mechanism. We also see in these cases important examples of transformations in labor identities, which subsequently influenced changes in labor strategies.

Introduction

21

Chapters 5 and 6 explore how unions responded to international industrial restructuring in the auto sector. Chapter 5 focuses on left unions in Brazil and the formation of transnational labor networks. Here I present a summary of transnational labor activities ranging from information exchange to strike solidarity and collective bargaining. In chapter 6, I explore moderate auto union responses, which at times benefited from the threat of left unionization, and, due to the stability of employment relations, were conducive to microcorporatist labor-employer pacts. Chapter 7 explores the precarious path ahead for labor between the possibilities of solidarity and fragmentation. This final chapter also broadens the purview of my framework to explore recent labor activism in the service and informal sectors of the economy, as well as labor’s efforts to influence international financial institutions like the International Monetary Fund and the World Trade Organization (WTO). I also delve into the deeper salience of my work on how scholars might study labor and other social movements in the global economy. I conclude by suggesting why this all matters, for workers and those concerned about their plight.

2

Segmented Production, Fragmented Labor

“Your union jobs at that old sugar cane processing plant are gone for good, so it seems the best you can hope for is a good severance pay package,” a labor lawyer at the Salvadoran Center for Labor Studies (CENTRA) explained one morning to thirty middle-aged workers. As I looked around the room, no one seemed surprised. They would receive about one month’s salary for every year worked, which would get them by for another year or two. But what would they and their families do to survive afterward? An answer came to me in the afternoon as I observed a different meeting. “We can’t take it anymore,” an unorganized apparel worker complained to the same CENTRA labor lawyer. “The overtime hours are killing us. I’ve gone twenty-one days without a day off. And the managers are very abusive. They are constantly increasing our production quota and the wages are low.” The worker looked to me like she was young enough to be a daughter of one of the fired processing plant workers.

Something changed in the way poor countries produced and distributed goods that had a profound effect on who found employment and who did not, how work was organized, and whether workers could form labor unions and improve their conditions. The sugar processing plant, with its union jobs, living wages, and middle-aged workforce, was part of the old economy. The apparel production, all done under contract for large multinational corporations, was part of the new low-wage, nonunion, young, and mostly female export economy that had swept the region. In this context, the family survival strategy of an unemployed middle-aged worker might be to send a teenage daughter to work in an apparel export plant. The wages of the daughter, however, could be as little as half of what the parent made.

Segmented Production, Frag mented Labor

23

Employment relations scholars have long assumed that where industry goes, wage gains and union growth will follow. Industry concentrates workers and is conducive to productivity gains that can translate into higher wages. At the same time, industry provides relatively stable employment that allows for the development of a strong worker identity, which in turn facilitates unionization. Indeed, declining industrial employment in developed countries has been linked to the declining fortunes of organized labor. Where do these northern industrial jobs go? Some, no doubt, are relegated to a bygone era, forever to be replaced by machines and more efficient forms of work organization. Other manufacturing jobs have been outsourced to developing regions like Latin America. Yet the old assumption that industrial jobs lead to better incomes and stronger unions did not seem to still apply in the era of international industrial restructuring in developing countries. This is because something was transformed in the way industry was organized when multinational enterprises moved their production operations over the Rio Grande and south through Central America and South America.

International Restructuring and Labor Karl Marx famously suggested that it was capital that “organized” labor by bringing large groups of workers together in the massive factory system of the industrial era (Marx 1977 [1887]). This is what he and Engels meant by capital producing its own gravediggers (Marx and Engels 1992 [1848]). But if capital has the capacity, through the structures of production, to organize labor, it seems that it might have the power to disorganize labor as well. Recent patterns of industrial restructuring and internationalization provide evidence for this possibility. As economic geographers have noted, a product that was once made start to finish behind the four walls of one factory is now more likely to be produced using components made by countless smaller units, then assembled by a group of workers elsewhere (Dicken 1998; Herod 2001). There are many reasons why this restructuring has a debilitating effect on labor’s power. Labor in internationally restructured industry is now often dispersed and divided by language, culture, and distance. This undermines the ability of workers to communicate across borders while also increasing

24

Chapter 2

the social distance between workers and upper-level managers who are located in their home countries (Brady and Wallace 2000). In cases where corporations have numerous factories producing largely identical products across the globe, the ability of workers to leverage for higher wages through strike activity in one factory is greatly reduced. That is, workers have weak “positional power” due to their unfavorable location within the industry’s hierarchy of economic power (Perrone 1983). Cost structures are also transformed in ways that are detrimental to production workers. In the old, traditional, “full-production” systems, a firm purchases its production inputs, transforms the inputs into the final product, and then sells its product. Under internationally segmented regimes, MNCs purchase inputs in one location and ship them to independent firms in another location, companies under contract by MNCs that transform the inputs into a final product or into a component of the final product.1 The MNCs, which own the final product, distribute it to retailers, or sell it directly to consumers (see figure 2.1). In the traditional system, producers could negotiate the price of inputs or change suppliers to keep costs low. In the segmented system, this is not possible. Here the multinational firm, not the factory owner, purchases the inputs. This means that labor costs as a percentage of total costs for assembly plants is much higher in segmented systems, which, as economist Alfred Marshall observed long ago, reduces labor’s bargaining power since there is less of a margin to increase wages without adversely affecting the viability of the enterprise (Marshall 1920). For example, workers demanding a wage increase where labor costs are 80 percent of production costs will face much stiffer employer resistance than workers demanding a wage increase where labor costs are only 10 percent of production costs. Secondly, in the traditional system, the producer sells the final product directly to the consumer or through retailers. When production costs increase, these traditional firms have the option of raising the sale price of the goods they make. In the segmented system, the multinational enterprise never relinquishes ownership of the final product and thus the supplier firm cannot benefit from an increase in the sale price.2 The result of both these processes—high labor costs as a percentage of total costs and an inability to increase the sale price—create pressures on firms to keep wages lower than in traditional manufacturing. These structural constraints faced by small suppliers became apparent to me when I visited an apparel export factory in El Salvador for the first

Segmented Production, Frag mented Labor

25

1. Traditional production regime

Input

Assembly plant

Sale

2. Internationally segmented production regime MNC

Input

Assembly plants

Sale

Figure 2.1 Traditional versus segmented production regimes

time. The owner was a Cuban-American woman living in El Salvador, Rosa Hernandez.3 Rosa made girls’ dresses for Kmart, which supplied her not only with the patterns for the design of the dresses but also with all of the material needed to make them. For sewing the dresses and packaging them for export, Rosa was paid one dollar per dress. Her cost structure was tight, but Rosa was able to cover her expenses and still have something left over for her income. Since all the material was imported, and since there was no need to cover transportation costs or advertising expenses, her biggest expense was her workers, whom she paid the minimum wage. Workers who exceeded the daily production quota were given a bonus. Those workers who failed to meet the production quota were dismissed. Then the Salvadoran government raised the minimum wage by approximately 10 percent. Suddenly Rosa’s finances were in the red. She

26

Chapter 2

could not pay the workers the higher wages mandated by law and still produce the dresses for one dollar a piece. She decided to call Kmart and explain her predicament. Kmart’s response was quick and clear: it would not alter its one-dollar-per-item price. If Rosa could not produce the girls’ dresses for that price, then Kmart knew of many other factories in the region that would accept the contract. Listening to the sound of sewing machines buzzing around me during my visit, it was clear that Rosa had managed to keep the contract. When I asked her how she had done it, she told me that she had increased workers’ daily production quota by 10 percent. Now if workers wanted to keep their jobs they needed to produce 10 percent more than they had before. Their productivity increase would compensate the mandatory wage increase. Rosa’s case illustrates the structural constraints of global supply chains. Faced with increased labor costs, Rosa could not reduce production costs by purchasing better-priced material because the material was not hers to buy. Nor could she pass the wage increase on to consumers through higher sales prices because the product was not hers to sell. Kmart squeezed Rosa, and Rosa was forced to squeeze her workforce in order to stay in business. Economists refer to this top-down ability of retailers to squeeze suppliers as “supply-chain monopsony.” Monopsony is, in one sense, the opposite of monopoly. A monopoly firm controls one product, such as Microsoft and its Windows software program, and is able to charge consumers a high price due to the inability of consumers to get the product elsewhere. With monopsony, a large firm is able to force its suppliers to accept very low prices for their assembly services due to the suppliers’ inability to sell their goods or assembly services elsewhere. There are tens of thousands of small “Rosa” firms spread across the developing world competing for a limited number of production contracts with companies like Kmart and—more often—the retail giant Wal-Mart. In the higher-end industries like autos, globalized production networks produce similar types of pressure, but in different forms. Like the apparel sector, old, centralized factory production that uses local inputs and sells final products on the domestic market are becoming a feature of the past. Trade liberalization has allowed auto producers to source (receive) their inputs from global suppliers and export their final products to wherever market demand is strongest. Unlike the apparel sector, the big, multinational auto companies still control the production process. However, auto

Segmented Production, Frag mented Labor

27

firms like General Motors, Volkswagen, and Ford are now outsourcing the production of increasingly complex components known as modulars to independent firms who are located inside the production facility. Before examining modular production, let’s first look more closely at the global apparel industry and export processing zones.

Industrial Restructuring, Labor, and the Global Apparel Industry Segmentation through Export Processing Zones The most explicit manifestation of the spread of segmented apparel production in low-wage countries is the boom in export processing zones (EPZs), industrial parks in which imported materials are processed and reexported (ILO 2002a, 1). Prior to the mid-1960s, there were only two EPZs in developing countries. By 2006, there were 3,500 EPZs in 130 countries.4 Employment in the zones reached sixty-six million workers, of which forty million were in China (Singa Boyenge 2007). EPZs have been promoted by international institutions such as the U.S. Agency for International Development (USAID) and the World Bank. Representatives of these institutions argued that, following the model set by the Asian Tigers, the best way to integrate poor countries into the world economy is to begin with export-oriented apparel production. International agencies, such as USAID, provided much of the initial funding to construct EPZs. To further promote this export sector, poor countries provided almost complete tax exemptions to businesses operating in EPZs. All material was imported, and when U.S.-made textiles were used in the Caribbean Basin they could be imported tariff-free. Almost all products made in these zones, by law, had to be exported.5 The zones themselves were fenced-in enclosures with security guards and customs officials at the gate. Many zones came to include cafeterias and even health clinics, which, in addition to the services they provided, also minimized the amount of time workers needed to be away from the workplace to eat or—more significantly—to attend to health-care needs. They were, in effect, social and economic enclaves within developing countries, disconnected from local production networks and social services (see figure 2.2).

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Chapter 2

Exports by MNCs to northern markets

Clinic

Factories Entrance (Security)

Cafeteria Customs Warehouse

Factories Administration

Fabric, etc. imported by MNCs

Tax Exempt Figure 2.2 Model of export processing zones

The EPZ system forced countless small producers located in scores of developing countries to compete for production contracts with a limited number of large apparel manufacturers and retailers based in developed countries, such as Gap, Liz Claiborne, Nike, and Wal-Mart.6 In 2003, the San Francisco–Gap alone had three thousand factories in fifty countries producing its products.7 Control in this system lies not on the production end but on the retail end. That is, the apparel industry represents a classic case of a buyer-driven commodity chain (Gereffi 1994). Under the traditional EPZ system, retailers’ production orders often fluctuate dramatically. One purpose of outsourcing is to shift the risks associated with market dynamics downward to the contractors and subcontractors. Orders peak for back-to-school shoppers, holidays, and seasonal shifts. Between these periods, production orders drop. For local firms, rather than hire a large workforce and worry about paying benefits and base wages during lulls, the better strategy is to hire a smaller group of workers and force them to work long overtime hours during peak periods. Cost structures and production exigencies result in practices that have given modern global sweatshops their name. One survey on EPZs revealed: “Problematic factors such as high labour turnover, absenteeism, stress and fatigue, low rates of productivity, excessive wastage of materials

Segmented Production, Frag mented Labor

29

and labour unrest are still too common in zones” (ILO 2002a, 21). Under such a system, unionization is seldom tolerated. Some countries go so far as to suspend application of their labor laws to firms operating in EPZs. One survey found that the most frequent complaint of workers’ organizations was related to violations of the right to form labor unions (ILO 2002a). Some scholars argue that, while wages are not high in EPZs, they are better than wages received by low-skilled women workers in other employment sectors (Moran 2002).8 Such an analysis downplays persistent gendered-forms of exploitation typical in this manufacturing export sector (Caraway 2007; Collins 2003; Tiano 1994). It also does not take into consideration the significant government economic incentives EPZs receive that other sectors do not receive. But even more importantly, as revealed by an examination that follows of the Salvadoran and Honduran cases, wages in EPZs are often not better than in other comparable sectors. More dramatic still, unionization is far less likely in the EPZ sector than in other sectors of the formal economy. Labor and Export Processing Zones in El Salvador The first EPZ in El Salvador was built in 1974 in San Bartolo, just outside San Salvador, with generous U.S. government funding. The Americans were enthusiastic about the success of the Asian Tigers and convinced that civil conflict could be avoided through economic development. But civil strife was already growing, and the limited number of jobs provided in the one EPZ was not able to resolve the massive economic problems of the country. By 1981, El Salvador was in the midst of a large-scale and very violent civil war, and plans to expand the EPZ sector came to an abrupt halt. When the war ended twelve years later, the U.S. government returned to its vision of economic growth through EPZs. USAID established a fund of $26 million to build several industrial parks. But, unlike the 1970s when the San Bartolo zone was publicly owned, in the 1990s the money was put at the disposition of private Salvadoran investors (Arriola 1993). The policy shift to export promotion through privately owned EPZs was part of a larger market-oriented economic model that included the privatization of public services, the elimination of price controls, and trade liberalization. Over the course of the 1990s, EPZ production boomed. While in 1975 there was only one EPZ in El Salvador with 150 workers, by 2007 the total employment in the sector reached 134,000.9 In 2009, the value added

30

Chapter 2

generated by EPZ production was $648 million,10 far surpassing that of coffee, which had been the biggest Salvadoran export for over a century. Manufacturing jobs were flowing into this developing country. But what did all this mean for Salvadoran workers, particularly young women workers? Impact of EPZs on Working Conditions and Unionization in El Salvador The Salvadoran government estimated in 2002 the cost for a family of five to meet its basic needs of food and housing to be approximately $450 per month while wages paid in the Salvadoran EPZ sector averaged $171.31 per month (BCR 2002, 14). At the same time, the average wage in the traditional manufacturing sector was $389.60 per month (BCR 2003, 20). The most comparable sector to the textile sector is the food sector due to its similar level of low value added per employee. A report by the Ministry of Labor in 2002 showed that textile workers (75 percent of whom worked in EPZs) earned 35.29 percent less than workers in the food, drink, and tobacco industries.11 Employers do not deny the low wages that they pay in the EPZ sector, even to managers. Indeed, they often advertise their low wages in order to attract foreign investment. One EPZ website announced: “The minimum wage in El Salvador is an unbelievable $0.69 per hour. An experienced, college-educated, English-speaking middle-level manager earns from US$12,000–15,000 annually.”12 Extreme competition and supply-chain monopsony have meant that wages have not kept pace with productivity gains. Between 1993 and 2002, while production per employee increased by 134.03 percent, base-level compensation increased by only 35.64 percent. The nature of this wage-based competition became even more apparent in 2003 when state representatives, employers, and unions began debating whether to increase the minimum wage. It was a remarkable debate because it illustrated not only employers’ and the government’s desire to keep wages low, but also their motivations. Elías Antonio Saca, then-representative for the National Association of the Private Sector (ANEP) and Jorge Nieto, minister of labor, argued that since in the EPZ sector “80 percent of production costs are in salaries” the sector risked losing its ninety thousand jobs if there was a large increase in the minimum wage (Prensa Grafica, May 1, 2003, emphasis mine).13

Segmented Production, Frag mented Labor

31

The debate over EPZ wages and the quote above by Saca and Nieto provide two crucial pieces of evidence for my argument. First, when discussing the issue of whether or not to raise the minimum wage, there was no room to put a positive spin on the situation by talking about how much better off EPZ workers were relative to other sectors. Both the government and the employers explicitly argued that EPZ workers had to be paid less than other formal-sector workers. Second, they argued that the high labor costs as a percentage of total costs made any significant increase in the minimum wage untenable. On May 23, 2003, labor and business representatives agreed to a differentiated minimum wage increase, where the commercial and service sectors would get a 10 percent increase, the industrial sector would get a 7.5 percent increase, and the EPZ sector would get a 5 percent increase. Keeping wages low requires more than government willingness to curtail minimum wage increases. Since unions tend to push up wages and benefits, employers have done everything in their power to keep unions out of their factories. Research showed that 80 percent of EPZ workers believed that if they joined a union, they could be fired, blacklisted, or otherwise punished. Indeed, from 1995 through the first six months of 1996, 5,044 workers were fired in the Salvadoran EPZ sector for union-related activities (García 1996). According to the government’s own data, while the manufacturing sector had a unionization rate of 9.83 percent, the unionization rate in the EPZ sector was 0.59 percent (MTYPS 2001). My own detailed survey of the sector found that between 1980 and 2004, the average unionization rate in the EPZ sector in El Salvador was 0.46 percent. In addition, there has not been a single case of workers successfully negotiating a collective bargaining agreement. In the traditional manufacturing sector, over 15 percent of workers are covered by collective bargaining agreements. Examining these trends over time, we see that as the segmentation of the manufacturing sector increases, the unionization rate in manufacturing decreases. I measure segmentation by taking the annual employment figures for the EPZ sector and dividing by the total employment figures for all manufacturing sectors. Prior to the 1990s, employment in EPZs made up less than 2 percent of manufacturing employment. By 2004, it increased to 28 percent of manufacturing employment. The unionization rate in

32

Chapter 2

30.00% 25.00% 20.00% 15.00%

Segmentation

10.00%

Unionization

5.00% 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004

0.00%

Figure 2.3 El Salvador: Segmentation and unionization rates in manufacturing Source: Central Reserve Bank and the Ministry of Labor of El Salvador

manufacturing dropped from 18 percent in 1976 to just over 3 percent in 2004 (see figure 2.3). The Salvadoran case suggests that the segmentation of the apparel industry through EPZs was conducive to lower unionization rates and lower wages relative to the traditional manufacturing sector. High levels of competition, supply-chain monopsony, and high labor costs as a percentage of total production costs created an employer imperative to keep wages low and unions out. And union attempts to organize workers, at least in the early years, resulted in repeated failures because the segmentation of the production robbed workers of the leverage normally afforded collective actions. Isolated strikes in one small supplier were unable to have any real economic impact on the global production system. For Honduras, the story would be much the same, although the slightly more favorable state structures did provide labor with some advantages. Labor and Export Processing Zones in Honduras Although Honduras was not immune from the occasional death squad killing of union leaders, it did not have the misfortune of descending into a full-scale civil war in the 1980s. This relative peace allowed Honduras to expand its export processing production earlier than elsewhere in Central America. The

Segmented Production, Frag mented Labor

33

first EPZ began operations in Honduras in 1976 in Puerto Cortés, and by the early 1990s EPZ employment had reached thirty thousand.14 As in El Salvador, EPZ production quickly became the lead export sector. By the late 1990s, the value added of EPZ sector exports surpassed the combined value of coffee and banana exports, Honduras’s most important products for overseas markets since the early twentieth century. By 2008, 119,000 workers were employed in thirty-nine EPZs. Yet the twenty-five-year experiment with export-oriented activity, fueled by tax incentives and subsidies, did little to make Honduras look like Singapore, Taiwan, or South Korea, those elusive models of export-oriented success. Rather, Honduras remained mostly stuck in a low-wage, low-skill form of production. In the late 1990s, some 68.4 percent of export assembly production was in apparel (BCH 2001). In 2008, apparel exports accounted for 78.5 percent of assembly exports (BCH 2009). That is, over this ten-year period, the share of apparel exports (considered the lowest end of assembly exports) actually increased. Job growth in the apparel export sector was concentrated among poor, young workers with limited formal education. The majority of these workers are women, although by 2008 43 percent of apparel workers in Honduras were male (BCH 2009). This indicates that, when the availability of women workers declined as the industry mushroomed, many employers decided youth was more important than gender: rather than hire older women, they hired young men. Many of these workers sacrificed their high school studies to support their families. Even given all this, were these jobs good opportunities for these young, mostly female workers? Impact of EPZs on Working Conditions and Unionization in Honduras The Buena Vista EPZ entices foreign investors noting that in the EPZ sector “[l]abor is abundant, diligent, trainable and low cost.”15 This is not faulty advertising. In the 1990s, the average compensation in the EPZ sector was $127.50 per month. At the same time, the average monthly compensation was $217.57 in the traditional manufacturing sector (BCH 1993, 15, cited in Moncada and Cordero 1996, 231). In 2008, the government calculated that the minimum wage (which was received by most EPZ workers as a base wage) only covered 62 percent of what a family of five required to cover its basic monthly needs (CAR 2008).

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As in El Salvador, the labor-cost pressures associated with segmented production revealed themselves in 2008 as employers, unions, and government representatives debated whether to increase the minimum wage. Labor unions pressured for a raise in the minimum while EPZ employers lobbied vigorously against any increase. One EPZ factory manager noted, “If the government increases the salaries, it would be the last blow to us.”16 As a result of employer pressure, and much to the chagrin of workers, the government of Honduras decided to increase the minimum wage for all other formal urban and rural workers while excluding the EPZ sector. The below-subsistence base wages forced many workers to work long hours in order to accrue overtime pay. In one visit to an EPZ factory in Honduras, I noticed another survival strategy. After a buzzer sounded for lunch, I saw several women still diligently working behind their machines. I asked the manager who took me on the tour why these women did not take their lunch break. He responded that perhaps they were trying to make a little extra by producing more, or perhaps they were afraid they “wouldn’t make quota.” Like Rosa in El Salvador, the Hondurans set daily production quotas to force workers to work harder. The practice greatly reduces the need for line supervisors since workers police themselves to work harder. Yet it is not legally possible to pay a slow worker less than the minimum wage. As a result, employers often combine the two systems. Legally, everyone should at least get the minimum wage. Yet, to keep their jobs, workers must meet a daily production quota. Workers afraid that they will not meet their quota will often forgo breaks and meals in order to produce more. Workers who go beyond the daily production quota are given bonuses, which encourage even the quickest workers to push themselves harder. This rapid work pace and long hours lead to high rates of worker burnout and turnover in the EPZ sector.17 As in El Salvador, an increase in segmented production through EPZs also led to a decline in unionization rates. The U.S. State Department (which had encouraged the formation of EPZs) observes: “There was credible evidence that blacklisting occurred in the assembly manufacturing for export firms. . . . Employers have told previously unionized workers that they are unemployable because of their previous union activities” (U.S. Department of State 2003, 343).

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35

In Honduras, due in part to the more favorable labor laws, the impact of segmented production on unionization was not as great as in El Salvador. Yet it was significantly lower than in traditional manufacturing. At the peak of the EPZ production boom, in 2000, the average unionization rate in the EPZ sector was 6.35 percent. The average unionization rate in the traditional manufacturing sector was 20.97 percent.18 In one study, I compared and contrasted unionization rates in the EPZ sector and traditional manufacturing while taking into account the political and labor relations differences between El Salvador and Honduras. (I also took into account unemployment rates and levels of trade.) What I found was that unionization was indeed lower in both countries in the segmented production regimes, but also that the relatively less adverse political and labor relations factors in Honduras helped mitigate some of the impact of segmentation (see Anner 2011). Moreover, workers in ten factories were covered by collective contracts in Honduras while no workers were covered by collective contracts in El Salvador.

Changing Trade Rules and the Apparel Sector Under the 1984 Caribbean Basin Initiative (CBI), countries in the region were relegated the tasks of garment assembly in exchange for duty-free access to the U.S. market. Experts have long noted that a more sustainable model for economic development would entail greater forward and especially backward linkages (Sklair 1989). By this metric, it could be good news that recent trade negotiations have allowed Central American countries to move beyond an enclave, assembly model, to greater vertical integration. One important regulatory opening for vertical integration came with the U.S. Caribbean Basin Trade Partnership Act (CBTPA) in 2000, which allowed for duty-free access for products made in the region using certain regional knit fabrics. The Central American–Dominican Republic Free Trade Agreement (CAFTA-DR) in 2005 deepened this process, and made the trade benefits permanent. Yet export dynamics from the region suggest curious trends. Despite the apparently more generous trade rules, the value of apparel exports—after a massive boom in the 1990s—largely stagnated in the early 2000s and then began to decline after 2005 (see figure 2.4).

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12,000

CBI

CBTPA

CAFTA

8,000 6,000 4,000 2,000 0 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Millions of dollars

10,000

Figure 2.4 Central America and DR apparel and textile exports to the United States Source: U.S. Department of Commerce, Office of Textiles and Apparel

How do we explain this apparent paradox? The problem for Central America was that with each piece of good news there were one or two countervailing developments. One year after CBTPA was enacted, the region was affected by the economic downturn following the September 11, 2001, terrorist attacks on the United States. Two months after the September attacks, WTO trade ministers voted to grant China entry into the trade organization and thus allowed it to more fully compete with Central America for U.S. market share. In 2005, the same year that the U.S. Congress approved CAFTA-DR, WTO rules ended preferential apparel export quotas for the region (the old Multi-Fiber Agreement, MFA). This further allowed China to expand its U.S. market share. Finally, by the end of the decade, Central American apparel exporters were struggling to stay afloat in the midst of the greatest economic recession in a generation. When the dust settles, we will have to see if El Salvador and Honduras will be winners or losers in the shifting fortunes of the global apparel industry. Right now, as we will see in the chapters ahead, apparel worker organizing in the 2000s has taken place in the midst of a profound economic crisis. But, assuming some economic recovery, the integration of the apparel industry may raise new opportunities for labor. This is because the increased investment costs of textile firms make capital less mobile and

Segmented Production, Frag mented Labor

37

thus less able to pack up and go elsewhere at the first sign of a unionization drive. At this writing, while there has been an increase in textile production and some vertical integration, most apparel production in Central America remains limited to cutting, making, and trimming apparel (Gereffi and Frederick 2010). That, as I have argued, creates especially strong incentives for employers to keep wages low and unions out.

Industrial Restructuring in the Automobile Sector Segmentation through Modular Production At first blush, no two industries could be more different than apparel and autos. The first is conducive to low-paid, nonunion, young female workers, while the latter is made up of high-paid, middle-age, unionized male workers. The first uses low levels of technology (a woman and a sewing machine) and the latter is a prima facie example of high-tech production, with robots almost magically assisting in the assembling of vehicles and their components. And the small apparel workshop is conducive to outsourcing, while auto production is conducive to a large, complex production system. Indeed, ever since Henry Ford built his auto plant in Dearborn, Michigan, auto production has always been considered a relatively centralized affair. So I thought. Then I visited Ford’s new assembly plant in Bahia, Brazil, and I realized how little I knew. The plant is very modern and high-tech. But use of advanced technology here also meant de-skilling. As I came to the final assembly line, I saw rows of workers sitting on stools and pushing buttons that helped to bring the final vehicle together. I looked more closely, and I noticed that many of the workers were women. Indeed, I learned that 50 percent of the assembly workers were female. When I asked about the wages, I was in for another surprise. The average worker received $158 per month. The Bahia case was a bit extreme. But it did suggest that certain employment relations practices in some auto plants were not that different from apparel, where, as we saw in Honduras, the workforce was 57 percent female and earned $127 per month. What happened to the auto sector in Latin America? Like the apparel sector, the auto industry went through a process of restructuring. The first

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radical transformation involved a push to lean production, with just-intime inventory, computer-driven technologies, teamwork, and incentive pay (Shaiken 1985; Womack, Jones, and Roos 1990). Auto producers began contracting out larger and larger parts of the production process to independent producers. Then, in the 1990s in South America, General Motors, DaimlerChrysler, Ford, and Volkswagen began taking outsourcing to a new level by having independent firms produce entire automobile components while locating these firms inside the assembly plants. The new system became known as modular production (Salerno 2001). Modular production breaks down vehicle production into autonomous subsystems, modules, which are developed and preassembled separately by independent firms located inside the final assembly facility (Frigant and Lung 2002). Modular production thus reduces the number of components that assembly workers need to handle while also providing greater proximity between auto companies and suppliers. Since final assembly has become much easier—especially given the introduction of robots—less skill and physical strength are required of the workforce. Partly as a result of these shifts, in the modular Ford plant in Bahia, Brazil, 50 percent of the production workers are low-paid young women. Modular production soon became the norm, at least in new plants in countries like Brazil and Argentina. In its most extreme form, as represented by the Volkswagen truck plant in Resende, Brazil, even final assembly is performed under contract by an independent firm. Yet most auto companies prefer a system in which modular producers are located inside the assembly plant and feed the final assembly line, which is operated directly by the auto manufacturer (see figure 2.5). Modular production can have adverse affects on labor for several reasons. First, it greatly reduces the number of autoworkers employed by a multinational auto firm since most workers contributing to auto production are employed by parts suppliers or by independent modular producers. This reduces labor’s collective strength. Second, wage negotiations take on a different dynamic. Since workers from different modular firms are now located under the same roof, wage discrepancies are a major concern because they might spur discontent. The problem for workers is that the supplier with the tightest cost structure will seek to keep wages down for the entire group. Ford’s human resource manager explains, “Sometimes, one supplier wants to do things

Segmented Production, Frag mented Labor

39

Body shop

Final assembly

Modular producers

Auto MNC

Figure 2.5 Auto industry: Model of modular production

differently—e.g. pay their workers more—but we lean on the supplier to stick to the common rule” (cited in Sako 2005, 22). Much like the apparel sector, this incentive to keep wages low also has an impact on unionization. However, union avoidance strategies in the auto sector often take on a more sophisticated character, as we will see below through case studies in Brazil and Argentina. Labor and Modular Auto Production in Brazil While the first automobile plants were installed in Brazil in the 1920s, the industry did not begin to grow significantly until the 1950s when then President Juscelino Kubitschek (1956–1961) united political and economic forces in the country around the concept of “national developmentalism.” Automobile

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production was envisioned as the pathway to modernity, and the government used every available policy instrument to pursue the expansion of the industry. The government banned imports of cars and only allowed foreign companies to produce locally if at least 90 percent of the vehicle’s parts were made domestically (Shapiro 1994). Exchange rate policies, subsidies, and tax exemptions further encouraged production. The military government of the 1960s and 1970s used its control over state institutions to deepen economic restructuring in favor of heavy industry (O’Donnell 1973). In the years that followed, the auto sector experienced its biggest growth spurt to date, expanding at a rate of 20 percent a year (Shapiro 1994, 122). Following the end of military rule in 1985 and especially in the 1990s, civilian presidents began a process of market-oriented reforms that led to the dramatic restructuring of the country’s automobile industry. The average tariff on imported autos dropped from 85 percent in 1990 to 34.3 percent in 1994, and it continued to drop throughout the 1990s (Comin 1998). As a result, the number of imported cars soared from 6,100 in 1990 to 420,000 in 1995 (SMABC 1996). Auto firms turned to outsourcing to reduce costs and increase competitiveness. Modular production became the preferred system of operation for American and German auto manufacturers. At a modular Volkswagen production facility in Resende, the company concentrates on design, engineering, and marketing. Elder Couto, a manager at the Volkswagen plant in Rio, put it to me bluntly during an interview: “Building the product is not our core competency. Core competency is about developing and selling the product” (Couto 2002). Not a single Volkswagen employee participates directly in production. Their task in the factory is to ensure quality control. The VW Resende plant represents an extreme example of modular production, but the overall trend is the same: shift the risks of production downward onto the suppliers and the workers. Werner Odenheimer, a representative of parts suppliers in Brazil, explained how the system at Ford affected him: “Ford tells you what product you will make, how you will make it, and how much they will pay you for it. . . . You are tied to the Ford product” (Odenheimer 2002). Odenheimer, who was visibly upset as he spoke to me about the system, also noted that parts suppliers are no longer free to set their wage rates. This was determined by a process of coordinated bargaining that was heavily influenced by the auto firm.

Segmented Production, Frag mented Labor

41

The Ford Motor Company’s decision to locate its most modern Brazilian facility in Bahia was largely the result of generous state investment incentives.19 Ford relies on twenty-seven modular producers who directly feed the assembly line.20 While 40 percent of the workforce was directly employed by Ford, the remaining 60 percent of the 3,297 employees inside the facility worked for suppliers. The model also spread the risks and the costs of production; while Ford invested $1.2 billion in the plant, its partners invested $700 million. In 2000, in the municipality of Gravataí (near the southern city of Porto Alegre), General Motors established one of its most modern facilities in the world.21 It cost $550 million to build, of which General Motors paid $375 million and its partners paid $175 million. General Motors also received a low-interest loan from the state government of Rio Grande do Sul. The government also paid for much of the supporting infrastructure, including roads between the plant and the port. Inside the plant, G.M.’s goal was to reduce costs through rationalization and a new relationship with suppliers.22 The location of many of these new plants in more isolated regions helps explain why, when the plants opened, unionization and wages were significantly lower than in industrial regions like those surrounding São Paulo and Buenos Aires. Yet this greenfield (new-site) argument becomes less persuasive ten or fifteen years later. Moreover, these were not entirely union-free territories. For example, in regions like Porto Alegre, the metalworkers were well organized before the modular plants moved in. Indeed, regional unionization rates were often equivalent too or even greater than the rates in Brazil’s industrial center surrounding São Paulo (Pichler 2009). A fuller explanation for wage and unionization trends—as for the apparel industry—must include the profound impact of the changes in the structure of production on labor. Over time, the system of modular production and management strategies that weakened worker identities functioned to keep labor costs low and unions weak. The system worked at least until unions could develop new and more effective strategies, as we will see later. Impact of Modular Production on Wages and Unionization in Brazil Unlike the apparel sector, where production structures are relatively homogenous, in the auto sector cost structures can vary greatly. However, since modular

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production brings all workers together under the same roof, unions and management most often agree to coordinated bargaining and one pay scale for production workers.23 This might sound like an advantage for labor, in that it increases labor’s collective power. But under such a system the firm with the highest labor costs will argue to bring down wages for everyone. I noticed this dynamic when visiting the VW Resende plant. At the plant, negotiations between the union and the employers take place with Volkswagen and five representatives of the “partner” companies. The union and the employers agree on a pay scale for all suppliers inside the plant. Yet labor cost is the biggest production cost for modular suppliers. For smaller producers, Elder Couto, VW Resende’s labor relations manager explained to me, labor costs can account for 70 per cent of operating costs (Couto 2002). As noted above, this creates a strong incentive for suppliers to push for as low a pay scale as possible. They may not get wages as low as they would like, and thus they will face increased pressure to become more efficient, or otherwise terminate the contract. But workers in modular facilities do earn less than workers in non-modular facilities. On average they earn $445.79 per month compared to $807.92 per month for workers in traditional production facilities (see table 2.1). The desire to keep costs low is linked to the goal of minimizing union influence. In some cases, the union-avoidance strategies of management can result in old-fashioned labor conflict. In the Ford plant in Bahia, management showed its preference for a more moderate union over a more militant union, despite the greater worker support enjoyed by the militant union. A strike resulted in which several workers were wounded by the police. In Gravataí, management at the General Motors plant also actively sought a more moderate union to represent the workforce despite the fact that the union only represented 2 percent of the workers (or perhaps because of this fact). On average, some 65.85 percent of workers in traditional auto plants are union members compared to 34.79 percent in modular plants (see table 2.1). Other slightly more subtle ways to weaken union strength revealed themselves to me one day after I finished a formal interview with management at Volkswagen. A manager invited me to have lunch with him in the facility. The food was wonderful and we dined on tables covered with white linens. “Are you enjoying your meal?” he asked soon after I started

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43

TABLE 2.1 Brazil: Wages and unionization in traditional and modular auto plants (2000–2002) Old traditional plants

Monthly wage (US$)

Fiat, Betim Ford, São Bernardo General Motors, São Caetano do Sul GM, São José dos Campos

Unionization rates

$522.00

31.84%

$600.00

86.69%

$1,219.00

40.00%

$816.00

71.21%

$1,010.00

66.21%

Volkswagen, São Bernardo

$732.45

86.00%

Volkswagen, Taubaté

$756.00

79.00%

Average

$807.92

65.85%

Daimler-Chrysler, Juiz de Fora

$548.00

not available

Ford, Bahia

$167.00

33.36%

General Motors, Porto Alegre

$505.00

2.00%

Mercedes Benz, São Bernardo

New modular plants

Renault/Nissan, Curitiba

not available

51.57%

Volkswagen, Resende

$565.93

44.00%

Volkswagen, São José dos Pinhais

$443.00

43.00%

Average

$445.79

34.79%

Sources: Author’s interviews (2002) and Salerno (2001)

eating. “Yes, very much,” I replied. “That’s too bad,” he noted, “because within a week this management dining facility will be closed. All employees will eat in the same place on orders from headquarters.” The local manager was not pleased with the change, but for managers at the VW headquarters in Germany, his dining preferences did not seem to be their main concern. Rather, they believed that by breaking down structures that separated managers and employees, a more cooperative employment relationship could develop. The endeavor might help productivity. It could also weaken workers’ identities. Teamwork, factory committees, and now common cafeteria spaces were strategies used to increase employee identification with the company. The “us” and “them” of employee identity that the firms wanted to create was Volkswagen versus General Motors, not workers versus employers. Auto corporations also increasingly implemented a range of lean production practices in these older firms, although they came short of

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introducing full modular production. In the union stronghold of the ABC region in Brazil, from 1994 to 2002, employment in the metalworkers’ sector declined from 148,700 to 90,000, and the number of unionized workers dropped from 81,500 to 45,100.24 Yet, as seen in table 2.1, the rate of unionization still remained significantly higher in traditional plants relative to modular plants. As modular production expanded, auto corporations first began to cut back production at traditional facilities. Yet, as we will see later, labor unions in these facilities successfully fought to defend their jobs, and afterward employment seemed to stabilize in all plants. What is noticeable about Brazil is how the boom in production was not matched by a boom in employment, particularly since 1992 (see figure 2.6). Yet, unlike industrialized countries, employment began to grow slightly from 2003 through 2008. And from 2008 to 2009, in the middle of the biggest global recession since the Great Depression, employment in the Brazilian auto sector only fell by 3.2 percent.25 Labor and Modular Auto Production in Argentina In 1916, soon after developing the moving assembly line, Henry Ford chose Argentina as the site of his third factory outside the United States.26 Eight years later, General Motors followed suit and began production in Argentina. When the world economy expanded in the aftermath of World War II, the Argentine auto industry, with assistance from the Argentine state, was in a good position to grow. In 1951, the government issued decrees to promote the sector and declared auto production “a national interest.” Factories were operating in Buenos Aires, Córdoba, and Rosario (Battistini 2000b, 82). President Arturo Frondizi (1958–1962) used tariffs and other mechanisms to increase the use of local materials in auto assembly plants. Between 1958 and 1965, the auto industry had an annual growth rate of 24 percent (Novick and Catalano 1999). When the military came to power in 1976, they began a process of trade liberalization (Palomino and González 1998, 8). The policy lowered the price of cars, yet it also caused a dramatic decline in local vehicle and auto parts production (Battistini 2000b, 96). Following democratization, and especially under the government of Carlos Menem (1989–1999), Argentina enacted a series of dramatic market liberalization policies. In March 1991, the government, auto industry

3,500,000

350,000

3,000,000

300,000

2,500,000

250,000

2,000,000

200,000

1,500,000

150,000

1,000,000

100,000

500,000

50,000 0

0

Production

Emploment

Figure 2.6 Brazil: Motor vehicle production and employment Source: Anfavea

executives, and labor unions signed the auto sector agreement through which the government agreed to lower taxes, auto parts companies agreed to reduce prices, and auto concessionaries agreed to lower sales prices. Labor unions, for their part, agreed to limit wage increases while auto manufacturers agreed not to dismiss workers (Novick and Catalano 1999). The government also established a one-to-one convertibility of the Argentine peso to the U.S. dollar. This dramatically reduced inflation and increased domestic purchasing power, which gave a strong boost to domestic sales. Then, in 1994, the Agreement of Ouro Preto between Argentina and Brazil integrated the two markets and further stimulated growth. In this context, General Motors, FIAT, and Renault returned to Argentina. Volkswagen and Ford dissolved their partnership, modernized existing plants, and built new plants,27 and Toyota and DaimlerChrysler started operations in the country (Battistini 2000). As a result, auto production soared from 99,639 in 1990 to 457,957 in 1998. The Asian financial crisis and especially the Argentine economic meltdown of 2001–2002 caused a

Number of workers employed

45

1962 1972 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Number of vehicles produced

Segmented Production, Frag mented Labor

46

Chapter 2

dramatic reversal of fortunes. Then the industry recovered with a vengeance, with an increase in vehicle production by 274.58 percent from 2002 to 2008. But, as in Brazil, automation and restructuring meant that the boom in production did not result in an equally dramatic boom in employment. Between 2002 and 2008, employment growth was 130.37 percent, a little less than half the rate of growth in production (see figure 2.7). Also like the Brazilian auto industry, the reactivation of the auto industry in Argentina in the 1990s included experiments with modular production. While in some cases, such as the Volkswagen plant near Buenos Aires, these experiments suffered reversals, in other cases, such as the General Motors plant in Rosario, the process advanced considerably. The implications of modular production were highlighted to me one day not just by my visit to a plant, but also by my discussion with the driver who took me back to the city after my visit. The driver had been a production worker in the plant for twenty years before restructuring had made his job redundant. With nostalgia in his voice, he commented: “At this factory, years ago we used to make cars, from start to finish. We had a large workshop to make many of the parts. All that is gone. Now, with a much smaller workforce, we just assemble components that are shipped in.”28 While in the 1980s it took up to seventeen workers to make one hundred vehicles per year, by the late 1990s, it took between five and six workers.29 In part, this change reflected productivity improvements. But it is also a reflection of restructuring in which a much larger portion of the final product is being made elsewhere. In 1995, when Volkswagen broke its partnership with Ford, it prepared to make cars by remodeling its old plant and by using modular production. The goal was to have as few parts as possible handled on the assembly line. Volkswagen workers would only build the chassis, the power train, and a few other components. Otherwise their functions would be limited to quality control and safety engineering. The main goal was to reduce costs by paying modular producers to make components at a lower price, which was partly achieved by paying lower wages than in the traditional auto plants. Yet Volkswagen’s plan did not develop as anticipated.30 The labor union, for historical and institutional reasons, was strong enough to ensure that all workers inside the plant received good benefits and high wages regardless of whether they worked directly for Volkswagen or for the suppliers. As

Segmented Production, Frag mented Labor

47

700,000

100,000 90,000

500,000

60,000

400,000

50,000 300,000

40,000 30,000

200,000

20,000 100,000 10,000 0

1962 1967 1972 1977 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Employment

70,000

Employment

0

Production

Figure 2.7 Argentina: Motor vehicle production and employment Source: ADEFA

a result, suppliers inside the plant demanded that Volkswagen pay them more than originally anticipated to compensate for the higher remunerations. Since modular producers were paying good union wages, modular production no longer served its purposes for VW. In 1999, Volkswagen decided to take over the activities done by the suppliers inside the plant, which ended its experiment in Buenos Aires with modular production. Outside of Buenos Aires, auto plants such as the General Motors plant in Rosario were able to implement modular production regimes.31 Here suppliers were not located inside the plant but rather next to it in a separate building. They were connected and coordinated with the main production process through a computerized system that allowed for model variations and custom orders so that each component was fed into the production line at the right moment and with the right specifications. General Motors built on its experiences in Córdoba, where the company had negotiated one of the most flexible labor relations contracts in the Argentine auto industry.32 In addition to variable pay, the G.M. plant in Rosario followed many of the Japanese lean manufacturing practices, including teamwork, multiple

Vehicles produced per year

600,000

80,000

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tasking, and just-in-time production. General Motors, like Volkswagen in Brazil, also worked to build a culture that blurred the distinction between workers and management. Everyone wore the same uniform, ate in the same cafeteria, and was subjected to the same practices, such as team-based variable pay. An Argentine auto industry lawyer was particularly bothered by the change in the dress code. “Can you imagine me, an Argentine lawyer, wearing khaki pants and a sports shirt to work?” he asked me rhetorically. “This is unthinkable. For us, our suit is everything.” Like the common cafeterias in Brazil, the dress code policy imposed by the auto MNC’s headquarters was mainly geared to production employees and designed to develop a common sense of identity in the workplace and firm loyalty. Other policies included contracting younger workers (on average twentyeight years old, compared to workers in traditional auto plants, who are on average forty-three) who tend to be more educated and have no prior union experience.33 Fiat, which built its new plant in Córdoba in 1996, quickly adapted aspects of a modular production system through which suppliers designed, built, and delivered major subassemblies (Camuffo 2002). To facilitate the new organization of production, Fiat insisted on having a very flexible labor contract as a condition for its presence in Argentina. In the mid1990s, Toyota also began production in Argentina. Yet unlike other modular systems in which suppliers were located inside the industrial complex, Toyota’s headquarters in Japan supplied the most complex components and product subsets (Novick et al. 2002). Yet Toyota did negotiate a contract that included multi-skilling, flexible contracts, and productivity pay. Toyota also hired very young workers (on average twenty years old), who had little previous work and union experience (Battistini 2001, 4). Impact of Modular Production on Wages and Unionization in Argentina Like in Brazil, modularization has had adverse effects on wages and unionization in Argentine auto plants. Yet, unlike Brazil, Argentine law allows for national unions. This has permitted the national autoworkers’ union, SMATA, to represent almost all autoworkers in the sector and to keep wage disparities down. And the relative strength of the dollar kept purchasing power high. Thus, at least prior to the economic crisis of the early

Segmented Production, Frag mented Labor

49

2000s, wages were higher, more stable, and less disparate than in Brazil, which did not dollarize or allow for national unions. Yet industrial restructuring created pressure for employers to control labor costs in Argentina. The General Motors contract of 1994 introduced variable pay via pay linked to team and plant performance. It also dramatically reduced the number of job categories and eliminated seniority pay (pay tied to years of service), which kept wages lower than at the traditional auto plants. Toyota implemented similar flexible pay schemes and kept wages even lower. Moreover, new hiring practices and management’s attempt to build a sense of worker identity with the company kept unionization rates lower. On average, monthly wages in traditional auto plants were $1,075.22 whereas in new facilities they were $785.00. Average unionization rates were 94.33 percent in traditional plants and 30.50 percent in new plants (see table 2.2). The Argentine and Brazilian cases point to the importance of modular production and other management strategies that accompanied industrial restructuring as a means to reduce labor costs and weaken independent forms of worker representation. These other practices include the use of teamwork, flexible pay schemes, and efforts to lessen the distinctions between management and production workers in order to build a sense of common identity with the corporate “family.” Keeping wages low and unions down thus involves more than using the structure of production to the detriment of labor. It also involves winning TABLE 2.2 Argentina: Wages and unionization in traditional and modular auto plants (2002) Old traditional plants

Monthly wage (US$)

Unionization rates

Ford, Pacheco

$1,009.67

95.00%

Volkswagen, Pacheco

$1,175.00

95.00%

Mercedes Benz, Virrey del Pino

$1,041.00

93.00%

Average

$1,075.22

94.33%

New plants General Motors, Rosario

$970.00

16.00%

Toyota, Zárate

$600.00

45.00%

Average

$785.00

30.50%

Source: Author’s interviews and surveys

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the battle for worker loyalty via a shared fate and identity with the corporation.

Conclusion In this chapter, I have mapped the impact of industrial restructuring on workers in two industries and in four countries. What this chapter illustrates is that industrial job growth through export processing zones and modular production—two forms of internationally segmented production—did not lead to higher wages and stronger collective representation. A compilation of the four cases indicates that on average, wages were 38.58 percent lower in segmented production regimes than in traditional production regimes. When comparing unionization rates in traditional and segmented production regimes, the differences are even more significant. On average, unionization rates were 61.25 percent lower in the latter. This union decline occurred at a time when the region was emerging from decades of authoritarian rule, at a time when political conditions were more conducive to unionization since workers attempting to form unions did not routinely have to fear for their lives. And this decline occurred within the formal, industrial sector of the economy, which in many parts of the world had been a stronghold of unions. The apparent paradox of union decline in the midst of democratization and industrial job growth can be explained by the international segmentation of production. Outsourcing increased the labor costs of producers while also forcing them to compete for a limited number of contracts with MNCs. This induced firms to keep wages low and to avoid or weaken labor unions. At the same time, the decentralization of production limited labor’s capacity to disrupt the production process, fragmented labor solidarity, and reduced labor’s ability to pressure for better wages and stronger unions. In the auto sector, managerial practices such as teamwork, centralized dining facilities, and common uniforms further weakened workers’ collective identities and mitigated unionization. Yet, while in all countries unionization rates and wages were lower in segmented regimes, there were marked variations in the level and degree of decline. National levels of economic development, industry differences, institutions, and historical dynamics largely account for these

Segmented Production, Frag mented Labor

51

variations. Brazil and Argentina were more economically developed than El Salvador and Honduras when restructuring began. Also, while both sectors became more decentralized, the auto industry still remained far more centralized, with much greater investment costs than the apparel industry. This contributed to the higher rate of unionization and wages in South America relative to Central America. In El Salvador, twelve years of civil war (1981–1992) and twenty years of extremely conservative party rule (1989–2009) in part explains why that country had the lowest rate of unionization in the group. The question that I have reserved for the next four chapters is this: How has labor responded to the challenges presented by industrial segmentation? As we will see, segmentation was a threat for labor, but it also provided labor with new opportunities and the impetus to create new forms of labor solidarity.

3

Transnational Activist Campaigns and the Anti-Sweatshop Movement in El Salvador and Honduras

“What is the first thing to look for before launching an organizing campaign?” an American activist asks the group of Central American apparel unionists. Everyone knows the answer. “The label sewn inside the clothing,” they respond in unison. “And why is this important?” she prods. A Honduran unionist replies: “Because it provides the information on the multinational corporations that provide contracts to our workplaces.” “Yes,” the activist exclaims, “and this information will give us the information we need to pressure the global retailers in the United States while you organize their suppliers in Central America.”

As I listened to the above exchange at a workshop, I realized how different international labor solidarity had become in under a decade. The main focus was no longer on getting a unionist out of prison or protesting an assassination. It was proactive. It entailed understanding the structure of global supply chains, and it involved new forms of information sharing and coordination. Left-oriented labor activists in Central America began working with U.S., Canadian, and European labor activists to leverage multinational firms into improving conditions at local apparel export factories. They did this by framing the problems faced by garment workers in ways that resonated with broad values to shame apparel corporations into improving the conditions in the factories making their products. When possible, the activists also targeted the state to demand better laws and more effective enforcement. These local and transnational labor activists and NGOs had developed, in effect, transnational activist campaigns (TACs).

Transnational Activism in El Salvador and Honduras

53

The campaigns had their complications. Male-dominated union movements at times clashed with women’s groups that brought a gender perspective to organizing. Tensions sometimes emerged between local activists who sought to maintain control over the campaigns and international activists, whose access to transnational targets often gave them greater strategic influence. TACs were also highly dynamic. They did not emerge mechanically out of the globalization of production and inadequate state institutions, but rather were the result of trial, error, and reflection. Many local campaigns would fail many times before the first attempts at transnationalism emerged, and each subsequent campaign built on previous experiences while also incorporating something new. Most notably, in the midst of internal tensions and external successes and failures, a new form of local and transnational solidarity evolved. It would not only affect the well-being of apparel workers, but would also contribute to modifications in the structures of production and the state.

Left Unions and the Limits of Traditional Strategies The end of the Cold War reduced the level of political polarization among labor unions in El Salvador and even caused a few groups to experience rather dramatic political transformations. Yet most of the labor movement remained divided in two camps. There was a group of traditional conservative union organizations, some of which were founded with the blessing of military dictatorships, who maintained relations with the business sector and the right-wing ARENA party. (I will explore these unions in the next chapter.) On the left, there was a group of unions that spoke of class struggle and were sympathetic to, if not in alliance with, the leftist Farabundo Martí National Liberation Front (FMLN). Two of the more active postwar left labor groups in the apparel export sector have been the Trade Union Confederation of Salvadoran Workers (CSTS) and Federation of Independent Associations and Unions of El Salvador (FEASIES). Honduras has experienced less union fragmentation than El Salvador. For many decades, the union movement was neatly grouped along the lines of the three main international union tendencies, social democratic, social Christian, and communist. Affiliated with the latter was the Unitary Federation of Honduran Workers (FUTH), which declared its belief in class struggle and its opposition to U.S. military intervention in the region

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in the 1980s. In the 1990s, the FUTH was joined by a moderate-left group of unionists who had split from a conservative labor center to form the Independent Federation of Honduran Workers (FITH). FITH and FUTH then joined forces to establish the United Confederation of Honduran Workers (CUTH). In general, these left-oriented groups had a certain internationalist perspective that was built out of their class identity. But this did not mean they would automatically work with any international labor unions that appeared to have the correct political credentials. Years of U.S. military and union intervention during the Cold War made left activists particularly sensitive to foreigners who promised to solve their problems. Indeed, for the left in small countries so historically dominated by a large powerful neighborhood, anti-interventionism was part of its discourse and identity. As a result, for the Central American left, international alliances with activists in the North would be far from automatic. Trust would have to be gained and maintained. For these reasons, it is perhaps not surprising that when apparel export production first boomed in Central America in the early 1990s, left-oriented unions in El Salvador and Honduras turned to domestic strategies. They attempted to organize workers into labor unions by using the same practices that they had used in the past. Unionists had to gather the needed thirty to thirty-five workers, elect a leadership, and present the necessary documentation to the Ministry of Labor in order to gain legal recognition of a union. For additional pressure or to respond to a government’s rejection of a union application, unionists would resort to strikes, slowdowns, or other protest events such as blocking the entrance to an export processing zone. This traditional union strategy had never been a guarantee for success, but in the new competitive system of global apparel production it was a frequent failure. Once the documentation to form a union was submitted, workers who signed the documents could not legally be fired. However, this law was often violated. Either the Ministry of Labor would find some reason to reject the documentation, or it looked the other way when employers dismissed the workers who had formed the union. Another common employer strategy, which was within the law, was to pay the union leaders’ salaries, but deny them entrance to the factory. This prevented their access to the workforce, and often led to union decline.

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One study revealed that in El Salvador, eleven of seventeen attempts to form labor unions in export processing zones in 1993 and 1994 failed, and that success was only temporary in the remaining six cases (Arévalo and Arriola 1996, 138–39). From June 1995 to June 1996, there was a wave of organizing drives in the Salvadoran EPZ sector that resulted in two plants closing and a total of 5,044 dismissals (García 1996, 35–37). Striking at one supplier in a geographically dispersed supply chain proved ineffective. For corporations like Gap and Liz Claiborne, these strikes were no more than a minor inconvenience that might require a few phone calls as they moved production from one supplier to another. As strikes lost their punch, their frequency declined by 50 percent from the 1990s into the first decade of the twenty-first century. Salvadoran unionists would have to reevaluate their traditional strategy of strikes and demonstrations to pressure the government and employers to accept unionization. In Honduras, traditional strikes also proved somewhat ineffective. Even when production was not moved and factories did not close, striking workers could easily be dismissed and replaced. What unionists did as a result was stay in the factory and stop working, while standing in front of their work stations in a huelga de los brazos caídos (fallen-arms strike). Between June 1992 and August 1994, there were twenty-two protest events linked to the EPZ sector in Honduras, including thirteen strikes, six plant takeovers, two protests in front of factories, and one street demonstration (Moncada and Cordero 1996, 246). The most common causes of the protest events were abusive treatment by management and management’s refusal to recognize a union. The legacy of having somewhat more lenient labor laws and the absence of civil war contributed to the more vibrant protest activity in Honduran EPZs relative to El Salvador. One additional reason for the increased activity was that the EPZs in Honduras were set up in the northern region around San Pedro Sula where there was a long history of labor unionism. Investors went to the region—as opposed to Tegucigalpa, the country’s political capital—because of its superior infrastructure, including wide roads, good seaport, and modern airport built to support the banana export business. Newly arrived apparel producers seemed unaware that the banana sector, following a massive strike in 1954, was the cradle of unionism in Honduras. The parents of many of the young EPZ workers were employed on the unionized banana plantations. EPZ workers had often developed an

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awareness of labor unionism while they were still children. In one of my first interviews with a Honduran EPZ worker, I asked how she had become interested in labor unions. She responded that her father was a union member on a banana plantation. As if on cue, the father came into the room and smiled broadly as he recited a union slogan for my benefit as a foreign visitor. There was a union culture and identity that was palpable in the region, and this contributed to unionization efforts. The strike strategy and union culture helped left unionists organize three unions with 950 members in the EPZ sector in the mid-1990s. This is better than El Salvador, but it still only represented a small fraction of the workforce. Thus, here too union strategies would have to change if they were to be more effective.

Transforming Domestic Strategies The issue of transforming labor strategies in the face of dramatic industrial restructuring began with modifying local tactics. The problem in forming a union was not just meeting a legal requirement. Rather, it entailed having the collective power to take on an employer to defend the union and improve conditions. Most factories in EPZs had over five hundred workers. Instead of organizing thirty to thirty-five workers into the union before publicly presenting a petition to the Ministry of Labor, the new goal was to achieve support for the union from at least 50 percent of the workforce. If the employer attempted to dismiss the union leaders, there would be enough union members in the factory to organize a powerful protest and demand that management rehire them. Developing effective domestic alliances was an equally important yet tricky component of labor’s new strategy. For example, when attempting to organize the largely female EPZ sector, it quickly became clear that the male-dominated union movement lacked a gender perspective. Even union meeting times had gendered implications. For example, one male union leader lamented to me that the women workers were not disciplined because they preferred to go straight home after work rather than participate in the Wednesday evening union meeting. It did not occur to him that perhaps the women went straight home because long work hours, household obligations, and controlling husbands who wanted their dinner

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did not permit them to participate in an evening meeting. When unions started their campaigns, their demands often did not include issues that affected women, such as the right to maternity leave and day-care centers, and an end to sexual harassment at work.1 Flare-ups between women’s groups and unions were common, with women’s groups accusing the male-dominated union movement of failing to address the particular circumstances of women. The answer for women’s groups was often training and the formation of women’s committees, not unionization. The unionists responded that the women’s groups did not understand union organizing and collective bargaining; if unionists were getting harassed in the workplace even with the legal protections provided by the labor code, forming women’s committees could put workers at even greater risk since committee members were not protected by the labor laws. At times alliances and funding from international women’s groups and labor unions served to stir up differences and redivide the movement. Despite these differences, these groups often worked together, partly because there was a legacy of common struggle against authoritarian rule during the civil war. This experience was something the northern activists lacked. Repressive regimes provided a common enemy in opposition to which labor, student, peasant, community, human rights, and women’s groups could join together in the formation of coordinating bodies and umbrella organizations. Indeed, all these “popular” organizations had considered the military-backed regimes far too powerful an opponent to confront alone. This legacy helped mitigate some of their differences and allowed for periods of collaboration among domestic labor, NGOs, and women’s groups. One successful, albeit short-lived, domestic social alliance to address the challenges of EPZs took place in the late 1990s when a panoply of left-oriented activists from labor unions, women’s groups, faith-based organizations, and human rights institutes gathered together to form the Coordinating Body for Dignity in the Maquila (COSDEMA). For the next few years, they coordinated their activities to target local employers, the state, and multinational corporations.2 Honduran activists, while experiencing the same legacy of full-scale civil war, were certainly familiar with a repressive state and the need for broad social alliances. This experience assisted them as they began visualizing

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what a new labor strategy should look like. Labor activists Ayax Irías and Héctor Hernández reflected on that strategy: The nature of the [EPZ sector] suggests the need to establish a nontraditional model of unionism. More than 80 percent of the workers are women and an even larger percentage are young workers. As a result, it is necessary to have a union strategy that includes the specific demands of women and a proposal that responds to and adapts union actions to the desires and needs of young workers. It is vital to have a policy of alliances that broadens the influence of maquila [EPZ] unions with fraternal sectors such as the informal sector, community organizations, human rights groups, women’s organizations, segments of the Church, consumer networks in northern countries, international labor unions, etc. (Irías Coello and Hernández Fuentes 1999, 17–18)

Irías and Hernández focused on both the economic structure and the demographics of the sector when they proposed their strategic vision. The large female workforce meant that demands had to reflect the needs of women. But the two activists also looked at the age make-up of the workforce, a demographic characteristic that is often overlooked in union strategies and academic studies. Human rights and church groups would provide additional experience and legitimacy to the campaigns. After emphasizing the importance of new domestic strategies and alliances, Irías and Hernández add the need for international activism. Indeed, they observe: “International solidarity is an indispensable response to the transnational globalization of capital” (Irías Coello and Hernández Fuentes 1999, 27). Thus, the first response to international segmentation was to broaden domestic alliance and alter domestic strategies. Transnationalism is a complement to domestic strategies. It does not supplant it. In El Salvador, COSDEMA arrived at a similar conclusion, as did one union leader from a Salvadoran EPZ factory, who emphasized the need to combine union and NGO pressure and to integrate national and international strategies. This activist also added the importance of political “conjunctures” or opportunities, noting in particular that the period under which the country was under review by the U.S. government for labor rights violations created an opportunity in which to form unions.3 But who would be labor’s new international allies? And how would they work together?

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International Anti-Sweatshop Activism The National Labor Committee (NLC) was one of the first and most visible anti-sweatshop NGOs. It was formed in 1980 by a group of New York union activists who demanded the release of imprisoned Salvadoran unionists and conditionality of U.S. aid to the Salvadoran government based on respect for fundamental human and labor rights. When El Salvador’s civil war ended, the NLC focused its campaigns on behalf of workers in El Salvador’s mushrooming export processing zones. It organized speaking tours of very young women workers who provided moving testimony of their experiences, and it combined these speaking tours with letter-writing campaigns (addressing company executives) and protest activities outside retail stores in the United States. Other NGOs pursued similar campaigns. The San Francisco-based group Global Exchange exposed the sweatshop practices of Nike in Vietnam, organized campaigns against Gap, and helped to sponsor a lawsuit for labor rights violations by U.S. apparel companies in Saipan. The U.S. Guatemala Labor Education Project, with a full-time staff person in Guatemala City, documented labor rights violations committed by a U.S. apparel company, Phillips Van Heusen, in Guatemala, and then pursued campaigns throughout Latin America after reorganizing itself as the U.S. Labor Education and Action Project (USLEAP). In Canada, the Maquila Solidarity Network (MSN) began pursuing corporate campaigns and policy advocacy around sweatshop issues in the early 1990s. In Europe, the Clean Clothes Campaign (CCC) brought together labor unions and NGOs to focus on improving working conditions in the global apparel industry and empowering workers. U.S. apparel workers’ unions were also active in supporting international garment workers, but this had not always been the case. Prior to the 1990s, U.S. unions in the apparel sector were often protectionist, demanding that Congress impose high tariffs on apparel imports and organizing “buy American” campaigns (Frank 1999, 132). Then, in the 1990s, the Clinton administration—and with it, many of labor’s allies in the Democratic Party—shunned labor’s protectionist agenda and supported free trade agreements like NAFTA. Apparel imports as a share of total sales rose from 14 percent in 1980 to 78 percent in 1999, and employment in the sector dropped by half, from over one million to 506,000.

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U.S. apparel unionists responded to this new situation by restructuring their organizations, and they began cross-border organizing efforts. According to UNITE’s chief economist, the unions’ massive membership decline gave them little choice but to join forces while also pursuing transnational alliances (Levinson 1998). UNITE turned its attention to Central America and the Dominican Republic, where it sent organizers. Part of its resources was channeled through the International Textile, Garment and Leather Workers’ Federation (ITGLWF), which also supported garment workers in the region.4 By the late 1990s, as the anti-globalization movement gained international attention, university students in the United States began to question the working conditions in factories producing university apparel. In July 1998, student representatives from thirty universities came together in New York City to launch United Students Against Sweatshops (USAS), which grew into a coordinating body of 180 student anti-sweatshop groups (Featherstone and USAS 2002). The students demanded—often using sitins and other protest activities—that university administrations do more to ensure that factories producing clothing bearing the names of schools apply strict worker-rights standards to avoid sweatshop practices.

The Power of Norms and Protest The activist organizations described above came to realize that the Achilles heel of the global apparel industry was the brand-name image of the clothing manufacturers. Not only does a tarnished image affect sales, but also, unlike production facilities, retail stores cannot pack up and move elsewhere in the face of protest (Bonacich and Appelbaum 2000). Perhaps the best illustration of the shaming mechanism at work took place in front of a national television audience when Dateline interviewed David Glass, then Wal-Mart CEO, about accusations of children making Wal-Mart clothes in Bangladesh. Local human rights groups informed Dateline of the abuses and accompanied them inside factories where they filmed and interviewed children making the clothing. Glass at first responded defiantly, stating Wal-Mart found no evidence of children in the factories. But the Dateline reporter pushed further: “Should a twelve-year-old girl be in school or making clothing for Wal-Mart, anywhere in the world?” It was a clear and direct

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question based on norms, not local or international law. The CEO responded without hesitating: “A twelve-year-old girl should not [be making clothing for Wal-Mart].” There was nothing else to say. No need to consult lawyers. No need for a workers’ strike to make the point. He had been effectively backed into a normative corner. Yet normative power was not the only source of power available to the activists, and groups that relied only on the shaming mechanism might get needed international media attention but achieve very little in terms of union strength. Rather, through TACs, the shaming mechanism was a complement to cross-border organizing that was rooted in strong relationships with local Central American activists. In the most successful TACs, activists saw shaming corporations not as a goal in and of itself, but rather as one instrument among several that were used to empower local workers. Strikes, slowdowns, protest marches, EPZ takeovers, and political pressure were all part of the activists’ repertoire.

Transnational Activist Campaigns in El Salvador Mandarin in the 1990s The Mandarin factory, which produced apparel for Gap, entailed the most significant labor conflict in the Salvadoran EPZ sector in the 1990s. It was the closest attempt of the decade to achieve a collective contract agreement. It was the largest transnational campaign at the time in the country. And, for better or worse, it is credited with being the first attempt at independent monitoring in the global apparel industry. I had the opportunity to work with the union in this case. This gave me the opportunity to have countless discussions with the activists. It also gave me access to the factory, management, the owner, and the workforce. Much of this section is thus written from a participant-observer perspective. Forced overtime, lack of adequate drinking water, and high individual production quotas motivated workers to attempt to organize a union several times. In each case the Taiwanese owner and his management team acted quickly. All workers it could identify with the union were fired. Labor responded with increasingly aggressive protests. Mandarin hired an ex-military officer to deal with its labor relations issues. Protesters began to

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carry clubs at protest events, and on at least one occasion locked the gate of the factory to prevent the movement of products and materials. Then one of the union leaders received death threats. None of those events provoked Gap to respond. The response came when the National Labor Committee adopted the Mandarin case as a campaign and bombarded the media and Gap with news of the labor rights abuses in the factory. If there was one skill the NLC possessed, it was its ability to frame issues to maximize media attention in ways that would shame the company into acting. In the case of Gap, the NLC had played on the back-to-school season and the fact that Central America was one place that old U.S. school buses go to die; they were the main means of mass transportation in the country and they took the young women to work. The framing suggested that many of those workers should have been riding old school buses to school, not riding them to factories to make Gap’s back-to-school clothing. At the time of the Mandarin conflict, the workers were in the midst of their third unionization attempt. What made this organizing drive so significant was that activists organized 350 workers out of a workforce of 850. When close to 50 percent of the workforce joined the union—the legal threshold to force a company to negotiate a collective contract— the union stood on the threshold of making Mandarin the first factory in a Salvadoran export processing zone with a collective bargaining agreement (Villatoro 1995). A cycle of dismissals, protests, and repression ensued. By June of 1995, management had fired all 350 unionists and the union leadership was denied entry into the factory.5 The unionists then turned to the Ministry of Labor to use its leverage to ensure the rehiring of those workers, but the ministry refused to act. This is when the NLC and the local unionists joined forces. But how did that initial contact take place? Many models of transnational activism don’t explain that crucial initial link. Often it is assumed that local workers, when blocked domestically from resolving their issues, seek out transnational allies. But for a small union with no international affiliation or experience, this is an unlikely scenario. As I found when living in the region, many of these new industrial workers did not even know where the local Ministry of Labor office was located, let alone how to contact a New York-based labor rights group. In the case of Mandarin, what happened is that the NLC was visiting the country to discuss the sweatshop problem with local human rights

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and labor groups. It asked what the biggest labor conflicts were at the time in the country. Everyone mentioned the case of Mandarin. So the NLC tracked down the Mandarin workers. Once the NLC made contact with the workers, it documented their stories and the abuses at the factory. It then asked the workers to sneak out the labels that they were sewing on the clothing. In this way, the NLC learned that Mandarin produced for Gap. The NLC believed that Gap’s desire to protect its public image would provide a useful lever to pressure the company into assuming responsibility for the problems at the factory (Krupat 1997). This is also an important part of the story: it was the decision of the international solidarity group to decide which brand-name corporation to target. Local activists had to trust their judgment. A lot has been written about what happened next in the Mandarin case (Anner 1998b; Anner 2000; Armbruster-Sandoval 2005; Esbenshade 2004). The NLC organized speaking tours of dismissed workers. North American human rights organizations, religious groups, and school children became involved in the campaign. In El Salvador, the civil society coalition COSDEMA spoke out against the labor rights violations taking place at the factory and organized the writing of a letter signed by prominent Salvadorans that encouraged Gap rectify the situation (Anner 1998a). On December 15, 1995, Gap signed an agreement with the NLC in which it agreed to compel the local factory owner to rehire all the union members and allow local labor and human rights activists to monitor the agreement. In order to ensure compliance with this agreement, Gap’s corporate code of conduct, and the local labor law, Gap also agreed to allow independent monitoring of the facility by local human rights, religious, and labor organizations. It was a significant and unprecedented step forward. However, there was one problem with the agreement: no one in El Salvador—neither the factory owner nor the labor union—was party to it. Indeed, the Mandarin owner was outright hostile to the arrangement, and union leaders began receiving death threats. One union leader received eleven death threats by phone. This man was particularly valuable to the union. He was a machine repairer and had the opportunity to convince many workers to join the union as he moved about the factory repairing sewing machines. It took three months of meetings in El Salvador before the unionists, factory owners, and domestic labor rights activists signed a local resolution that allowed for the rehiring of the dismissed unionists and monitoring of

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the facility. By October 1996, the union leaders were back at their jobs.6 In early 1997, all dismissed workers were offered the opportunity to return to work.7 The union and its allies got the owner to end forced overtime, women no longer had to ask permission to go to the bathroom, adequate drinking water was made available, and the personnel administrator was removed from his post. In a poll conducted in October 1997, over 88 percent of the workforce rated their treatment by their supervisors and the management as good or very good (GMIES 1997). Yet, while the union was legally recognized and its leaders were working inside the factory again, membership remained low and could not negotiate a collective contract.8 Wages did not increase faster than the industry average, and individual worker productivity goals remained high. This less-than-optimal outcome appears to be attributable to the fact that local organizing at this factory was relatively weak even though the transnational campaign was strong. In 1995 many workers had joined the union quickly, in the heat of the conflict. Later, when exunion rank-and-file members returned to work, many decided not to rejoin the union out of fear that they might lose their jobs again. One of the ironies is that it is perhaps because the union did not increase wages substantially that the factory remained open. All the major campaigns in the region at the time that resulted in higher wages also resulted in closed factories (Armbruster-Sandoval 2005). Mandarin represents one of the few cases in the region where dismissed union activists returned to their jobs, where conditions improved, and where the union was able to maintain itself. Mandarin later changed its name to Charter, and the union reestablished itself as STECHAR. It formally affiliated with the left-oriented labor federation, FEASIES. In 2009, with the profound global recession, Charter was forced to close and the union was disbanded. It had survived as a unionized plant for fourteen years, a remarkable achievement in such a volatile industry in a country with such an antiunion atmosphere.

Tainan and Just Garments, the Early 2000s If Mandarin was the case of the 1990s, the case of the next decade involved Tainan and Just Garments. The left-oriented FEASIES and the CSTS would be the protagonists in this case. The campaign would involve a

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Taiwanese firm, Tainan Enterprises, valued at $17.65 million, that had factories in China, Cambodia, Indonesia, and Taiwan (Quan 2007). In 2000, it expanded its reach to Latin America when it opened two factories in El Salvador. In June 2001, the textile industry union in FEASIES, STIT, successfully organized a union in one of these factories. It did so building on a union strategy used in the United States: it made lots of visits to workers in their homes to convince them to join the union. Within a year, when they had achieved membership of approximately 56 percent of the workforce, they were legally able to demand that the firm begin collective contract negotiations. But the firm had other ideas. When the union filed to negotiate a collective contract in April 2002, management announced that it was closing the facility. Workers were offered severance pay but with union support they decided not to accept the money. What they wanted were their jobs back. They demanded that Tainan reopen the factory and respect the union and the collective bargaining agreement. There was something radical about this group of workers, and it was not just because they were members of a left-oriented labor federation. The attitudes and ideas of these workers were shaped by a previous experience with the less-than-scrupulous labor federation FENASTRAS, which had earlier organized workers in Tainan.9 In the case of FENASTRAS, the goal of unionizing some workers appeared to have more to do with negotiating a generous settlement with Tainan (of which the FENASTRAS leadership would keep a significant share), than in actually working toward a long-term solution via unionization and collective bargaining that would benefit the entire workforce. Indeed, at one point, when negotiations between the left union and Tainan appeared to reach an impasse, the left union leaders suggested that perhaps the best solution would be to just negotiate a good severance pay package for everyone. The workers yelled back in disapproval. They wanted to fight to keep their jobs, and the union accepted their decision.10 As with the Mandarin case, it became clear that local activism would not be enough. Also, as in the Mandarin case, Gap was one of the corporations that had production in the factory. Otherwise there was a different set of international alliances, which gave the campaign a different focus and extended the reach into new contours of the apparel global value chain. Activists in the Tainan case decided that they would target not only

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the retailer (Gap), but also the headquarters of Tainan in Taiwan. The supplier, they quickly realized, was not just some small, insignificant player in a pyramid of power with the brand-name apparel firms and giant retailers at the top. Rather, in this case, the supplier (Tainan) was a major, multimillion-dollar, multinational enterprise. To target Tainan, alliances with northern activists would not suffice; the TAC would have to include Asia-based activists. With the help of the Salvadoran Center for Labor Action (CEAL) and the American Center for International Labor Solidarity of the AFL-CIO (ACILS), the unionists developed ties with Focus on Globalization (FOG), a research and activist group based in Taiwan that was established in 2002.11 FOG researched the conduct of the company, pressured the company to respond to the union demands in El Salvador, and eventually played a mediating role between Tainan’s managers and the Salvadoran unionists (Quan 2007). ACILS also helped the Salvadoran unionists connect with unionists who had organized Tainan workers in their Indonesian factories. These unionists supported the Salvadorans by writing protest letters and even demonstrating outside the Tainan plants in Indonesia (Quan 2007). In the United States, UNITE and USLEAP put pressure on Gap and other retailers that had production in Tainan. From July 8 to July 12, 2002, there were major negotiations in El Salvador with the participation of Neil Kearney, leader of the ITGLWF. Kearney arrived with an advisor from Taiwan who had an abundance of facts on the Tainan enterprise. Negotiations, which included the sister of the owner, lasted for thirty-six hours. One Salvadoran observer later commented to me, “That Neil Kearney is one hard-ass negotiator. He has all his facts straight, and he doesn’t give them any room to wiggle out of a deal.”12 As I had learned earlier when dealing with Gap and Mandarin, negotiating what might seem like a straightforward demand—the rehiring of fired unionists—eventually reveals the many complexities and layers of power in global supply chains. Questions of production orders, level of volume, and duration of contracts all become relevant. Despite the marathon negotiation sessions, the dynamic local organizing, and the impressive TAC that targeted not only the brand-name retailers but also the powerful Asian supplier in its home country, Tainan never reopened. Then activists took a gamble on an innovative solution. They negotiated with the factory owners and Gap an agreement that would

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allow them to open a new factory in 2003, Just Garments, which would be unionized, have a collective contract, and be co-administered by the union. The daily operations of the factory largely fell on the shoulders of Gilberto Garcia, previously a key organizer in the campaign to unionize Tainan. Activists put Just Garments in the category of factory takeovers such as those depicted in The Take, the documentary by Naomi Klein and Avi Lewis on the movement in Argentina. To help build worker identification with this larger movement, Just Garments arranged to show the movie inside the factory to the entire workforce. Anti-sweatshop activists celebrated the achievement of this worker-run factory, and groups like No Sweat Apparel began promoting and selling clothing made by Just Garments. Yet the experience would prove shortlived. When I visited the factory in 2005, less than seventy-five workers were employed, and the factory was in extreme financial crisis. The experience generated yet more debate inside the anti-sweatshop movement. How much of a victory was this? Should influential activists be spending their time running factories or organizing new unions? In 2007, economic realities settled the debate. Due to lack of production orders and managerial issues, Just Garments was forced to close its doors. Despite this considerable setback, TACs continued in the sector. For example, unionists from CSTS joined with an array of international organizations to demand that Adidas and Nike ensure payment of benefits for workers of Hermosa Manufacturing. And with support from the American Center for International Labor Solidarity, a CSTS union sought unionization rights for workers in Buena Aventura factory. One CSTS member federation, led by Alejandro Ramos, organized protest events that shut down the San Marcos EPZ to demand respect for labor rights.13

Transnational Activist Campaigns in Honduras During the 1980s, U.S. NGO activism was less prevalent in Honduras than in El Salvador, in part because Honduras did not descend into a violent civil war and receive the same international attention. The U.S. union presence in the country was largely limited to the official activities of the AFL-CIO, which, driven by Cold War politics, had spent millions of dollars to build a moderate union movement in the country. By the 1990s,

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this began to change. Honduras caught the attention of progressive activists in the United States as the size of the EPZ sector grew exponentially. The National Labor Committee had a long history of working in El Salvador, not Honduras, but because more apparel production was exported to the United States from Honduras than El Salvador, the NLC began campaigns in Honduras. The U.S. textile union UNITE soon followed suit with its own model of transnational activism.

U.S. Unionists and the Fishbowl Model The participation of U.S. labor unionists in TACs added a different approach to the activism. These unionists, most from UNITE, criticized the Central American unionists for not carefully identifying corporate targets before beginning campaigns. The latter also often formed unions when the organizers had the legal minimum number of workers to form a union (often between thirty and thirty-five workers), yet this did not give the workers much associational power to respond to a backlash from management. UNITE trained Central American unionists to use its “fishbowl” model of organizing. The model encouraged slow, clandestine (“underwater”) organizing to build a broad base of support before going public (“breaking the water’s surface”) in order to be best prepared for the anticipated management response. The model first entailed identification of factories to target based on the perceived vulnerability of the brand-name corporation for which they produced. This job was left to the U.S. activists since they had the best access to information on the conduct of these U.S. MNCs. Once a factory was chosen, the second aspect of the model included the recruitment and careful training of a cadre of workers in the factory who would become the main organizers. These workers would become the campaign’s leaders and thus its public face. They were also the most vulnerable and had to be prepared for a range of possible countermeasures by management. A larger group of workers was more rapidly recruited by visiting them at night in their homes to convince them to join the union. These home visits were a relatively standard practice for some unions in the United States at the time, but they were an entirely new practice for the Central American unionists. Finally, when the union was deemed sufficiently

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strong, it presented its documentation for its legalization to the Ministry of Labor, often accompanied by in-plant demonstrations of support and transnational protests directed at the brand-name company producing in the plant. These strategies provided the basis for a series of factory-focused TACs. UNITE pursued its fishbowl strategy at a Korean-owned EPZ factory, Kimi, which operated in Continental Industrial Park in the northern city of La Lima, Cortés. There was a history of attempting to form unions in this factory before UNITE arrived. In 1993, harsh factory conditions— including physical abuse, high production goals, and low pay—motivated workers to meet after work to discuss how to force management to improve conditions. Several workers had family members who were active in the banana worker unions, and this gave them the idea to form a union. One seventeen-year-old worker explained, “I didn’t really know what a union was, so I asked my father. He had worked for the Tela [banana company]. He told me that a union was a good thing, and that I should go and see what I could do” (Bonilla 1998). The union started expanding, but before union activists could legalize it, management learned of their intentions and dismissed all of the leaders. In 1995, a representative of UNITE contacted the activists and discussed plans to pursue another attempt to form a union. UNITE was interested in Kimi because the factory produced clothing for Gap, and Gap seemed to be a vulnerable company based on its response to transnational campaigns such as the one involving Mandarin in El Salvador. With UNITE’s guidance, the union implemented the fishbowl model. They classified workers according to their perceived level of support (pro-union, middle of the road, or anti-union), and then they aggressively targeted the undecided segment of the workforce through house visits during which organizers informed workers of the benefits and importance of joining a union. The tactic paid off: a critical mass of workers joined the union. The unionists believed that to ensure recognition of the union by management they needed to provide the company with a show of force. Thus, on the day that they presented the documents to legalize the union, four hundred Kimi workers protested outside the factory to demand that the company recognize the union (Armbruster-Sandoval 2003, 561). However, the company did not recognize the union; instead it dismissed forty-eight workers (ibid.).

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In response, UNITE began putting pressure on Gap to resolve this problem; it threatened to shame the company through a media campaign that would charge that it sourced from a factory that violated internationally recognized workers’ rights. Gap instructed Kimi to rehire the workers, but, when the company refused, the Kimi union and UNITE sought the support of the left-oriented labor center CUTH to organize a strike that would close the entire industrial park. The strike lasted for five days, and the company agreed to hire back most of the dismissed workers within six months. In the period that followed, the union struggled constantly to force the company to comply with the agreement, recognize the union, and begin collective bargaining. The company responded by stalling, harassing the unionists, and attempting to create a pro-management union inside the factory (Köpke 1999, 7). An NGO monitoring group—much like the one in El Salvador—was formed, but it was not well received by the workers at the time.14 The AFL-CIO then put pressure on the Honduran state via a petition to the U.S. Trade Representative (USTR). Under the GSP (Generalized System of Preferences) program, underdeveloped countries are given dutyfree access to the United States for a number of designated products. Yet, to receive the trade benefits, countries are obligated to take “steps to afford workers internationally recognized workers rights.” These rights include the right to form labor unions, and the 1995 petition emphasized the violation of this right at Kimi. This pushed the Honduran Ministry of Labor and the Honduran employers’ association to ask Kimi owners to resolve the labor conflict in order to avoid trade sanctions that could hurt the entire country. Kimi was backed into a corner. On March 19, 1999, it negotiated a collective contract. In addition to formalizing the institutional representation of workers by the union, the contract’s provisions included a wage increase of approximately 10 percent, better health benefits, increased vacation time, prolonged maternity leave, and permission for union leaders to attend to union tasks.15 The Kimi factory became one of the few unionized plants in the Honduran EPZ sector, and conditions in the factory improved above the industry average. However, the highly mobile nature of the EPZ sector made success ephemeral. Kimi closed operations in Honduras in May 2000 and destroyed the union in the process. Production was moved to a nonunion plant in Guatemala.

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Renegotiating Southern Union Participation in TACs In the early years of the twenty-first century, local unionists with UNITE support continued to use the same fishbowl model in factories like Yoo Yang with some success. But the activists and their allies were forced to rethink their strategies and the cost of organizing. Along with UNITE and the ITGLWF, European labor centers like the FNV in Holland and LODenmark contributed considerable funds to facilitate local organizing efforts. At Yoo Yang, the campaign resulted in the formation of a union (STEYY) and a collective bargaining agreement.16 But this was an exception. Indeed, by the early 2000s, the U.S. fishbowl model of organizing only resulted in the sustained formation of two unions in Honduras. The Dutch labor central, FNV, which provided two-thirds of the funding for the project in Honduras and three other Central American countries, offered this pessimistic reflection: All in all, with much pain and trouble and with an investment of EUR 1,089,741 [US$1,156,215], thirteen (factory level) new unions have been set up in four countries. . . . Only one of these unions has a current collective agreement. . . . As a result of the evaluation, the ITGLWF is seriously considering whether organising in this sector is at all feasible. (FNV 2002, 15)

The project came to a close soon afterward. UNITE and the ITGLWF found a model to successfully organize unions, but this model could not prevent factories from closing and moving elsewhere after being unionized. Moreover, the model proved costly, and some international donors eventually decided to shift their economic support elsewhere. But something interesting developed in the relationship between local left union activists and their international allies. In Honduras, left unions learned that they could do a lot with just the threat of activating a transnational campaign. They would use international support and transnational activism much more selectively. This had the advantage of saving funds. It also had the advantage of giving local activists more control over the strategy. This shift was a result of a long process that began after the local unionists agreed to stop all international activism briefly in the 1990s following an aggressive campaign to end child labor in Honduras. The EPZ Business Association denounced the campaign at the same time that it began a series

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of meetings with the three labor centrals of the country and with government representatives in order to pursue a national response. The parties agreed to ensure respect for labor laws and form bipartite and tripartite commissions that would investigate complaints of labor rights violations. The formation of the commissions came at a price for labor: all parties, including the local left unions, denounced campaigns that claimed that there was “child slavery” in Honduras, a direct reference to the NLC.17 What this suggests is that the pressure created by the NLC’s TAC provided labor with the opportunity to bargain with local employers and the state. But to reach an agreement labor had to use its transnational alliances as a bargaining chip. Behind the decision of the left unions to shun transnationalism was a concern that they didn’t control the strategic direction of the campaigns. But as new abuses in the EPZ sector emerged, and the bipartite and tripartite revealed their limitations, the domestic strategy lost its appeal. Local activists would have to reconnect with their transnational allies and do so while using fewer resources. The terms of the relationship changed, too. Suyapa Salgado explains: “We believe that international denouncements are important. But they must be coordinated with the local unions” (Salgado 2001). In addition to coordination, the CUTH wanted more control over the campaigns. It asked the NLC to provide concrete pressure at critical junctures during union formation or collective contract negotiations. For example, unionists in the Sale City Manufacturing Company called on the NLC to put pressure on the company’s main buyer, J. C. Penney, in order to break an impasse in the negotiations. Similarly, when unionists at Certified Apparel Services of Honduras (CASH) faced dismissal in 2000, they turned to the NLC. The union leader explains, “one letter from Charlie Kernaghan [the NLC director] to the factory owner was enough. Once the owner received the letter, he backed down, and didn’t fire anyone” (Córdova 2001). One of the lead organizers for the CUTH provides an example of this more targeted and locally controlled use of international pressure: One time we were trying to negotiate a collective contract at a factory. We went week after week, and each time the owners had another excuse on why they couldn’t negotiate. One week the lawyer couldn’t make it. Another week, the owner wasn’t there. So we decided, okay, we are going to screw them. We called Charlie [Kernaghan].” (Deras 2001)

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The NLC then, following the careful instructions of the CUTH, wrote to the main retailer with production in the factory, KMart, informed KMart of the bargaining impasse, and requested that KMart leverage its supplier to bargain in good faith. And it worked. This represents a significant transformation in the North-South relationship. Instead of the U.S. NGO determining the campaign issues, picking the targets, and then choosing young Central American workers to travel to the United States to make their case, the CUTH unionists controlled the campaign. They took the initiative, and they explained exactly what they needed. This dynamic repeated itself in several other successful campaigns. Indeed, as explained by a CUTH activist, at times the threat of international action was sufficient to get a factory to change its conduct: Sometimes in negotiations we tell the factory owners, “if you don’t want to resolve this problem we are going to call Charlie Kernaghan.” He is the devil for them. They are terrorized by him. We have to have a weapon that the factory owners are afraid of. If they are causing us trouble, then we can say, “okay, we are going to activate our weapon.” (Deras 2001)

In this way, several cases were resolved without actually organizing an international campaign and without international activists even knowing that the Hondurans were using their names in this way. The activist’s statement indicates that the international anti-sweatshop movement had developed a reputation for being firm and effective. MNCs and local factories knew that the NLC had the capacity to mobilize powerful campaigns that could significantly damage the image of MNCs, which could result in the permanent loss of production contracts for local factories. In reality, such campaigns are costly and extremely time-consuming. The movement did not have the capacity to organize a campaign for every case of labor rights abuse or every attempt to form a union in an EPZ, but it developed the reputation that it could initiate such a campaign if it wanted to do so, and companies did not know when it would do so next. They did know, however, that they did not want to be the movement’s next target. Thus, the credible threat of a campaign was often sufficient to give local activists the power they needed to resolve their issues. The capacity of CUTH to use and control this transnational pressure helped it to grow from three unions with 1,260 members in 1991, to nine

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unions with 4,146 members in 2001.18 In these campaigns, transnational activism was important but it was used mainly to complement, not replace, domestic labor activism. Transnationalism, without mobilization on the ground, would be unable to articulate sustainable demands at the factory level.

Comparing Union Responses in El Salvador and Honduras From 1990 through 2003, there were thirty-nine major unionization campaigns by left unionists in the apparel export sector in El Salvador and Honduras. I surveyed union organizers for each one of these campaigns to determine which actions they used. These survey results allow for an assessment of the frequency of transnationalism as a union response. I found that transnationalism is indeed most common among left-oriented unions where the labor relations regime is highly unfavorable to workers. In El Salvador, with a highly antilabor state system, 71 percent of the campaigns used transnationalism versus 44 percent in Honduras, where state structures were relatively more favorable. The survey results also indicate that in El Salvador the number of strikes was low. However, in 43 percent of the cases, left-oriented unionists used work stoppages or slowdowns as part of the organizing campaign. Perhaps this is because slowdowns are a less risky strategy in such an unfavorable domestic context. Alliances with local NGOs were also very strong (occurring in 86 percent of the cases), suggesting the need for additional support and reflecting the legacy of working together during the civil war. In Honduras, left-oriented unionists were more likely to use strikes (88 percent of the cases). Domestic NGO alliances were less common than in El Salvador. This appears a reflection of the strength of labor unions in Honduras relative to El Salvador, and more favorable labor relations. As a result, perhaps labor felt more empowered to go it alone (see table 3.1). Honduras had a much higher success rate than El Salvador. For much of the late 1990s and early twenty-first century, left unions in Honduras had over four thousand members, whereas left unions in El Salvador had at best five hundred members in any given year during this period. It seems that favorable state structures account for this difference (perhaps as well as the long, rich organizing experience of the Honduran unionists in the

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TABLE 3.1 Left labor actions to form unions in apparel export plants (1990–2003) El Salvador

Honduras

Total number of cases

14

25

Transnational activism

71%

44%

Strikes

14%

88%

Work stoppages or slowdowns

43%

68%

Alliances with local NGOs

86%

36%

Source: Author’s survey

San Pedro Sula banana region). What this suggests is that, while transnationalism was indeed used much more frequently in El Salvador, it was not enough to compensate for the highly adverse state structures. Many of these campaigns were relatively short-lived, and their impact was limited to the successful formation of several unions and a reduction of the more substantial rights violations. The biggest problem facing unionists was the tremendous mobility of the sector. Indeed, the more successful a union was in increasing wages, the greater the likelihood the factory would close and move elsewhere. This dynamic, combined with the entry of China into the WTO, created a decline in union membership in the region. In such a highly competitive global environment, it was very hard to have one set of factories play by tougher rules when the majority of factories did not. One answer to this dilemma was to have all the factories play by the same rules. That is, factory-focused campaigns could be complemented by industry-wide campaigns, as we will see next.

Industry-wide Campaigns The case of Gap and Mandarin in El Salvador did more than achieve the reinstatement of fired union members and the legal recognition of their union. It also established a system by which local activist NGOs would monitor respect for internationally recognized labor standards. According to Jill Esbenshade, “The Gap campaign had marked the beginning of both the concept of independent monitoring and companies’

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realization that they would be forced to monitor offshore facilities” (Esbenshade 2004, 178). Media exposés in the United States of sweatshop violations at a New York plant making Kathie Lee Gifford clothes and a Thai factory in El Monte, California, that kept migrant workers in conditions of indentured servitude also contributed to the impetus for alternative solutions. In this context, Robert Reich, the Clinton administration’s Secretary of Labor, announced his support for a broad initiative to monitor and enforce labor practices in the global apparel industry. This led to the creation of the Fair Labor Association (FLA) in 1999, which established an industrywide code of conduct and a professional monitoring system. The era of corporate-influenced, non-state auditing of global labor rights had begun and grew massively into a multimillion-dollar industry of numerous organizations and an equally large debate among activists, employers, monitors, and international institutions. Unions and progressive NGOs criticized the corporate influencedFLA for its weak code of conduct and monitoring system. They joined the growing student movement and designed an alternative system, the Worker Rights Consortium (WRC), for collegiate apparel. In this model, companies did not participate in the organization’s governance structure. The WRC focused on resolving specific problems by allowing NGOs to investigate workers’ complaints while making the content of the NGO reports open to the public. Code guidelines were also more stringent, calling on factories to pay a living wage and establish neutrality during unionization efforts. There are numerous scholarly studies and debates on monitoring (Esbenshade 2004; Fung et al. 2001; Locke, Qin, and Brause 2007; O’Rourke 2003), and this is not the place to review those discussions. I will emphasize one problem facing all programs, regardless of their structure and interests: how to monitoring such a massive, dispersed, and mobile industry. The WRC acknowledges that while its program has resulted in some improvements for workers, the cases have only represented a small fraction of the factories with violations. In response, the WRC proposed a new program, the Designated Suppliers Program (DSP). This would require apparel companies to source from factories that have been shown to pay a living wage and that respect basic labor rights, including the right to form a democratic labor union.

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There are some advantages to a global industry-wide set of standards. First, if all companies and production facilities play by the same rules of the game, there would be no incentives to close shop to avoid a union, and to move to a country where labor rights are not respected. Second, the approach also clearly establishes the responsibility of apparel MNCs in the conduct of their subcontractors, be they within the United States or abroad. This is no small feat. U.S. law and laws in other countries limit the liability caused by a labor rights violation to the factory where the violations took place. Under the global verification system, companies that provided contracts to these factories were accepting at least partial responsibility for violations that took place there. Of course, this assumes that such programs operate with transparency while prioritizing the best interests of the workers. In practice, many programs have strong corporate influence, and they have been largely inadequate in areas such as ensuring respect for workers’ right to organize (Anner 2010). The limitations of corporate social responsibility (CSR) initiatives returns us to the role of the state and the possibilities of increasing state capacity to enforce labor rights. This is the subject of the next section.

Targeting the State If factory-focused campaigns and industry-wide strategies had their limits, another approach for labor would demand that the state improve its laws and enforcement capacity. In Latin America, most left-oriented labor activists have been targeting the state in one way or another since the first general strikes were called in the late nineteenth century. This is because the state controlled so many aspects of the employment relationship and labor union activities. The state had the power to grant or deny legal recognition to unions, to authorize strikes, and to control collective bargaining (Molina 1995). During much of El Salvador’s history, the state used these extensive rules to deny legal recognition to new unions (Arriola and Candray 1994). In the 1990s, the conservative ARENA government allowed for only thirty workplace inspectors for the entire country. Their salaries, which ranged from $70 to $75 per week, were not enough to cover a family’s

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basic needs (Arévalo and Arriola 1996, 141). To compensate for the low salaries, some staff at the Ministry of Labor took to compiling and selling lists of unionists’ names so that enterprises could blacklist these people. In the 2000s, the ARENA government provided the ministry with approximately 0.2 percent of the national budget, making it one of the most underfunded ministries in the country (Anner 2008). To transform state rules and practices, left labor activists and their allies turned to GSP petitions, which they filed almost every year in the early and mid-1990s and then in 2000, 2002, 2004, and 2005.19 Many of these petitions used specific examples of labor rights violations from the apparel sector. All of these petitions called for state reforms to the labor relations regime through changes to the labor law, better enforcement, or both. The most significant impact of the GSP process was the labor law reforms of 1994, which, among other changes, greatly eased rules for union formation (Davis 1995; Frundt 1998). In my survey of unionization drives in the apparel sector in El Salvador and Honduras I found that between 1980 and 2003, 88 percent of the campaigns entailed some form of pressure on state institutions. Most often, this entailed petitioning or protesting outside the Ministry of Labor to demand union recognition. Political allies in government were used when possible to resolve labor conflicts. TACs also used the Central American free trade talks as a mechanism to leverage state reforms, most notably with improved enforcement by the hiring of more and better labor inspectors (Schrank 2006; Viceministros de Comercio y de Trabajo 2005). For labor in El Salvador, one of the more significant changes came on June 1, 2009, when the left government of Mauricio Funes and the FMLN took office and Dr. Victoria Marina Velásquez de Áviles became minister of labor. By the end of the administration’s first year in office the ministry had recognized ninety-one new unions and four new federations, had increased the number of workplace inspectors by 26 percent to 260, and had increased the amount of fines charged against employers who violated labor laws by 113 percent.20 One left labor unionist told me that at the end of the first year of the Funes-FMLN administration, “Dr. de Áviles was the only really good thing about the government.”21 For a movement that is known for being hypercritical, this was an enormous vote of confidence. Historically, attention to state reform was no less significant in Honduras. Indeed, labor’s strength following the 1954 banana workers’ strike allowed it to lobby for more union-friendly reforms, which resulted in a

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much stronger union movement than in El Salvador. Labor laws in Honduras made collective bargaining much easier than in El Salvador, and once a factory was unionized all workers in unionized work centers paid dues, which made unions financially stable (Posas 2000). In the 1990s, given the dramatic economic transformations brought on by neoliberal reforms and the boom in EPZs, leftist labor activists once again increased their call for state reforms. Honduran labor leaders Ayax Irías and Héctor Hernández, noted, “We must urgently improve the authority of the Ministry of Labor in terms of its capacity to inspect work centers. We must strengthen the capacity of the state to guarantee workers’ rights” (Irías Coello and Hernández Fuentes 1999, 56). States can do what no private code of conduct or monitoring mechanism is able to do; they can impose fines, revoke export licenses, seize a company’s assets to pay back wages, and even imprison perpetrators of severe labor rights abuses. They thus remain a crucial target of TACs. GSP petitions against Honduras were filed with the United States Trade Representative in 1991, 1995, and 2004, by USLEAP, the International Labor Rights Fund, and the AFL-CIO.22 In the context of the CAFTA negotiations, as in El Salvador, TACs pushed Honduras to improved labor law enforcement in the country. As in El Salvador, the promise of more dramatic labor reform was the result of political changes. On January 27, 2006, Manuel Zelaya became president of Honduras and enacted a number of social programs. Most notably he increased the minimum wage by over 64 percent (although the EPZ sector was excluded). No dramatic labor law reforms were implemented, but labor unionists did enjoy unprecedented access to the government. Then on June 28, 2009, Zelaya was removed from office in a coup d’état. In the post-coup government of 2010, labor law enforcement was not a priority. There were only seventeen workplace inspectors for the entire San Pedro Sula region, the heart of EPZ production, inspectors who had responsibility for all sectors of the economy. As a group, they were allotted just one vehicle to conduct their inspections.23 Leaders of left-oriented labor federations like FITH and FUTH became fully engaged in a political movement organized to oppose the post-coup government and bring back a pro-labor government. That is, in the post-coup context, national political goals took precedence over other trade union tasks, such as organizing apparel export workers.24

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The Triangle of Power and Tri-Level Strategies State reforms remain an ongoing challenge. In the end, there is no one perfect target for TACs. Factory-focused campaigns, industry-wide endeavors, and efforts at state reform all had their benefits and their limitations. Yet, when combined, they could complement each other. Indeed, the apparel export industry is embedded in a triangle of power among brandname apparel corporations and retailers, local suppliers, and the state.25 Labor, to modify the system and improve working conditions, has been learning to target each point of the triangle. Activists use GSP petitions and other mechanisms to reform the state. They use TACs to organize local factories, and rely on transnational shaming mechanisms to try to get multinational firms to set industry-wide standards (see figure 3.1). I had been talking about the triangle of power and activist campaigns since my work in El Salvador in the mid-1990s. Then in 2009 I came across a campaign bulletin, put out by the European Clean Clothes Campaign, which illustrated my point. The campaign was designed to support the Hermosa workers in El Salvador. After a detailed account of what had happened at Hermosa, the bulletin ended by calling on activists to write three letters. The first letter was to be directed at the brands that had sourced production to the Hermosa factory. The second letter was to go directly to the Salvadoran government, calling on it to fulfill its obligations. The final letter was to go to the factory owner, Mr. Montalvo, asking him to pay the workers what they were legally due. There it was, in a onepage appeal, a campaign eloquently and succinctly targeting the triangle of power (see figure 3.2).

TACs and the Economic Crises of the Twenty-First Century As noted in chapter 2, the Central American apparel export sector entered a period of stagnation and decline following China’s entry into the WTO, the 2005 termination of the preferential export quotas through the MultiFiber Arrangement (MFA), and the global recession of 2008–2009. Free trade agreements with the United States and Europe did little to assuage this trend. If organizing unions was difficult during the boom years of the 1990s,

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2. Industry-wide initiatives (WRC/DSP, etc.)

Apparel MNC 1. Factory-focused corporate campaigns (Tainan/Gap, etc.)

Apparel MNC

Apparel MNC

Triangle of power Local factories

The state

3. State-centric campaigns (via GSP petitions, etc.)

Figure 3.1 The triangle of power and labor’s tri-level strategy

The Hermosa workers are asking: 1) The brands, which sourced at some point over the past years at the factory to: contribute to a fund to cover their legally outstanding wages, overtime payments and severance pay; to take the necessary action to get the workers reinstated at other suppliers they use in El Salvador (several of those were in fact the ones contracting out the work to Hermosa); to prevent further retaliation against these workers, in the form of intimidation and hiring discrimination; to pressure the Salvadorian government to fulfill the laws, ensure payment of the outstanding wages, overtime payments and severance pay; and respect the right to organize in a union. 2) The government of El Salvador to fulfill the laws, ensure payment of the outstanding wages, overtime payments and severance pay; and respect the right to organize in a union. 3) The owner, Mr. Montalvo, to pay them what they are legally due, offer them re instatement and respect their right to organize a union. Please support them in this request and take some time today to send a protest message. —The Clean Clothes Campaign

Figure 3.2 Example of labor’s tri-level strategy

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what chance did TACs have during an economic crisis? Would transnationalism be less frequent? How might the demands of the campaigns shift? As I returned to the region in 2010, I found that transnationalism was still surprisingly strong. There were less organizing campaigns, but the campaigns that existed appeared more likely to rely on transnational pressure. This is because the economic crisis further dissipated the leverage that apparel export workers had at their work sites. Strikes were increasingly less effective. Between 2005 and 2010, of the major successful union organizing efforts of the CUTH, three of the four involved transnational pressure. Yet the demands also began to shift. While most prior campaigns focused on an effort to form a union, during the crisis many campaigns shifted the demand to full payment of severance pay and back benefits. Such campaigns, when successful, gave workers payments that were rightly theirs, but by accepting severance pay workers were accepting the termination of their employment and, by extension, the termination of their effort to form a union. One example of organizing efforts in the post-MFA, crisis economy took place at Hermosa Manufacturing in El Salvador. The list of labor rights abuses at the factory was extensive. Management often yelled at the workers to produce more. When rush orders came in, workers would be locked inside the factory and forced to work all night. While the management deducted health insurance premiums from the workers’ paychecks, it would not pass the money on to the state social security system, resulting in denial of medical attention to workers. The first attempt at unionization went badly because, according to one activist I interviewed, the union federation sold them out to management.26 By 2005, the economic crisis in the factory was so bad that workers went without pay, provoking a factory takeover and confrontation with management and the police. At this point, women’s NGOs, the CSTS, and international organizations like the Worker Rights Consortium, United Students Against Sweatshops and the Canadian Maquila Solidarity Network came to the workers’ assistance and put TAC pressure on the brands who produced at Hermosa, notably Adidas, Nike, and Russell Athletics. As a result of this pressure, the Fair Labor Association and the universities accepted that workers should be given some emergency support, all the while emphasizing that this was not to be considered part of the severance

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or back pay they were owed by the factory owner. Adidas very explicitly did not want to set a precedent that they would pay severance costs for workers making their products via an independent supplier. The workers argued that Adidas’s failure to adequately monitor and rectify the conduct of its supplier before the crisis set an even more dangerous precedent. The workers continued to pursue their cases through the Salvadoran legal system. In January 2010, nine workers won their court cases, and fifty-four continued to pursue the judicial process. Another effort at organizing in the post-boom years involved the Canadian apparel firm Gildan. In this case, the Honduran unionists in the CUTH, with their Canadian allies, filed a complaint with the FLA and contacted the WRC after eighty union activists were fired and Gildan refused to act quickly to ensure that they returned to their jobs. As an activist campaign picked up, Gildan announced that it would close the factory in September 2005. The FLA Board of Directors took the rare step of voting to put Gildan’s membership in the Association under special review. The factory closed as planned and paid the workers all the benefits they were due, which, as the Hermosa case suggests, is not always that common in Central America. But the effort at unionization terminated with the factory closing. Gildan did promise, as a result of activist pressure, to give the fired unionists preferential hiring options at other Gildan facilities.27 And after years of successfully shaming the corporation for its labor rights violations, the MSN had built a sufficient “credible threat” to Gildan. Several cases of labor rights abuses were thus resolved this way, including that of Nicotex in Nicaragua (MSN 2005). The FUTH campaign to organize workers at the Star factory in Honduras indicates that even in the midst of extreme crisis, TACs can be successful. The Star campaign, which was developed between 2006 and 2007, involved a U.S.-owned factory with 2,100 workers. Star produces for Nike. When workers first attempted to form a union in 2006, they were fired. Intense local activism—which included not only protests in the factory but also a take over of the EPZ in which it was located—was accompanied by an international campaign that included the NLC, the WRC, and ACILS. The result was the formation and legal recognition of a union in 2007. Collective bargaining resulted in a 20 percent wage increase for the workers. What explains the successes and failures of TACs during this period of crisis? First, from Hermosa we see that the limited success there in terms

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of the partial payment of benefits was the result not only of intense transnational pressure on the brands, but also the sheer determination of the workers. When there were no other jobs to be had after their factory closed, workers had little choice but to carry out a multi-year struggle to get their payment. Yet it also shows that, as the economic crisis deepened, more and more activist energy went not into advancing worker empowerment through increased unionization and workplace improvements, but into defensive strategies to make sure workers simply received payments for the proper termination of employment. The successful cases appear to be in factories that were very large and more firmly integrated into global supply chains. Changing trade rules in the first decade of the twenty-first century allowed Central America to produce a greater proportion of the value chain, especially fabric. Fabric production often involves multi-million dollar investments. This is not the kind of factory that owners can close and move elsewhere on short notice to avoid unionization. This may be a potential advantage to unionists in the future.

Conclusion Left-oriented unionists, who had been accustomed to achieving their goals through domestic tactics such as strikes and other protest activities, realized by trial and error that they needed to modify their strategies in order to address the new challenges presented by the restructuring of the global apparel industry. Historical experiences and collective identities rooted in class-based worldviews led them to set their sights on new, more-focused forms of international and domestic solidarity. By building ties with NGOs, international labor unions, and student groups, they were able to shame corporations, employ new organizing strategies, and achieve greater leverage over local factories. These TACs also sought to establish global, industry-wide standards in order to prevent factories from closing once unions were formed, and from moving to other regions or countries where labor laws were more lax and transnational campaigns less prominent. The problem is getting corporations to agree to transparent and meaningful global standards that are effectively enforced. TACs also pressured the state to improve its

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labor regulations. Transforming the state in a more labor-friendly direction potentially would add considerable economic and human resources to enforcement efforts. Yet this approach is vulnerable to shifts in domestic political processes. It also may depend on sporadic critical junctures, such as the labor rights debates that invariably emerge in the context of free trade negotiations. What we have seen here is that it is the combination of these three campaign targets that held the most promise for the movement. This requires solid alliances built on a shared vision and an appropriate division of responsibilities. Bringing together NGOs and labor from the global North and South was no easy task. Labor unions and women’s groups were the first to express their differences. Tensions between groups in the North and the South then followed, which were exacerbated by power imbalances within the networks. But working together was also a learning process, and some activists, most notably in Honduras, learned to renegotiate their transnational alliances in order to gain greater control over transnational campaigns. There was still one more challenge facing leftist anti-sweatshop activists. Some moderate unionists realized that they could use the threat of left unionization to facilitate the legalization of their unions. These unionists and their responses to global economic restructuring are the subject of the next chapter.

4

Labor’s Radical Flank Mechanism in Central America

“What we do is form the unions without going on strike or causing other types of problems. Then we go in and explain to management that we are a different type of union [from the leftist unions], that we are not going to cause disruptions, and that we want to find a way to live together as workers, union and company. . . . Before making a lot of demands, we try to get to know each other first. It is like having a new boyfriend. You have to take time to get to know each other before getting married.” —Moderate union organizer in Central America, 2003

While the left-oriented anti-sweatshop movement grew, moderate and conservative unions in Central America remained largely at the margins. This was not a movement that involved them, nor did it seem to concern them. Lingering distrust from the Cold War era and a nationalist orientation made international alliances for them unlikely. Yet, at the same time, the traditional union strategy of achieving benefits and privileges through pacts with government elites was no longer effective. The neoliberal thinking that had encompassed the region left little room for these macro-level, nonmarket mechanisms. But what would the new moderate union strategy look like? Like the left unions, a process of trial, error, and reflection would emerge. As indicated in the quote above from one moderate union activist whom I interviewed, part of their success lay in avoiding disruption and looking for new ways to collaborate. But why the need to explain to factory owners that they were different from left unions? Indeed, how was it possible to form unions without protesting and shaming apparel MNCs into

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submission? Here is where the story of moderate union strategies becomes intriguing. As left unions gained strength through transnational activism and plantlevel militancy, a new opportunity emerged for moderate unions. Factory owners had learned that one way to block left unionization was to allow the moderate unions to represent the workforce. Most employers will oppose unionization by any organization—leftist or moderate—in order to avoid pressure to increase wages or other interferences in their ability to manage a factory as they choose. But if the choice is between a left-oriented union—that appears more likely to disrupt production through strikes and to make greater demands for higher wages and benefits—and a moderate union, then employers will opt for the latter. What this suggests is that the greater the threat faced by an employer of left-oriented unionization, the more likely the employer will welcome a collaborative relationship with moderate unions. Of course, there is more to the story than this. Collaborationism comes in all forms, from corrupt union bosses to sincere, hardworking, moderate activists. And, like the left activism in the previous chapter, it is a dynamic process involving reflection, alteration of strategies, and occasionally a transformation in political identities.

The Radical Flank Effect The dynamic between left and moderate activists described above is known as a radical flank effect. According to Herbert Haines, who studied the U.S. civil rights movement, a positive radical flank effect exists when the bargaining position of moderates is strengthened due to the presence of radical groups (Haines 1984, 32).1 Doug McAdam adds, “Radicalness provides strong incentives to the state to get to the bargaining table with the moderates in order to avoid dealing with the radicals” (cited in Gupta 2002, 4). Radical groups can also increase the perceived legitimacy of moderate groups (McAdam, McCarthy, and Zald 1996, 14). No doubt, fragmentation and ideological polarization are not sufficient conditions for a radical flank effect (Gupta 2002). In the case of union formation, for a positive radical flank effect to occur, it is first necessary for the political process to entail some degree of blockage. If

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the labor laws and enforcement mechanisms are strong and favorable to labor, management would have little discretion in choosing which union should represent its workers. It is when the laws are deficient, enforcement uneven, and the process lacks transparency that employers are able to intervene in the internal dynamics of union formation and ensure they get the union they want. Second, given employers’ anti-union preference, the threat created by the radical unions has to be sufficiently strong for employers to consider permitting the unionization of their enterprises by moderate or conservative unionists. This is not simply a matter of who gets funding from elite institutions, as in Haines’s radical flank dynamic in the U.S. civil rights movement. In the case of labor relations, it is a matter of allowing for the legal representation of a workforce by a labor union and perhaps the institutionalization of collective bargaining that may last decades. Thus, allowing unionization by one group of workers to avoid unionization by another has profound and long-term consequences on employers. This is not a choice they will make lightly. What types of unions does this form of radical flank mechanism engender? Since the union is formed as a result of a pact between employer and labor union (whether implicit or explicit), it is a top-down form of unionization. And since the apparel export industry is a highly competitive industry, with low value added and low skill requirements, it is not conducive to highly beneficial economic arrangements for the entire workforce. This type of pact has little in common with the postwar social compromise between labor and capital in developed countries. Wages and benefits remain low, and the employment relations remain precarious. In the Latin American context, these conditions may be conducive to clientelistic relations not only between the employer and the worker, but also between the labor leader and the worker. Clientelism entails a relationship based on subordination in exchange for material reward (Fox 1994, 153). It has been common in party politics in Latin America and also in the union movement (Middlebrook 1995). Employment relations in the apparel export sector are particularly vulnerable to payoffs to union leaders in exchange for labor peace, as my case study of El Salvador reveals. In other cases, such as in Honduras, activists from moderate union organizations may use the leverage provided by the radical flank for more positive objectives.

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Moderate Apparel Unions in Honduras The largest and most representative “moderate” labor confederation in Honduras is the General Confederation of Workers (CGT). Categorizing the CGT in this way implies a significant degree of simplification that merits a discussion. The CGT has at times been relatively progressive, but for long periods of time it was outright conservative. Some top union leaders have been accused of corruption, while many others have worked hard and transparently to defend their members’ interests. Unionists formed the organization in 1970 with the encouragement of the Christian Democratic Party (Sieder 1995). Soon afterward, the CGT joined the self-described “Christian humanist” World Confederation of Labour (WCL), one of three major international union tendencies during the Cold War.2 The WCL placed itself politically between what it viewed as the abuses of communism and capitalism. From its original incarnation in the 1920s, it catered particularly to Catholic constituents and maintained ties with Christian Democratic parties. The CGT was initially influenced by liberation theology in the Latin American Catholic Church of the late 1960s and 1970s. While never classbased in orientation, the CGT was considered a relatively progressive organization during this period. By the mid-1980s, a conservative faction of the CGT gained dominance in the organization, and it switched its alliance from the Christian Democrats to the conservative National Party, which enjoyed close ties to the agrarian elite and to the armed forces. The National Party maintained relations with the conservative National Republican Alliance (ARENA) in El Salvador, with which it shared a certain political identity and regional agenda. The CGT’s alliance with the National Party reflected a right-leaning labor identity and worldview. Schulz and Sundloff-Schulz explain, “By the end of the decade, the organization [CGT] would actually be more conservative than the [conservative, U.S.-supported] CTH” (Schulz and Sundloff-Schulz 1994, 211). Ralph Armbruster-Sandoval notes that the CGT’s move to the right was so extreme that it provoked a split in the organization (Armbruster-Sandoval 2005). This tendency continued into the first decade of the twenty-first century. In a 2001 statement, the CGT declared its support for “the gestures and actions taken by the Holy Father [the Pope], the Catholic Church, civil society, the government”

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(CGT 2001). The emphasis on working with mainstream governments was a particularly salient component of the CGT’s strategy. But, as we will see later, the CGT did change. Old leaders left and new leaders and new challenges forced the organization to moderate its views.

Moderate Union Campaigns in Honduras When I began my field research in Honduras, I was convinced that nationalist labor organizations would have an impossible time organizing unions in the highly internationalized apparel export industry. It seemed to me that, given the powerful role of apparel MNCs in dictating the terms and conditions of production contracts, without international campaigns targeting apparel MNCs, organizing would remain elusive. Since I knew that the CGT had a strong nationalist identity and was not interested in transnational alliances at the time, I did not expect it to have much success in the apparel export sector. Then one day as I sat waiting for an interview with an NGO activist, I had one of those moments in the field when a researcher is forced to reevaluate many prior assumptions. I had picked up a magazine, Vida en la Maquila (Life in the Maquila). An article toward the back of the issue declared, “The CGT has 14 unions in the maquila (apparel export plants).” Included in the article was a list with each union, the factory name, and the name of the export processing zone in which it was located (COMUN 2001, 15). Not only was this moderate labor organization successful in organizing apparel export workers, but it appeared at that time to be the most successful organization in the apparel export sector in the country. Undoubtedly this case needed to be explored in greater depth. I set up my first interview with a male union leader in San Pedro Sula, the regional hub of EPZ activity. I really wanted to interview one of the CGT’s head organizers for the sector, but I knew that I had to go through the top union leader to get to her. The union leader noted that there were many obstacles to organizing workers in EPZs, but that there were ways to overcome them without using transnational campaigns. The first step was to make contact with the workers. He said that they ask their members in other unions if they have any daughters working in EPZ factories.3 If they do, the union activists then arrange to meet with these workers, and they explain to them the benefits

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of forming a union. They then ask them to come back with their friends in the factory in order to have a group of workers large enough to form a union. In order to force the Ministry of Labor to begin the process of unionization, they often tell representatives of the ministry that they need to go to the factory to inspect a problem. Once the representative of the ministry is there, the unionists hand them the papers for the legalization of the union in front of many witnesses, so that the representative cannot deny receiving notification of the union.4 It was a simple, but compelling story. Family networks of union members and friendships within the factory formed the basis for union formation. An additional strategy of presenting unionization papers in a public setting added pressure on the government. But it almost seemed too simple, especially in such a highly competitive, highly mobile industry. I then asked if it would be okay for me to meet with the CGT’s organizers for the sector, and, if so, whether I could have the office phone number and street address. He agreed and gave me the information I needed. It was not easy finding the small, old house used by the organizers. It was in a working-class neighborhood far from the city center but close to the EPZs. The organizers greeted me cordially. At that time, they were unaccustomed to receiving foreign researchers. As our conservation progressed, I realized that they were deeply committed to their work. They heard firsthand every day the accounts of labor rights abuses in the factories, and they wanted to change the situation of these workers for the better. They worked hard and pursued the strategy that they felt was best given the circumstances. As we established the list of unions they had organized, they patiently explained each tactic they had used in each case. It was clear that transnationalism was the exception. While occasionally receiving small amounts of money from international organizations affiliated with the WCL, the money was very limited. At the time, the CGT received support from the Dutch affiliate to fund their office expenses, two staff members, and parttime legal assistance. International organizations such as the WCL never worked strategically to put pressure on multinational corporations during organizing drives, although they would write the occasional protest letter. So how did they form all those unions? Clearly, part of the story is just plain hard work and tenacity. Yet, during another visit two years later, one organizer provided more details, explaining that they explicitly made clear

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to factory owners that they were different from the left unionists in that they would not cause disruptions and that there was a way for labor and management to collaborate. That is, they spelled out the “radical flank” mechanism for the factory owners: let us unionize the workforce and you will avoid unionization by more radical unionists. Often owners would accept this incentive, and the CGT apparel unions grew. Of course, this strategy would not have worked if the left unions had not gained enough strength so that the threat of left unionization was credible enough for an employer to allow unionization by a moderate union. But the individual factory owners also mattered. Some were more open to the idea of using a moderate union to block a left union. Others remained determined to keep unions of all suasions out of their factories. As the organizer told me, “Sometimes this works and the company accepts us. Sometimes it does not work and they might fire the workers.”5 For example, at the Winners factory, the CGT faced a very aggressive anti-union campaign by the factory owners.6 But the CGT did manage to form nine new factory-level unions using its collaborative approach during the mid to late 1990s. At the same time, the CGT very clearly rejected transnational activist campaigns to put pressure on apparel MNCs. The organizers explained, “We believe that the problems [in EPZs] should be solved here [in Honduras] and not through international campaigns.”7 At the same time, the CGT unionists did not fall into the corruption trap as was the case among some conservative unionists in El Salvador where the formal labor relations regime was very unfavorable to workers and union principles were lacking, a point I will explore later in this chapter. Not surprisingly, left unionists organized in the CUTH did not see the CGT’s actions in a benign light. They were particularly critical of two cases from the mid-1990s: those of Hu-Ywa and Certified Apparel Services of Honduras.8 The CUTH argues that when they began organizing a union in the Hu-Ywa factory in 1995, the employers attempted to block the union and to replace it with a union from the CGT. The CUTH also claims that a similar situation took place in 1994 when they attempted to form a union in Certified Apparel Services of Honduras. A CUTH representative asserted: “There were strikes. Workers were arrested and detained by the police. But then the company called in another group of people. This group, the CGT, came in through the back door and they formed a parallel

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union in order to cut our union out.”9 The CGT would dispute this claim, and the tensions between the two organizations remain high. What is clear is that the CGT did not use international unions or NGO alliances to achieve success up until around 2005. Its rhetoric and actions reflected its moderate orientation. While the CGT maintained an international affiliation to the WCL, this was a formal relationship that involved occasional conferences and protest letters but no transnational activist campaigns focused on the EPZ sector. The CGT did not work with U.S. NGOs like the NLC. One CGT leader explained, “We have to solve our problems here, without foreign intervention.”10 This leader emphasized that the EPZ problem was strictly a problem for local unions to address.11 Alliances with local NGOs were thus also considered inappropriate. For the CGT, its strategy to take advantage of the threat of radical unions was enough to provide it with some important successes. Between 1991 and 2001, its membership grew steadily. It formed fifteen unions with 5,940 members. Indeed, it became the most important labor organization in the EPZ sector in the country if not the region, all without organizing sustained international campaigns. But the world recession, the aftermath of the September 11, 2001, attacks in the United States, and competition from China led to a significant drop in EPZ production for the first time in twenty years. Companies forced to cut production chose to close unionized factories. By 2002, the CGT’s membership in the EPZ sector dropped to 1,550.

Economic Crisis and Shifting Labor Identities As the crisis deepened, something changed in the CGT’s EPZ organizing committee in the early 2000s. The change was slow at first but by the end of the decade it was dramatic. Not only did the CGT EPZ group abandon its nationalist strategy for transnationalism, it became perhaps the single most important Central American ally of the international anti-sweatshop movement. How and why this change took place is a remarkable and significant story that highlights the dynamic nature of the global apparel industry, labor identities, and union strategies. The seeds for the transformation were planted around 2002, when CGT organizers established their first regular contacts with Honduran

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NGOs who were active in the EPZ sector, particularly women’s organizations. Unlike the majority of CUTH activists in the sector, the main CGT EPZ activist at this time was a woman, Evangelina Argueta, and she was readily accepted by the women’s groups. They began to gain her trust, talk to her about the benefits of international activism, and put her in contact with some of the international activists. During these first meetings, she chatted politely with the new contacts, took their business cards, and stored them away safely in her office. Around this time, the crisis in the EPZ sector was becoming more and more severe. As mentioned earlier, if organizing during times of economic expansion was difficult, organizing in times of economic stagnation and decline proved almost impossible. Statistics I gathered in the field show that the left unions in the CUTH were the first to lose members. Given the conflict between the CGT and the CUTH, this may not have seemed a cause for concern among CGT activists. But what it meant was that the threat of left unionization had declined. As left unions became weaker, they also were less likely to use strikes in the few factories they were organizing, making them even less of a threat. In this context, the incentive for employers to be more permissive of moderate unionization was all but eliminated. The case that transformed the CGT apparel activists involved Russell Athletic and its two factories that the CGT began organizing in 2007. According to one organizer, during the initial contact with the factory the union put its most conciliatory foot forward. The activists emphasized that they wanted peace and harmony in the factory and that they were not interested in having conflicts. The organizer explained, “With Russell, this approach didn’t work. Management maintained an anti-union attitude.”12 This forced these CGT activists into a profound reflection about their strategy, what the employers were about, and who could be trusted to help solve the unionists’ problems in the factory. The idea that locally based employers and labor could work things out and that foreign activists could not be trusted due to their protectionist agenda would have to be reevaluated. In this case, the CGT learned that the employers could not be trusted. At the same time, Evangelina Argueta, came to trust local women NGO activists, who in turn trusted the foreign activists. Wasn’t it time the CGT trusted these foreign activists too? At this point, Argueta went back to her office and looked for the

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business cards the CGT had received years before. She found one for the WRC, and called their office in Washington.13 The CGT thus began its first transnational campaign. When the CGT attempted to organize workers at two Russell apparel plants, 145 workers were fired. After receiving a call from the CGT, the WRC decided to take up the campaign. It issued a report that documented evidence that the workers at the plants were indeed dismissed for their union activities (WRC 2008). In addition to putting pressure on Russell, the WRC report also put the CGT’s apparel organizing committee on the radar screen of international anti-sweatshop activists. And since Russell’s production included university-licensed apparel, United Students Against Sweatshops (USAS) became involved and organized a significant campaign that called on universities to cut their contracts with Russell. USAS refers to the campaign as its largest boycott effort to date. To add legitimacy to the campaign, USAS organized speaking tours of Honduran Russell workers on university campuses. Over ninety-six major U.S. universities—including Columbia, Cornell, Harvard, Michigan, Penn State, Rutgers, Wisconsin, New York University, and the entire University of California system—terminated their licensing agreement with Russell Athletic based on evidence of its anti-union activities in Honduras. The campaign, which soon included a broad array of international activists and unions, demanded that the Fair Labor Association—of which Russell Athletic was a member—require Russell to resolve the conflict by respecting the workers’ right to organize. The pressure was enough to push Russell to enter into serious negotiations with the union and the WRC. On November 17, 2009, Russell announced that it would open a new factory and rehire 1,200 workers (Greenhouse 2009). Russell also agreed to recognize the workers’ union, begin collective bargaining, and adhere to a neutrality clause for all of its other seven factories in Honduras (Hobbs 2009; Russell Athletic 2009). When I visited with the Russell workers during the summer of 2010, five hundred were already working at the new factory, and on the day of my visit, coincidentally, they received some especially good news: the government had legally recognized the union, which allowed it to begin collective bargaining with the company. Problems, not surprisingly, remained. Not all workers were rehired, and the company proved particularly resistant to rehiring a line supervisor who was also a union member.

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The machines used in the factory were extremely old at the same time that management demanded a very high production rate from the workers. But the overall success was unquestionable: a dramatic, powerful transnational activist campaign organized by what was once a moderate and highly nationalistic labor organization gave the anti-sweatshop movement an important success. Where does this leave the “radical flank” mechanism? Was it no longer a viable tool for capital now that the moderate unions were also turning to transnational activism? Not entirely. Six months before the union’s success, Russell Athletic had announced that it had established a system of elected worker delegates inside its non-union plants who would negotiate collective bargaining agreements and administer grievances. The WRC quickly criticized these organizations as a form of company unions (WRC 2009). In other words, as the CGT apparel union began acting more like a left union, Russell established its own worker organizations that operated like moderate unions. The CGT, in effect, had become labor’s new radical flank, and the company formed workers’ groups were to be the mechanism to try to keep the CGT out. Fortunately for the CGT, that strategy failed. The CGT apparel unionists then went on to lead a campaign that pressured Nike to pay US$2 million to dismissed workers at its suppliers (Greenhouse 2010).

Moderate Apparel Unions in El Salvador While El Salvador is known for its militant protest movements, there is another segment of the labor movement that is less studied. One year when living in El Salvador, I decided to research the entire union movement in the country. It seemed to me that a good place to start would be with the conservative General Confederation of Trade Unions (CGS), which was established with the support of a military dictatorship in 1958 and maintained the backing of military rulers and the business sectors in the decades that followed (Lungo 1987, 94). I was curious to know what exactly a conservative Salvadoran labor organization looked like. I arrived for my interview, and the general secretary, Anibal Somoza, invited me into his office. It was unlike any labor union office I had ever seen. The walls were adorned with military photos. One showed a group of

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soldiers proudly displaying their automatic rifles as they stood in front of an attack helicopter. As I sat down in front of his desk, I quickly noticed another choice of office adornments. On the outer edge of his desk were munitions neatly lined up from small to large. In order to take notes, I first attempted to rest my notebook on the small space on the desk between me and the bullets, but I was concerned that I would knock over this carefully organized collection, provoking an uncomfortable start to the interview. I decided to take notes by crossing my legs and resting the notebook on my knee. During the interview I learned that Somoza did not work with any foreign labor organizations or domestic NGOs. Women’s groups were certainly not among his allies. The CGS had even refused to affiliate with any international organization. For Somoza, foreign labor unionists and activists were not to be trusted. Nationalism, not internationalism, dominated his discourse. Unfortunately for my research agenda, female apparel workers did not dominate his membership. To find a moderate labor organization that represented them, I would have to look elsewhere. But my exchange with the CGS displayed an important dynamic of regional unionism: even in the context of civil war and extreme authoritarian rule, there are unionists who will decide to collaborate with the government in order to survive and grow their organizations. With the end of the Salvadoran civil war, the AFL-CIO lost interest in its anticommunist crusade and dramatically cut its support to its union allies in the country. Many of these unions lost strength as a result. But several of these moderate and conservative unionists regrouped and established the National Confederation of Salvadoran Workers (CNTS), which maintained a reformist platform and stayed focused on its immediate economic demands (Osorio 2003, 209–10). It favored a legalistic approach to unionization over one based on membership mobilization. As we will see later, the story of moderate unionism in El Salvador is also one of dramatic transformations, but here the process would be the opposite of what we saw in Honduras. The once radical union federation, FENASTRAS, now spearheaded nationalist unionism and clientelistic pacts with employers. It abruptly broke relations with the political left and dramatically shifted its political and organizational goals to join in an on-again, off-again alliance with the traditional conservative unions and the ARENA government. This case represents a tumultuous and complex transformation not only of strategy but also of political identity.

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The CNTS The most active apparel union of the CNTS is STIASSYC.14 After the politically polarized 1980s, the CNTS stated that it was not interested in partisan politics. Yet it also noted that it identified with whatever political party was in power (Osorio 2003, 209). From June 1989 through May 2009, this happened to be the extremely conservative ARENA party. The principal force in the formation of the CNTS came from the construction workers’ unions, where skilled workers leveraged on behalf of less-skilled workers, and where closed union shops were the norm. The problem was that a successful organizing strategy for construction workers did not transfer well to the apparel export sector, where low skill levels were more common and capital was internationally mobile. Yet STIASSYC attempted to organize the sector. Transnational activism was not high on its agenda, nor was it particularly good at using the threat of left unionization to leverage for unionization by its organization. STIASSYC is an interesting case because it did not pursue any new strategy in response to globalization. STIASSYC formed its first union in 1988 in an EPZ at the Yesan factory in the San Bartolo export processing zone. The leader of the union had read in the newspapers that workers had been badly beaten by a factory manager. He decided to go to the gates of the EPZ and hand out flyers to the workers to invite them to a meeting to discuss their problems. The approach paid off. A significant number of workers arrived at the meeting to address the problem of the abusive manager and other issues. The union representatives told them that they needed a union, and workers began signing up. Once the union leaders had the legally required number of workers, they submitted the documentation to the Ministry of Labor. The union was granted legal recognition soon afterward. It was a legalistic strategy, and it worked for a time. Unlike the left-oriented unions, there was no strike activity, and no international pressure was used on the factory. A STIASSYC leader told me, “I don’t even know what brand names they were making in the factory. At that time, we didn’t even think about brand names.”15 This union’s actions in the apparel export sector did not result in long-term success. In the case of the Yesan factory, the owners decided to close operations shortly after the government notified them that a union had been formed, and the union and the workers’ jobs were lost.

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In the early 1990s, STIASSYC formed several more unions. Again, the focus was on meeting the legal requirements needed to form a union. A union organizer explains, “The first thing we do when forming a union is go to the Ministry of Labor. Some people say it doesn’t work, but we can’t give up on this important institution.”16 Between 1993 and 1996, STIASSYC organized four unions in EPZs (STIASSYC 1999). While none of these organizing drives involved transnational campaigns to put pressure on the brand-name companies, STIASSYC leaders say they did benefit from the pressure put on the entire sector by the AFL-CIO’s petition to remove trade benefits through the General System of Preferences (even though it was not a party to the petition). The government was more careful when El Salvador was under review, the union noted, because they feared that they would lose their trade benefits if more labor rights violations were documented. But once the threat of GSP review was removed, employers continued to violate the law. After Yesan, the next two unions to achieve legal recognition—at S&C Apparel and Mandarin International—were later terminated when management dismissed all of the union members including the entire leadership of the unions.17 With the third attempt—at Autran Zacarias—management pressured the union activists to accept their severance pay and leave their jobs. Some did, but others decided to break with the moderate union’s nonconfrontational and legalistic approach. They went on strike, and they managed to defend the union for two years. In 1994, activists tried to more carefully build a union at Do All Industries. They visited workers at their homes to convince them to join the union. They managed to form the union with fifty workers. At the time, a women’s union group became interested in the conditions of workers in Do All and organized an international campaign for the Do All workers.18 So there was a transnational component to this campaign, but the transnational activism was not done at the initiative of STIASSYC. The Do All union eventually left STIASSYC and began coordinating with an organization led by women. This left a bitter feeling among the unionists. A union organizer explained to me: We haven’t had good experiences [working with women’s groups]. They have plenty of resources to organize events. We, the unionists who do all the work with workers, don’t have any resources. Our members like these events. They get money for transportation, they get food, and everything. In

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the end they identify more with the NGO than with the union. We are left with nothing. Up until this time, the union has been utilized by these NGOs to justify the use of their resources. We haven’t benefited. Rather, we have lost the few members that we had.19

The women’s groups would counter that the male-dominated union movement was unable to identify with the specific needs of the predominately women workers in the apparel sector. That is, they did not bring a gender perspective to their organizing practice. This is why the women workers preferred to coordinate with the women’s groups as opposed to the labor union. Whichever the case, STIASSYC refused to work with any nongovernmental organization after this experience. Rather, it focused on organizing workers through legalistic means. STIASSYC represents a case of a union that did not modify its strategy in the face of dramatic restructuring in the apparel sector. The results of failing to modify its strategy are clear: by the first decade of the twenty-first century, STIASSYC had no active unions in the EPZ sector.

FENASTRAS Few labor organizations that I know about in Latin America have gone through as dramatic an identity shift as the National Federation of Salvadoran Unions (FENASTRAS). Once a core member of the left union movement, it became one of the more conservative and purportedly corrupt labor organizations in the region. The transformation began with a change in leadership at the 1993 FENASTRAS congress when a young husband-and-wife team, Juan José Huezo and Sarahi Molina, took over the organization. Huezo was elected to the top spot of general secretary not long after being released from prison for a labor protest he had participated in during the war. In the 1980s he had been a highly active organizer. I spent many a night at strike sites with him and watched him go straight to work the next day without having slept more than an hour or two. His commitment to his work and his energy seemed boundless. He was hyperactive; at times it seemed as if he could not sit still. This is why when he was arrested in March 1989 for his participation in a protest event inside the Ministry of

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Labor, his incarceration was so hard on him. His was not a personality type that did well locked inside a small cell. He wanted out, and he wanted out quickly. I would visit him with other friends and colleagues every Sunday, first in the nearby prison of Mariona, and then four hours away in Gotera. The more time passed, the more bitter he became. After a period of a few months, he came to the conclusion that the lawyers and the top union leaders in FENASTRAS were not working hard enough to get him out. When he was finally released, he was determined to win the top leadership post at FENASTRAS and then kick out all those whom he no longer trusted. Winning the election was relatively easy since he was considered a bit of a hero by the union membership after having spent time in prison. At the time of his release, the political left in El Salvador was going through a dramatic and confusing ideological transition. Many members of left unions sympathized with or had ties to the Farabundo Martí National Liberation Front (FMLN). When two of the five political factions of the FMLN decided to dramatically moderate their politics to appeal to the “political center,” confusion ensued. The leader of one of these groups, Joaquin Villalobos, went so far as to suggest that labor unions no longer had a role to play in postwar societies since they were instruments of confrontation better suited for periods of civil unrest (Villalobos 1992). During this time, some leaders of the political left were elected to El Salvador’s Legislative Assembly, began earning good salaries, and moved to San Salvador’s wealthier neighborhoods. Huezo watched these developments and decided that he’d had enough. In my last meeting with him, he paced around the FENASTRAS international relations office where I worked. The laces on his new black high-top sneakers were undone, and he vigorously gestured with a.45 caliber pistol in one hand.20 As he moved about the room, he denounced everyone on the political left and the left union movement. He came to the conclusion that he had suffered long and hard during the war and in prison, with very little to show for it. Now he was going to go on his own path. At the FENASTRAS 1993 national congress, accusations of financial misconduct dominated the debate. The organization ended up splitting in two, as the largest national unions walked out. Although these totaled fewer than the number of unions that stayed, they took with them 80 percent of the members. By 1994, FENASTRAS was down to 2,951 members.

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International labor union organizations soon afterward cut off all their financial support to the organization. Most of the few remaining members did not pay union dues, and when they did the rate was very low. Now the organization was facing serious economic problems. But what could it do? According to press accounts, their first strategy was to approach workers in the midst of labor conflicts and agree to negotiate severance pay on their behalf.21 In exchange for their services, FENASTRAS leaders would keep a percentage of the entire severance-pay package. It was a union form of “ambulance chasing.” Employers liked the arrangement because they were able to rid themselves of a unionization attempt. Workers were told that this was the best that could be done for them and that at least they were not being sent home empty-handed. Noticeably absent from the FENASTRAS strategy was any sense of worker mobilization. Rather, the federation’s top-down relationship with its members is more reflective of clientelism than worker empowerment. FENASTRAS soon was expelled from the International Federation of Free Trade Unions (ICFTU), an organization it had joined in 1992. FENASTRAS’ textile workers’ union was then expelled from the International Textile, Garment and Leather Workers’ Federation (ITGLWF). The new strategy of FENASTRAS for economic survival was accompanied by a transformation in its political identity. Its leaders began to speak out against what they viewed as the false idealism of the political left and focus on pursuing more immediate economic objectives. They defined their new goals as adhering to a “Salvadoran vision” as opposed to the vision of what foreign unionists wanted for El Salvador.22 As with conservative unions elsewhere, nationalism, not internationalism, dominated the leaders’ discourse. And in a left-flank dynamic, FENASTRAS soon gained the favor of employers and state representatives by publicly denouncing the transnational activist campaigns of the left. In some cases, FENASTRAS had an interest in maintaining its plantlevel apparel unions, and not destroy unionization attempts by negotiating severance pay for the workers. For example, FENASTRAS formed a union at the Amitex factory and then signed an agreement with its owner in which it promised “labor peace.” In return, according to the pact, the firm agreed to make a deduction from all of the workers’ paychecks in payment of “union dues.” The factory agreed to make the deduction before

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the union chapter was legally established and even though only workers who voluntarily joined the union were legally obligated to pay dues.23 In other cases, FENASTRAS formed unions and then, according to the owner, demanded monthly payments from the company in exchange for not causing disruptions and for preventing other unions for unionizing the workforce. In the case of the Gabo factory, the FENASTRAS leader was accused of demanded US$6,857.04 from the owner. According to the owner, FENASTRAS told him that if he did not commit to the monthly payments, FENASTRAS would have its members inside the factory destroy products by staining clothing set for export. The factory owner began making the payments, but then publicly denounced the arrangement as extortion.24 Yet other factory owners made pacts with FENASTRAS unions. One owner told me that if he could avoid labor conflicts by making monthly payments, of course he would do it. The statement reveals that this factory owner had a clear sense of two types of unions, the ones that cause conflicts and the ones that can be paid off to avoid conflicts. Again this suggests evidence for a radical flank effect. FENASTRAS benefited from the threat of left unionization. Without the presence of left unions, the factory owner would have no incentives to pay for “protection” from this conservative labor organization. The difference from Honduras, however, was the role of corruption and extortion. Besides its relationship with capital, FENASTRAS realized that it could benefit by developing a closer relationship with the government. To do this, FENASTRAS began aggressively denouncing the campaigns of international unions and their local left-oriented union allies. FENASTRAS leaders went to the most conservative newspaper in the country, El Diario de Hoy, and provided the names of the international unionists and NGO activists who had visited the country and who conducted transnational campaigns that criticized working conditions in Salvadoran factories. In one case, FENASTRAS denounced the presence of Neil Kearney of the ITGLWF, arguing that Kearney’s goal was to force Salvadoran factories to close in order to protect jobs in the United States.25 It did not seem to matter for FENASTRAS (nor the local media that covered the story) that Kearney was Irish, and that he represented an international union organization based in Brussels. The willingness of FENASTRAS to denounce international unionists gained it the favor of the conservative ARENA government. The

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government granted FENASTRAS leaders several government posts on tripartite commissions. Frequently these posts came with high daily allowances and other benefits.26 FENASTRAS also established social services with the support of the government and the private sector. For example, in the early 2000s, it founded CENFOTRAS, a training center in everything from industrial sewing machine operations to computer and women’s make-up courses. Government funding for these efforts came through the Institution for Professional Training (INSAFORP).27 And FENASTRAS accepted private-sector funding from EPZ owners. The collaborative approach of FENASTRAS and support from the ARENA government contributed to making FENASTRAS the largest labor center in the EPZ sector. By 2001, it had reportedly over 2,690 members in the sector, while the left-oriented unionists had only 495 members.28 By 2010, its membership had grown to six thousand.

Testing the Radical Flank Effect Several of the moderate apparel unions in Honduras and El Salvador appeared to have benefited from a radical flank mechanism in that the threat of left unionization made their attempts at unionization easier. Does an empirical analysis provide any evidence for this argument? A graph of unionization according to union orientation (left and moderate/conservative) offers some indication of the radical flank mechanism. As we saw in chapter 3, left unionization increased in relation to transnational activism. If a radical flank effect is at work, we would expect to see moderate unionization lagging behind left unionization. We would also expect to see that, as left unionization declines due to the decline in transnationalism, moderate union decline should follow. That is, once the threat of left unionization is removed, employers would have no incentive to accept moderate unions in their factories. The graph in figure 4.1 depicts total union membership by year in the Salvadoran and Honduran apparel export sector for all left unions, and total union membership for all moderate unions. In the early years, only left unions were organizing members in the apparel export sector. But by 1993, as left unionism grew further, the graph suggests that the

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radical flank mechanism produced some results; the moderate unions were subsequently able to organize their first unions. As the left unions continued to rise, so did the moderate unions. In the late 1990s, it appears that the radical flank mechanism may have begun to stunt the growth of left unionization. Then, in the early years of the twentyfirst century, as transnational activism declined, left unions began to lose members, in part because they were blocked by the moderate unions and in part due to the global economic downturn. At first the moderate unions continued to grow. But a year later, as the left declined further, the threat of left unionization appeared to have eased, and moderate unions also lost members (see figure 4.1). Of course, a graph of the sort in figure 4.1 cannot capture all the dynamics of unionization in the sector. Certainly the hard work and creativity of the moderate unions in Honduras played a role, and the apparent use of extortion by FENASTRAS in El Salvador had its own dynamics. But the graph does provide some evidence that the moderate unions may indeed have benefited from the threat of left unionization. This in part could explain how they formed unions in such a highly globalized industry without employing an international strategy. Indeed, when I tested this argument with a more controlled statistical analysis through a pooled time-series multivariate regression analysis, the results were statistically significant (Anner 2009). My structured interviews provide further indications of the moderate union actions in the apparel export plants. Unlike the left union actions that we saw in chapter 3, where, on average, the unionists used transnationalism in almost 60 percent of their union organizing drives, with the moderate unions transnational activism was the exception, not the rule. It was used only in one out of five cases in El Salvador and one out of fifteen cases in Honduras. Moreover, as the case study analysis revealed, the transnational activism was very underdeveloped in these cases. In Honduras prior to 2007 it was limited to a few protest letters. In El Salvador it was done at the initiative of a women’s group concerned about the workers, and not directly by the union organizing the workers. Strikes were also used less frequently by moderate unions than by left unions. Left unions, on average, struck in over half of all their organizing drives. Moderate unionists in El Salvador struck in only one case. In

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7,000

5,000 4,000 3,000 2,000

Left unions

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

0

1991

1,000 1990

Union membership

6,000

Moderate unions

Figure 4.1 The radical flank mechanism in El Salvador and Honduras Source: Author’s survey

Honduras, they struck in two out of fifteen cases. In general, this reflects the moderate unionists’ greater desire for collaboration over confrontation relative to the left unions. Neither work stoppages nor slowdowns were used by moderate unions in El Salvador. However, they were used in almost half of the union organizing drives by moderate unions in Honduras. Thus, these moderate unions were not entirely averse to applying some direct pressure in organizing drives. Where the moderate unions scored particularly high was in putting pressure on state institutions. Mostly this involved lobbying the respective ministries of labor in order to gain legal recognition for a union. In the case of the moderate unions, this was clearly a preferred tactic in forming unions. Left unions also relied on this form of pressure, although they often applied their pressure via more radical forms of protest. Moderate unions were also much less likely to form alliances with local nongovernmental organizations such as women’s groups and human rights organizations (at least prior to 2007 in Honduras). While, on average, 61 percent of organizing drives by left unions involved NGO alliances, only one-fifth or less of moderate union drives involved such alliances. In the case of one moderate Salvadoran union, they were sorry they ever

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agreed to collaborate with a women’s group, and accused the group of pirating its union. In the case of a moderate Honduran union, the lead organizer, who was a woman, came to appreciate alliances with Honduran women’s groups (see table 4.1). A broader comparison of state structures and labor union political identities reveals their proclivity to pursue transnational alliances when organizing new unions. My survey results indicated that transnationalism was over five times as likely by left unions relative to moderate unions. And transnationalism was almost twice as likely where labor faced highly unfavorable state institutions (El Salvador) than where labor had relatively more access to the state (Honduras) (Anner 2009).

Moderate Unions and Political Transition Political changes in 2009–2010 had an effect on moderate unions and their strategies just as they had an effect on left unions, as we saw earlier. To the dismay of many in the union movement, one of the CGT’s most prominent and long-term historic leaders, Felícito Ávila, declared his support for the June 28, 2009, coup d’état against Manuel Zelaya. In the early years of the twenty-first century, Ávila had stepped down after two decades as general secretary of the CGT but continued on as an advisor. After declaring his support for the coup government, Ávila launched a failed bid for the presidency. But when the National Party won, he was rewarded with the post of minister of labor. Other ex-leaders of the CGT joined the post-coup government. TABLE 4.1 Moderate labor actions to form unions in apparel export plants (1990–2003) El Salvador*

Honduras

Total number of cases

5

Transnational activism

20%

7%

Strikes

20%

13%

0%

47%

100%

87%

20%

13%

Work stoppages or slowdowns Pressure on state institutions Alliances with local NGOs * Does not include FENASTRAS Source: Author’s surveys

15

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Yet the remaining CGT leaders criticized the coup and participated in protest events. Several sectors of the CGT, notably the electrical workers, were very active in anti-coup demonstrations. The apparel organizing group in the CGT was also vocally opposed to the coup. Yet it also acknowledged that it was useful having an old member of the organization as minister of labor, and they frequently picked up the phone and called the minister in an attempt to resolve some labor conflicts. In El Salvador, the election of the Funes-FMLN government has not been easy for FENASTRAS, which had grown accustomed to working with the conservative ARENA government for well over a decade. Now the left that FENASTRAS had been denouncing for so long was in power. Would FENASTRAS change its discourse in order to maintain a privileged relationship with state institutions, or would FENASTRAS maintain its conservative identity and become an oppositional labor federation? The answer came on January 11, 2010, when Juan José Huezo and a group of FENASTRAS activists drove to the Ministry of Labor, and from the back of his pick-up truck, with a megaphone in hand, Huezo denounced the new minister for not supporting FENASTRAS, particularly for blocking FENASTRAS participation in the tripartite Superior Council of Work.29 The 1990s conversion of FENASTRAS into a nationalist, pro-business organization ready to denounce left unionists and their transnational allies was not about to change. FENASTRAS would lose its close ties to the government but maintain the support of the business sector. In sharp contrast with the large May Day activity of the main progressive labor organizations in the country, on May 1, 2010, FENASTRAS joined with other conservative and moderate labor organizations in a small protest march. Speaking on behalf of a new umbrella organization, the Movement of Trade Union and Organizational Unity of El Salvador (MUSYGES), FENASTRAS denounced the Funes-FMLN presidency and the conduct of the new minister of labor.30 In sum, the political transitions had different impacts on the two moderate federations. In Honduras, the coup pushed the new leadership of the CGT further into progressive activism where it participated actively with traditional left organizations to protest the coup and the post-coup government. At the same time the coup drew the more conservative ex-leaders of the CGT into the post-coup government. In El Salvador, the election of the left pushed FENASTRAS further into its anti-left crusade and deeper into

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an alliance with the business sector and conservative labor unions. In other words, these dramatic political transitions forced the two organizations to further define themselves. And the decisions they made put them on very different paths.

Conclusion For much of their histories, moderate and conservative unions in Honduras and El Salvador managed to organize workers in the apparel export plants while mostly shunning transnational activism and strike activity. They did not put pressure on vulnerable nodes of the buyer-driven global commodity chain, nor did they pressure the local factory owners through radical strike activity in order to achieve their goals. Their strategy responded to a very different logic. Most notably, the threat of left unionization created an opportunity for moderate unions when employers realized that moderate unionization could block radicals. This mechanism played out differently in El Salvador and Honduras. In the case of FENASTRAS in El Salvador, its modus operandi focused on more extreme measures. In some cases, the federation would accept the dismissal of union activists—and thus the destruction of a union—if the FENASTRAS leaders were able to keep a percentage of the severance pay. In other cases FENASTRAS established clientelistic pacts with employers in which it agreed to prevent left unionization in exchange for monthly payments by factory owners. In Honduras, moderate unionists combined grassroots organizing, a nonconfrontational image that it carefully cultivated with the business community, and the threat of left unionization to make gains. They proved to be among the most successful unionists in Central America in the 1990s and early 2000s. When left unions entered a decline, with growing economic competition and crisis, the radical flank strategy was no longer viable. Employers showed that their deeper preference was to be union-free, and moderate unions began to lose members. Yet the situation of labor organizing remained very dynamic, as actors experimented with new strategies and learned from past mistakes. Indeed, by the end of the first decade of the twenty-first century, responding to the diminished effect of the radical flank mechanism, and shaped by new ideational influences via alliances

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with women’s groups and new international affiliations, moderate union organizers in Honduras pursued their first sustained transnational campaign. The story does not end here. Employers that felt the pressure from the new transnational campaign began to create company unions to protect themselves. The radical flank effect was thus duplicated, as the CGT became the new threat.

5

Transnational Labor Networks in the Brazilian Auto Industry

“A strike is a small action,” observed Luiz Marinho, then president of Brazil’s large and militant metalworkers’ union as he thought about the huge stock of unsold vehicles in Brazilian auto plants. But what to do? Marinho had an answer: “Since Volkswagen management in Brazil insisted on the firings and gave no sign of wanting to reopen the negotiations, we made the decision to go to Volkswagen headquarters in Germany.” Through twelvehour negotiation sessions, and with the support of German unionists, the transnational negotiations saved 1,500 jobs.

Auto unionists, with their large factories, skilled workforce, and stable organizations, are in many ways the polar opposite of the precarious, lowskilled, young, female workforce in the apparel sector. Yet two aspects of left unionism in the sectors are similar. First, traditional left union strategies, such as strikes, are no longer as effective as they once were. Second, one viable alternative strategy involves transnationalism. But what would auto union transnationalism look like in times of globalization and crisis? It would take me numerous trips to Brazil and fourteen months living in the country to get an answer. My first major interview in Brazil was with Valter Sanches, who then was the leader of the Mercedes Benz works council at the company’s São Bernardo factory. In addition to the large union hall in São Bernardo (complete with a small library and research center), Sanches and his fellow activists were given an office inside the factory. This stood in stark contrast to the severe lack of resources for unionists in Central America, who at times were forced to hold their union meetings in a park for lack of facilities and resources.

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These differences were just the beginning. When Valter Sanches approached me to begin our meeting, he asked me if I would prefer to converse in English, Portuguese, or German. German was not an option for me, so I decided to practice my Portuguese. As I did, I quickly learned that Brazilian auto unionists were skilled not only at languages but also at national and international labor activism. They had a sophisticated understanding of the industry, and had developed strong international ties with some unions that were almost twenty years old. They thought carefully about what they did, and they were able to maintain control over international actions and demands. This was quite a change from Central America, and it took me some time to adjust to this form of unionism. I was not the only one who had to modify my ideas of southern union strength and capacity. A Canadian union once contacted the Brazilians and asked how the Canadians could help during a strike. The Brazilians responded that they needed pressure put on the auto companies to resolve the conflict. The Canadians asked if they needed money. The Brazilians said no, but the Canadians assumed that they were just being timid and they decided to send money anyway. The Brazilians returned the check. The autoworkers’ unions in Brazil were financially strong, strategically clever, and well organized. If there was to be international solidarity, it would be among equals. This did not mean the Brazilians were not without their problems. What union leaders found in the era of international industrial restructuring is that auto producers had organized their operations to allow production to shift to other countries and continents to pick up the slack for a plant that had stalled for whatever reason, including a labor conflict. At the same time, in the late 1990s Brazil was suffering from a crisis of overproduction. Historically, striking was the union movement’s key source of leverage, and the Brazilians had become masters of strikes. Yet in this new context, strikes could serve the company well by allowing it to rid itself of excessive inventory while not paying wages. Finally, as described in chapter 2, industrial restructuring in the form of modular production would segment and disperse the Brazilian autoworkers, creating an additional challenge. The left auto unionists in Brazil (just like the Central Americans) would have to find new strategies and new points of leverage in the global commodity chains to successfully defend their members and their organizations. Yet, unlike in the retailer-controlled apparel industry, auto

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production was still very much controlled by the large auto producers. Transnationalism in this case would need to target production headquarters like that of Volkswagen in Wolfsburg. Such targeting would require the strongest alliances with foreign labor unionists as opposed to alliances with activist NGOs. Long job and union leadership tenure allowed for more sustained cross-border relationships, unlike the more sporadic TACs in Central America. In effect, left Brazilian autoworkers would form transnational labor networks (TLNs).

Left Auto Unionists in Brazil As auto production boomed in the late 1960s and early 1970s in São Bernardo (an industrial suburb outside of São Paulo), a new form of unionism began to take shape in the sector. The union leadership in these foundational years could be characterized as moderate-left. It did not espouse socialism or the overthrow of the Brazilian state. It did, however, believe in base-level activism and solid, plant-level organization (Humphrey 1982, 130). These unionists demanded labor law reforms that would eliminate state control over the unions, and they called for democratic national elections. Their demands were shaped by their rejection of state corporatist controls while their actions were shaped by new forms of social activism that had been influenced, in part, by the progressive wing of the Catholic Church (Keck 1995). By the late 1970s, the labor movement of São Bernardo and surrounding areas grew increasingly discontented with the national economic and political situation. Union activism in the metalworkers’ sector escalated and became more militant when unionists learned that the government had dramatically under-reported the inflation rate to keep wages low. A year later, defying the military’s antistrike law, the metalworkers went on strike, prompting subsequent government intervention in the unions and the arrest and imprisonment in the 1980s of strike leaders, including Luiz Inácio Lula da Silva (who would go on to become Brazil’s president in 2003). The decade of the 1980s was one of the eras of the greatest strike activity in Brazilian history. There were particularly creative forms of labor actions in this period. Autoworkers began employing the “popcorn strike”

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( greve pipoca), where short strikes along the production line would pop up at unexpected times. They also developed the “angry cow strike” ( greve vaca brava) in which targeted strike actions would “kick up” simultaneously. The actions were designed to keep employers off guard while also saving the union strike funds and protecting more vulnerable workers from dismissal. The metalworkers (along with bank workers, agricultural workers, and several other strategic sectors) formed what became known as “new unionism,” which was institutionalized in the left-oriented labor central, the Central Única dos Trabalhadores (CUT) in 1983. Many of these groups that came together to form the CUT brought socialists and other left influences to the organization. When formed, the CUT held to a class-based political identity. The goal was radical, systemic transformations, not mild reforms. Following the end of the Cold War, radical tendencies remained in the CUT in the 1990s and early 2000s, but the dominant trend was a more moderate left, that combined class and social-based political identities by leaning toward European social democracy (Antunes 2000).1 The shift is a reflection of the democratic transition and the changing economic context. The historic relationship between the Brazilians and their European counterparts, particularly the Germans, also influenced their identity formations. Yet, in many ways the CUT remains to the left of most mainstream European labor centrals. Institutionally the CUT continued to adhere to an oppositional union ideology, as reflected in its bylaws that refer to its class-based identity and pursuit of significant social transformation (CUT Bylaws, Title II, Chapter I, Article 2). During the 1990s and early 2000s, as Andréia Galvão explains, “the CUT opposed administrative and social security reforms, [and] denounced the privatization policies, the opening of the markets, the dismantling of the public services and the reduction of rights” (Galvão 2006, 346). Yet Galvão also adds that the CUT moderated much of its radical rhetoric, and increasingly combined negotiations with its protest activity (ibid.). The metalworkers’ sector, of which the autoworkers form a part, first came together as a category of the CUT in 1988. A year later they established the CUT Metalworkers’ Department, and in 1992 they became the National Metalworkers’ Confederation (CNM). Like their parent

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organization, the CNM adheres to a class-based collective identity. Valter Sanches, a leader of the CNM, explains: “We believe there are fundamental differences between capital and labor. We cannot be one family inside the factory. We don’t collaborate with capital, we negotiate.”2 The CNM represents all CUT metalworkers in Brazil. Its largest union member is the Metalworkers’ Union of the ABC Region (SMABC). In sum, the CNM has been a left-oriented labor organization representing auto assembly workers. These workers, as highlighted in chapter 2, began facing a myriad of new challenges linked to trade liberalization, geographic dispersion of assembly plants, and the segmentation of the industry via modular production. How would they respond? As we will see next, in a broadly similar manner to left-oriented apparel workers in Central America, these Brazilian autoworkers developed new strategies that included transnational alliances and that targeted specific factories, specific corporations, and the state. Yet their actions would be more sustained and be built on union-to-union alliances as opposed to union-NGO alliances. They would thus take the form of transnational labor networks (TLNs). Like the left in Central America, the Brazilians would first begin to address the challenge of industrial restructuring via a domestic strategy.

The State and the Tripartite Sectoral Chamber Following the dramatic economic internationalization and industrial restructuring that came with the market-oriented reforms of the 1980s and early 1990s, left labor activism was transformed, but it was not immediately internationalized. Left-oriented Brazilian autoworkers agreed to participate in tripartite negotiations via the sectoral chamber (câmaras setorias) promoted by the Brazilian government. This marked a dramatic shift from the radical strike activities of the 1970s and 1980s. The auto chamber (which was one of several sectoral chambers) was originally the idea of the José Sarney administration (1985–1990), but at the time the government’s program did not include union participation. President Fernando Collor de Mello (1990–1992) reactivated the chamber idea, this time inviting in the unionists (Bresciani 1997; Martin 1997). The question at first for the left auto unionists was whether they would want to participate in what for some was a collaborationist exercise. For

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Glauco Arbix, a Brazilian labor scholar who studies the sector, the decision to join the chamber started with a failed attempt to prevent a Ford factory in São Bernardo from closing.3 In June 1991, the president of the union decided to go to the United States to negotiate directly with Ford headquarters. At the meeting, Ford informed the Brazilians that it was prioritizing jobs in the United States and that it would not reverse its decision. The UAW, for its part, was unable to help them save their jobs. After the meeting with Ford, the Brazilians and UAW representatives met for a tour of the city of Detroit, which could be seen in dramatic decline. The Brazilians feared that if they did not take action this could be the future of São Bernardo, the auto production center of Brazil. For Glauco Arbix, the trip showed the unionists the global depth of the problem in the auto industry, and it made them understand the limits of traditional union strategies. The trip also showed the union “the limits of solidarity, in particular of the [North] American unionists who were totally preoccupied in the defense of their own jobs” (Arbix 1996, 73). A Ford union leader in São Bernardo told me that the trip further convinced the Brazilian unionists that the best response to their concerns over job security and the general future of the auto industry in Brazil was national tripartite negotiations (Marques da Silva 2002). For Brazilian unionists in European-owned auto plants, the decision also resulted from their interactions with social democratic European unionists who exposed them to the idea of social partnership.4 In addition to the government and the autoworkers’ unions, the three most important auto business associations had also agreed to participate (Martin 1997). The active participation of the business sector in the chamber was a decision that was not taken lightly. That is, for both labor and capital, tripartite negotiations represented an important shift in their strategies (Bresciani 2002). The chamber lasted for two and a half years, and two agreements were achieved through it. In the first accord, in March 1992, the government agreed to forgo tax income per car while auto employers accepted lower per car profits. This resulted in a 22 percent reduction in the costs of cars in Brazil due to drops in taxes and profits. Gains to offset these losses would be achieved through a boom in production. The benefits for labor included employment stability and monthly salary adjustments on par with inflation. The second agreement, signed in 1993, facilitated the promotion of a low-cost “popular car” and established that wage adjustments should go to

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the auto parts sector too. The agreements caused a boom in auto production, slowed union membership loss, and brought about a slight increase in wages. Yet, despite the success, the chamber’s vitality would be short-lived. Collor resigned in December 1992 in order to avoid impeachment. Under the new government, Fernando Henrique Cardoso became finance minister and declared the auto chamber a form of neo-corporatism that was inappropriate in a liberal market economy. Soon after Cardoso became president in 1994, the chamber collapsed because of lack of government support.5 In its short life, the chamber showed that labor strategies involving the state can produce important, positive results. Without the participation of the state, it would not have been possible to restructure the tax system, which then opened the door for the employers to allow for job stability and wage growth. The changing political context removed the option of this state-centric strategy from labor. In its wake, the government established a “new automotive regime” based on international market-based competition. Fiscal incentives became decentralized to the state level and no longer involved the participation of labor unions. The result was a “fiscal war” in which local state governments competed for foreign investment by lowering (if not eliminating) taxes and providing subsidies to auto MNCs (Arbix 2001). This era also saw the development of modular production, the system of auto production described in chapter 2 that fragmented the labor movement and created new coordination problems among local unions. With a relatively unresponsive state, the left unionists found that to be effective they needed to combine domestic protest actions with alliances that targeted the producers in the auto industry production chain. As we will see next, their first major campaigns took place in the older factories, which were facing pressures to restructure or close due to the boom of modular production outside the industrial heartland of Brazil. But what we will also see is that labor strategies developed very differently in U.S. auto companies than they did in German ones. Not only did the U.S. firms lack a history of social partnership, the U.S. unionists also did not fully embrace international activism. The Germans, on the other hand, with their long history of social partnerships, developed international structures that facilitated international exchanges (such as world councils and international framework

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agreements). The German unions also were relatively more internationalist at the time than the U.S. unionists. As a result, Brazilian and German unionists developed strong transnational labor networks (TLNs), whereas transnationalism was underdeveloped in the U.S. firms, as we will see next.

Truncated Labor Transnationalism at Ford in Brazil The Ford auto assembly plant in São Bernardo has been the largest Ford factory in the country for the last several decades. Unionists from this factory were a fundamental part of the contentious protest events that contributed to ending military rule in Brazil and to ushering in a new era of oppositional unionism in the country. In 1981, workers participated in a crucial strike in which they demanded not only improved working conditions and respect for labor rights but also an autonomous factory commission. This demand was especially important since Brazilian law did not allow for in-plant union representation.6 The unionists won their demand for a factory commission and opened the door for unionists in other auto plants to do the same. Transnational labor solidarity was minimal during the strike. As the works council leader from Ford in Brazil, Rafael Marques da Silva, explains: “During the strike of 1981, there was no strong support from abroad. But during this period, European unionists began to pay attention to us. They were curious. They wanted to get to know us. Who are these unionists? What is their political orientation?” (Marques da Silva 2002). Brazilian unionists began receiving visits from foreign union delegations and exchanged information and ideas. But domestic activism predominated and the strike continued to be the repertoire of choice for the unionists during the 1980s. Indeed, Ford unionists continued to organize important strikes in 1983, 1985, and 1987. While contacts began with Europeans, the relationship with U.S. unionists was limited. The United Auto Workers (UAW)7 held to a more nationalist orientation at the time. The roots of that nationalism went back to the oil crises of the 1970s and the boom in the sales of fuel-efficient Japanese cars. As auto employment from 1978 to 1981 dropped from 760,000 to 490,000, U.S. auto unionists increasingly blamed increased trade with

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Japan for their plight. They lobbied the Federal Trade Commission to impose curbs on auto imports (Frank 1999). The union then sought to save jobs by saving U.S. auto corporations through concessionary bargaining8 (Katz 1985; Kochan, Katz, and McKersie 1994). With time, the UAW would increase its international contacts and coordination, but did not fully regain the strong internationalist worldview of the Walter Reuther era.9 In 2002, when I first interviewed a Brazilian union leader from Ford, I asked if he had sustained solidarity relations with U.S. auto unionists. He responded: “No, but we would like to. Can you help us?” (Marques da Silva 2002). The situation illustrates that international labor solidarity requires more than one party to be willing and able to cooperate. The Brazilians wanted to establish a transnational labor network with the U.S. unionists, but the U.S. unionists had other priorities at the time. The Ford Brazilian unionists’ first international contact was not with Americans. Rather, they used their national union to get support from Germany unionists, which came through exchanges and discussions of strategies. For example, in the summer of 1990, the Brazilians were seeking a wage increase to compensate for the dramatic drop in real wages due to high inflation. But the union did not have a strike fund to provide income to 6,500 striking workers. They decided to implement an idea that they learned through exchanges with the Germans. A strike was organized by the plant’s strategic workers, which in this case meant the maintenance and toolroom workers.10 All of the other workers would show up for work, and thus be paid. In effect, the entire factory would be shut down, but the cost to the union for organizing the strike would be minimal. The unionists effectively implemented the strategy, but Ford managers decided not to pay anyone, including non-striking workers. Workers became furious, and the situation turned violent. Some workers began burning cars and damaging the facility (Martin 1990; Véras 2001). The German strike strategy did not work as planned. But this case does show that the relationship between the Brazilian and German unionists involved more than a basic information exchange. Many of the strategic ideas shared between Brazilian and German unionists would provide more positive results later. The Brazilians also learned that there were indirect ways to target Ford headquarters by developing a TLN with the Canadian Autoworkers

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Union (CAW). From the 1930s to the 1980s, Canadian autoworkers were a part of the UAW. For much of this history, the relationship allowed U.S. and Canadian autoworkers to join forces to negotiate with the same “big three” U.S. auto firms. However, the Canadian unionists began to desire autonomy from the U.S.-dominated leadership, and they wanted an independent strategy (Green and Yanarella 1996, 7). In 1984, the Canadians decided to break their relationship with the UAW, and they formed the CAW. The Canadians were also reacting to the growing nationalism in the U.S. union movement in a context of expanding power of U.S. multinational corporations. This contributed to a desire to work with unionists outside North America who were facing U.S. economic influence. In the 1990s, the CAW developed relationships with unionists in Brazil and South Africa, and made contacts in Asia. The Brazilians and South Africans had experienced harsh authoritarian rule and had pursued dynamic and progressive forms of labor unionism. For the left-oriented Canadians, they made ideal allies. Yet their endeavor was not based on altruism and leftist idealism. Hassan Yussuff, a CAW leader, explained their motives in these terms: We don’t do this to feel good or out of charity. We do it to build international solidarity around the world. For this to work, we need to build a common understanding and a strategy where we all benefit. . . . It’s about the kind of world we subscribe to. Brazilian workers are not our enemies; they are our allies. We must avoid the nationalist trap. (Yussuff 2001)

Carol Phillips, then director of the CAW International Department adds: “You have to protect your members. This is natural. Every union does this. But you have to do it in a way that is least damaging to workers in other countries” (Phillips 2002). In 1991, the CAW had one staff member dedicated to international work. Ten years later, they had three full-time staff dedicated to international relations and an annual budget of US$1.9 million. Thus, owing to different historical experiences and ideational influences, the Canadian autoworkers pursued transnational union alliances, most deeply with like-minded unionists in developing countries. In 1997, the CAW launched the “Ford Exchange,” which involved baselevel unionists in Canada, Brazil, and South Africa. Unionists traveled to

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each country to visit factories and communities. For Carol Phillips, the exchange was about workers getting to know each other and seeing firsthand working and living conditions in other countries. Unionists also had the chance to exchange experiences about how to respond to restructuring. In the case of South Africa, unionists effectively pressured Ford to cover HIV/AIDS treatment for infected workers (Phillips 2002).

A Second Try at Detroit In 1999, Brazilian Ford workers began one of their most important campaigns to date, which highlighted how their strategy had evolved to combine domestic mobilization and transnational negotiations. Following the Asian financial crisis of 1997, sales at Ford dropped dramatically, and on December 18, 1999, the company decided to fire 2,800 workers. The decision was unilateral, and Ford managers made it right before the Christmas break, apparently to minimize the union’s ability to respond. Moreover, the factory was operating at overcapacity at the time, and its auto lot was filled with unsold cars. The union was very good at organizing strikes. But a strike would be of little value in such a situation and might even be welcomed by the company as an opportunity to sell off some of its inventory while not having to pay production workers.11 Because the firings took place right before Christmas, and unemployment was a growing public concern, the union received the community’s sympathy and support. Families and local Catholic and Protestant churches became involved in the campaign. An NGO from Rio de Janeiro donated twenty-five tons of food to the dismissed workers. The union also worked to get political support. It was closely connected to the Workers’ Party (PT), and many of the PT’s local politicians expressed their support. Auto unions from Germany, South Africa, Spain, and the United States denounced Ford’s decision. The International Metalworkers’ Federation, several Spanish unions, and the UAW provided additional support. The national government, however, was not receptive to the plight of the workers, even though, as one union leader noted, “[this situation was] a consequence of the economic policy of the Federal Government” (quoted in Véras 2001: 61). At the time, the government provided millions of dollars in subsidies and low-interest loans to assist Ford in establishing a new modular factory in Bahia while Ford eliminated an even larger number

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of higher-paying jobs in the São Paulo region. When President Fernando Henrique Cardoso was asked to use his influence to encourage the company to reverse the dismissals, his response was, “I’m not the president of Ford. I’m the president of the Republic” (quoted in Véras 2001, 86). While access to the state was blocked in this case, the protest activity and community support eventually convinced Ford to allow some of the workers to return to their jobs. But most workers did not get their jobs back, and those who were working were not given a commitment to job stability. The union came to realize that, as for Volkswagen workers, job stability was linked to having a new car model produced in the factory. This was because, car models were on a five-year cycle. If a factory did not have a new model lined up prior to an old model being phased out, thousands of workers would lose their jobs. The decision of where to produce new Ford car models was made in the United States. In the words of one unionist, “We realized that we needed to get new production orders in the factory and that it was Ford headquarters that would make that decision” (Marques da Silva 2002). In 2001, union leaders—including the SMABC union president, Luiz Marinho— traveled to Detroit to negotiate directly with Jacques Nasser, the CEO of Ford. The negotiation skills of Marinho, combined with the union’s reputation for solid base-level support and mobilization capacity, contributed to leveraging Ford into a five-year guarantee of employment for Brazilian workers in the São Bernardo plant. The case of the left union in the Ford factory in São Bernardo provides evidence of many levels of transnational activity. First, it included basic information exchange, seminars, sharing of union strategies, and visits by international unionists. It also went beyond these more routine and institutionalized interactions to include transnational negotiations. However, the Brazilian unionists at Ford did not manage to establish a sustained relationship built on a dense exchange of information and horizontal relationships with the U.S. unionists, due to limited U.S. union interest and the lack of an institutional framework. The Brazilians were able to establish a small TLN with Canadian and South African unionists. Direct negotiations with Ford in Detroit were a crucial development in this case. While skeptics of labor transnationalism are right to note that transnational collective bargaining is unlikely in the global economy, not all transnational negotiations have to cover wages and benefits to be of strategic importance. Indeed, the use of transnational negotiations by the

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Brazilian unionists to secure the production of a new car model in the Ford factory, which guaranteed the economic viability of the plant and five years of job stability for six thousand workers, was no small feat.

Ford Bahia The left unionists at Ford resolved their problem in São Bernardo. But they realized in the process that if they did not unionize Ford workers in Ford’s new modular plant in the northeastern state of Bahia, their ability to achieve their demands in the future would be weakened. While workers in the unionized plant in São Bernardo earned $531 per month, Ford was paying workers in Bahia $158 per month. This situation was a reflection of the dynamic outlined in chapter 2; the new assembly plants in Brazil were built outside the union stronghold of São Bernardo in regions where wages were lower and unions were weaker, and the system of modular production kept it that way. Brazilian law, as noted earlier, does not allow for national unions and national collective bargaining agreements in the auto sector. This is a crucial limitation of the law. A national union would have allowed the strong metalworkers’ union in São Bernardo to use its power to leverage on behalf of the workers at the new plant located over a thousand miles away in Bahia. Instead, the workers in Bahia had to rely on the local metalworkers’ union of Bahia, STIM, which was affiliated with the CUT metalworkers’ confederation, CNM. STIM began a campaign to organize the workers in Ford’s Bahia plant, but it quickly ran into its first major problem. Another local union also wanted to represent the Ford workers in Bahia. It was tied to the moderate national labor confederation, Union Force (Força Sindical). Union Force had formed this local union in the small municipality in which the Ford plant was located (Camaçari) in order to represent the workers. It seemed that Ford preferred the Union Force group because it was considered the less confrontational of the two. The local government, which did not want to frighten off such an important U.S. MNC with radical unions, also appeared to have a preference for the Union Force group.12 Affiliation rates, however, indicated that more workers preferred the CUT union to the Union Force group, and soon the CUT/CNM gained the upper hand in representing workers and in leading protest activities.

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Workers faced numerous problems in the factory. Wages, as noted, were much lower than in the Ford plant in São Bernardo. They were also 31.30 percent lower than the average wage for metalworkers in the region of Bahia. One worker noted: “We had to have a strike in order to have a morning coffee break.”13 On April 12, 2002, workers protested outside the factory to demand a wage increase and recognition by Ford of the CUT union. The police arrived to put down the protest and fifteen workers were wounded. The local Ford management denied having called the police, but it remained unclear how the police knew to arrive even before the strike began or how they were allowed to enter the factory compound without management’s permission.14 Results were better for workers after a three-day strike in March 2003 when management and the union reached an agreement on wage increases.15 Additionally the agreement allowed workers to establish a factory commission and led to the de facto recognition of the union (Serravalle 2003). The agreement was made possible partly by the strong support from the union in São Bernardo. The top representative of the Ford union from São Bernardo lived in Bahia for a period to help the workers organize the strike and establish their union. Notably, there was no significant U.S. union support, despite repeated requests from the Brazilian union, which hoped that direct leverage on Ford headquarters in Detroit by Americans would resolve the conflict quickly. The Bahia campaign was also a reflection of a different union demand. The case of the union in São Bernardo involved job security, which was linked to producing new car models, a decision that was made in the United States, not Brazil. Here transnational negotiations were crucial. In the case of Ford in Bahia, the demand was for wage increases and union recognition, issues that local management and local government controlled. Transnational pressure would have helped, but it was not essential. As it turned out, local and national pressure was sufficient for the Bahia union to achieve its goals.16

TLNs in German Auto Companies Volkswagen, São Bernardo The São Bernardo Volkswagen plant was inaugurated in 1959 by the then president Juscelino Kubitschek. At the time, it was the first Volkswagen

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factory outside of Germany. In 1974, some thirty thousand workers were employed in the factory complex, which looked and felt like an entire industrial city. Yet it would not be until twenty years after the factory’s opening that meaningful contact between German and Brazilian unionists was established. The contact developed at the same time that progressive unionists had come to dominate the auto union movement in São Bernardo and began a series of militant strikes. In that context, in 1978, Brazilian and German unionists working for Volkswagen met at an international labor conference and began discussing their experiences. When the Germans learned about the harsh conditions that Brazilian Volkswagen workers faced due to the military dictatorship, they expressed profound concern (Meyer Nascimento 2000, 88). Soon afterward, the Brazilian and German unionists began working together to ensure respect for basic labor and human rights in Brazil. The German labor movement, like many European labor movements, had socialist roots with an internationalist orientation. At the same time, the post–World War II system involved codetermination in which employees and union representatives sit on the supervisory boards of corporations, are given access to corporate financial data, and participate in strategic business decisions, including those that involve new domestic and foreign investments. Works councils were also a core component of the system, where employee voice was extended to the workplace (Turner 1991, 91–103). In some ways, the system of codetermination made transnational labor solidarity a difficult task. After all, how could you join with workers around the world to fight capital at the same time that you were in a partnership to defend a German firm? But the situation was more complex in practice. German unionists never entirely lost aspects of their socialistic identity, which historically provided them with an internationalist orientation. Indeed, many of the international labor federations prior to World War I were based in Germany (Hanagan 2000). And social partnerships within Germany later provided the institutional framework for regional and international exchanges via works councils and international framework agreements (IFAs). It is not coincidental that the transnational collaboration between Brazil and Germany was not initially established around the more divisive issues of job protection or the more challenging issue of transnational negotiations. Rather, the unionists began working together on human rights because this

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was most pressing in Brazil at the time. It was also an easier issue around which to unify and coordinate action. Joining forces around issues of human dignity, after all, was a less potentially controversial issue than coordinating actions to determine whether jobs should stay in Germany or move to Brazil. Yet, in the process of working together around human rights issues, the Brazilians and Germans developed the groundwork and the trust for facing future challenges together. Later, in the 1990s and early years of the new millennium, the Germans developed institutional ties to workers in countries where large German firms operated, including Brazil, as a watered-down version of the works council system expanded to the European and then the global level. That is, the institutionalization of codetermination through international works councils facilitated transnational communication and coordination.17 German unionists would, in fact, use their transnational ties to their Brazilians colleagues to help the Brazilians develop their own authentic system of workplace representation and voice. In the early 1980s, when Volkswagen factories in Brazil were under military control, the local management attempted to create a works council system that would be controlled by Volkswagen. It proposed that only 50 percent of the members of a works council could be unionists (Barbosa 2001b). The Brazilian unionists contacted their German counterparts, and they explained what the company was proposing. This led to a visit by German unionists to Brazil in September 1982. Upon returning home, German unionists demanded that the company accept “a legitimate system of representation in Brazil” (Barbosa 2001b). Two weeks later, the impasse in the negotiations was broken. According to the leader of the Volkswagen works council in Brazil, Mario Barbosa, “the active support of the IG Metall [German metalworkers’ union] and the Volkswagen committee members of Germany . . . was decisive in allowing us to achieve this important conquest” (Barbosa 2001a, 4). Thus, as in El Salvador, authoritarian rule created a humanitarian concern that led to transnational solidarity activities in defense of human rights. However, in Brazil, the relationship became more sustained and institutionalized as a TLN that deepened with time. A few years later, in 1984, a delegation of Brazilian unionists working for Volkswagen spent seventeen days in Germany as part of an exchange program where they met with IG-Metall and works council representatives.

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João Batista Cavalcente, the coordinator of the Brazilian Volkswagen factory commission and member of the delegation to Germany, reported on their experiences: In Germany, . . . even though their salaries are much different than our salaries, they are still facing serious problems just like we are in São Bernardo. They are struggling against automation, unemployment, and crisis just like we are. Their struggle is at a higher level. But if they have more achievements it is because they have been struggling for a longer period of time.18

This suggests that these exchanges—while revealing differences—also highlighted common problems, and generated a sense of common struggle and identity. The trip to Germany was followed by trips by German unionists to Brazil in 1986 and 1987. With the support of German unionists, the Brazilian Volkswagen workers achieved the right to strategic technical information such as investment decisions, which was a breakthrough for the union because it allowed for the development of better-informed strategies. Labor relations at the Volkswagen plant in São Bernardo were relatively harmonious for much of the 1990s, especially in comparison with the Ford plant. Yet the situation began to change following the Asian financial crisis, in which overheated Asian economies faced a dramatic pullout of foreign financial investment. Investor fears spread to Brazil. Responding to a downturn in sales, Volkswagen proposed to the union that the firm could save money in Brazil by implementing a shorter and more flexible workweek (known as the “Volkswagen Week”). The union agreed to the proposal, but on a temporary basis. In 2001, as the company’s financial concerns continued, it sought to extend the Volkswagen Week. This time the union resisted. The company responded by saying that, since the union rejected its offer, it would have to cut working hours and pay by 15 percent. The union rejected this proposal, arguing that the crisis did not appear serious enough to merit such an action. The Brazilian government became involved in the labor conflict when the minister of labor, Francisco Dornelles, criticized the union for rejecting the company’s proposal. To get the union closer to the company’s position, Uwe Ernst Kraus, the executive director of Volkswagen-Brazil, explained to me, “We had to

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create an important event” (Kraus 2002). In November 2001, Volkswagen announced that it would dismiss 3,075 of its 16,000 workers at its plant in São Bernardo. Soon afterward, the workers of the plant voted to go on strike. However, the president of the union, Luiz Marinho, realized that a strike was not the most effective labor action when the problem was linked to the overproduction of old models. Marinho knew that the real problem was to get new production orders into the plant to protect jobs, and that the decision where to produce new car models was made in Germany. At a rally in which the workforce voted to go on strike, the union president asked for and received authorization to go to Germany to negotiate directly with the top management of Volkswagen. Accompanying Marinho was Mario Barbosa, the head of the Volkswagen-Brazil works council. Barbosa, who studied German through courses offered by the company, spoke the language fluently. In Wolfsburg, Marinho made use of his negotiating skills in sessions that lasted up to twelve hours. Management realized that Marinho had very strong support from his base, which he frequently consulted. This strengthened the union’s bargaining power. But the company held its ground, most importantly on the need to institutionalize the Volkswagen Week. After several days of negotiations, it was agreed that some workers would receive paid leave and might be allowed to return to work later. Other workers would be let go for underperformance, and 1,500 workers would go back to work immediately. To make this possible, Volkswagen agreed to provide a new production model to the plant and a job-stability clause. The union’s concession to the company was to accept the reactivation of the Volkswagen Week, which accounted for 57.62 percent of the company’s savings. The significance of the agreement and how it was negotiated was emphasized by Mario Barbosa, who noted: “This was the first time in forty-three years that an agreement was made in Germany” (Barbosa 2001b). Unlike the negotiations with Ford where the U.S. union did not participate, German unionists played an active role in assisting the Brazilians during the negotiations, and one German union representative was present during the negotiations. Indeed, the German unionists helped the Brazilian unionists defend their jobs, which can be one of the more difficult issue areas for coordination, given the potential for conflicting interests.

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What this case highlights is that this level of transnational union coordination did not happen quickly. It was the product of more than twenty years of communication, trust building, and solidarity actions around less potentially conflictual issues, such as protesting military intervention in labor conflicts and defending the right of workers to form autonomous factory commissions. Additionally, this case illustrates the importance of the German traditions, structures, and political identities that facilitated the formation of a TLN with the Brazilians.

Mercedes Benz (DaimlerChrysler), São Bernardo The case of Mercedes Benz in São Bernardo displays similar dynamics to that of Volkswagen. In both cases, a left-oriented Brazilian union in a German-owned auto company responded to industrial restructuring by slowly developing a relationship with its German counterparts. But the Mercedes Benz case in some ways goes beyond the Volkswagen case in the level and intensity of coordination among unionists in the two countries. In the 1980s, Brazilian and German unionists held seminars to exchange information and discuss strategies. At times the Germans provided support during strikes, and they sent letters of protest to corporate headquarters to back the demands of the Brazilian unionists (Sanches 2001). When the Mercedes Benz factory commission in Brazil was formed in 1984, Brazilian unionists started having more regular exchanges with members of the Mercedes Benz works council in Germany. In 1992, Mercedes Benz in Brazil informed the unionists that it wanted to introduce teamwork, a practice where small groups of workers share responsibility for production tasks and rewards. The firm noted that teamwork had already been implemented in Germany with the acceptance of the German union and works council. Nevertheless, the Brazilian unionists had their doubts about the proposal. Valter Sanches, the representative for the Brazilian Mercedes Benz works council, requested that the company allow a delegation to go to Germany to gain firsthand knowledge from the German workers about teamwork.19 The company agreed, and the delegation went to Stuttgart in June 1992 where they met with the national works council representatives for Mercedes Benz. A follow-up delegation went in January 1994. The exchange was beneficial as the Brazilians learned that there were many ways to implement

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teamwork. The trick from the union perspective was to ensure that teamwork did not lessen their autonomy as a labor union. According to Ferro and his co-authors: Following these visits, the union adopted the position that teamwork should be conducted in semi-autonomous groups. Furthermore, the implementation of such a system should seek to preserve employment levels, increase investment, reduce working hours from forty-five to forty per week, limit the amount of overtime, revise job structure, and improve training programs.” (Ferro, Fleury, and Fleury 1997, 269)

This led to much more serious negotiations and to the signing of a teamwork agreement in March 1995, in “one of the most complex collective agreements concerning work restructuring signed in Brazil” (ibid.). Valter Sanches explains: “The exchanges with the German unions were extremely important. We compared notes on what the company was planning on doing and how the union could respond. Our main argument was that all changes should be negotiated. With the German unionists, we exchanged documents and copies of agreements. We made many trips to Germany, and the German unionists came to Brazil” (Sanches 2001). The communication with the Germans through the works council structure allowed the Brazilians to adequately respond to increasingly complex issues. In 2000, following the merger of DaimlerBenz with Chrysler to form DaimlerChrysler,20 management attempted to dismiss a group of temporary workers in São Bernardo. The union went on strike in response. The company attempted to make up for the loss in production due to the strike by requesting that employees in Stuttgart work a Saturday shift. But after the German unionists learned of the plan by communications through the works council structure, they refused to do the Saturday shift, which saved the jobs of Brazilian workers. Similarly, when South African workers for DaimlerChrysler went on strike in 2001, the company attempted to make up for lost production by increasing exports from Brazil and Germany. But when the unionists and works councils in these countries realized what the company was doing, they forwent the opportunity to earn extra money through overtime and thereby supported the striking workers. Brazilian workers were also willing to strike on behalf of their German colleagues. In May 2002, when German metalworkers were on strike, their Brazilian counterparts organized

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TABLE 5.1 Brazil: Transnational labor activities by factory (1980–2009) Dense, sustained exchanges with foreign unionists

Transnational negotiations without foreign union support

Ford, São Bernardo

√

√

Ford, Bahia

√

Volkswagen, São Bernardo

√

DaimlerChrysler, São Bernardo

√

Factory

Transnational negotiations with foreign union support

Transnational solidarity strikes

√ √

Source: Author’s interviews, Brazil, 2002, 2005, 2009

a half-hour solidarity strike, and they voted not to increase production that could be shipped to Germany and harm the IG Metall´s strike. The Mercedes Benz/DaimlerChrysler case illustrates an example of sustained and developed transnational labor solidarity. It took two decades of working together to slowly develop the trust and shared understanding that later allowed the unionists to participate in solidarity strikes. It also included overcoming language barriers. Like at Volkswagen, the unionists in the Mercedes Benz/DaimlerChrysler factory in São Bernardo participated not only in transnational information exchange, they in fact had developed a transnational labor network. Through this TLN they participated in a solidarity strike on behalf of unionists in Germany. And similar to the Volkswagen case, the Mercedes Benz workers were able to develop a long-term relationship with their German counterparts based on a dense exchange of information and horizontal relationships built on shared goals and mutual trust. A summary of the actions taken by left unionists in these four auto cases is provided in table 5.1.

Institutionalized Internationalism and Corporate Campaign Strategies World Worker Councils and International Framework Agreements Moving beyond bi-national cooperation, the next big step for auto internationalism involved world worker councils and international framework

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agreements that linked all workers and unionists in the same firm. The process began in 1994 when the European Union enacted the European Works Councils Directive, which called for companies with one thousand or more workers and at least 150 employees in two or more E.U. member states to establish European-level works councils. Several years later, MNCs began voluntarily expanding the consultation process beyond the European Union to the global level, although power afforded labor in these international structures was more limited than in the corresponding national structures. Some scholars argue that the councils may do no more than provide national unions with a tool to defend local interests at the expense of international solidarity (Hancké 2000). Yet, others argue that they have produced positive results for labor in large corporations, particularly in the auto sector (Da Costa and Rehfeldt 2006). For left unionists in Brazil, the question was not whether these structures were inherently good or bad, but rather how the unionists could use the structures to achieve the best result possible. In 1999, Volkswagen established a “World Group Council.” Some 80 percent of Volkswagen’s employees worldwide were unionized at the time of the council’s formation. This meant that there was already an independent voice at the VW work centers in addition to well-functioning national works councils. The Brazilian unionists were clear regarding what could and what could not be achieved through this new structure. As Mario Barbosa observes: “It is a space to share information; it is not a space to negotiate. But it is important because local actions are stronger when you have a global vision” (Barbosa 2001b). At the same time, the World Group Council also established an institutionalized and periodic exchange among worker representatives that was paid for by the company. By the MNCs bringing these workers together once a year to discuss company policies and technical issues, a space was also created where the workers could get to know each other, share experiences, and discuss common strategies for dealing with the company. As a result of these exchanges, the workers’ group was able to present a proposal (for which it won approval) that when there was a labor conflict at a Volkswagen plant, the company could not increase production at another Volkswagen plant elsewhere in the world. This was no small feat; it effectively removed from the company one common strategy for weakening labor’s bargaining power in the global economy.

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Three years later, DaimlerChrysler followed the lead of Volkswagen and established a World Employee Committee (WEC) in 2002. The agreement covered 372,500 workers. Later that same year, in October 2002, worker representatives used the WEC to launch a coordinated campaign that prevented the closure of plants in Windsor, Canada, Juiz de Fora, Brazil, and Ludwigsfelde, Germany (Sanches 2003). With the assistance of the International Metalworkers’ Federation, the world worker councils of Volkswagen and DaimlerChrysler opened the door to yet another international mechanism for addressing labor’s demands at a global level: the signing of international framework agreements (IFAs) by global union federations and these multinational corporations. IFAs are often similar in structure and content to the apparel industry codes of conduct discussed in chapter 4, in that they are relatively short documents (three to four pages in length) in which the company agrees to respect basic labor rights, ranging from discrimination to child labor and proper health and safety at work. Yet there are several fundamental differences between IFAs and codes of conduct. First, IFAs are negotiated agreements between labor unions and management, whereas most codes of conduct are unilaterally established by apparel corporations. Second, while many codes and monitoring systems are weak on freedom of association and collective bargaining, this is perhaps the most fundamental point of IFAs. For example, the DaimlerChrysler IFA includes a union neutrality clause, meaning the company will not actively campaign against unionization. Finally, while codes may be monitored by corporate or professional monitors, IFAs involve unions in their implementation. The language of IFAs regarding suppliers can be weak. For example, the DaimlerChrysler IFA states, “DaimlerChrysler supports and encourages its suppliers to introduce and implement equivalent principles in their own company.”21 The Volkswagen IFA similarly states that it “supports and expressively encourages its contractors to take this declaration into account.”22 That is, these IFAs do not require supplier compliance with IFA standards. However, when unions are sufficiently strong and well informed, even weak language can be used to their advantage. For Valter Sanches, “IFAs can be a good tool, if you know how to use them” (Sanches 2005). Indeed, Sanches has found it possible to use the IFA to pressure DaimlerChrysler into ensuring respect for labor rights in suppliers. In one case, a supplier contract was temporarily suspended when the union at the assembly plant refused to allow trucks to deliver parts

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from that supplier based on its violation of labor rights (Sanches 2009). After the union showed that it was willing and able to strike to enforce the terms of the IFA, the company understood the power of the union. “Now a phone call can resolve a problem,” Sanches explains (Sanches 2009). Internationally, in the first three years of the DaimlerChrysler agreement, there have been fifteen offenders, which included not only countries like Brazil, Turkey, and Costa Rica, but also the United States and Germany. In most cases, unjustly fired workers won reinstatement (Greer and Hauptmeier 2008, 83). By 2007, international framework agreements in the auto assembly sector included Volkswagen (2002), DaimlerChrysler (2002), Renault (2004), BMW (2005), and PSA Peugeot Citroën (2006). Notably, all these IFAs have been signed by German and French auto MNCs, and all but BMW have assembly plants in Brazil. U.S. auto companies, which have resisted works council structures, have also resisted signing IFAs. And IFAs were certainly not an option for most apparel firms in Latin America, which were separated from MNCs by webs of outsourcing and subcontracting, and tended not to be European.23

Retargeting the State: Labor Strategies and the Lula Government In January 2003, Luiz Inácio Lula da Silva, an ex-union leader and founding member of the CUT, became the president of Brazil as part of a wave of electoral success for left-of-center candidates in the region. For union leaders of the CUT, who supported Lula during his campaign, the hope was that he would provide a more accessible and worker-friendly government. The argument I presented earlier in this book—that transnational activism was inversely related to favorable state institutions—would suggest that a strong labor government might provide an effective domestic means to resolve labor’s demands. The logic would follow that, after the election of Lula, left unions in Brazil would not have to rely on TLNs to organize factory, corporate, and industry-wide campaigns. Is this what happened? To answer this question requires an exploration of what Lula did and did not do for labor during his presidency. Initially left labor unions hoped for the reactivation of the sectoral chambers. As noted earlier, the chambers had proven successful in the

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early 1990s. Yet Lula seemed unreceptive to their reactivation. He felt that the sectoral chambers had served their purpose a decade earlier, but that now, as the auto sector was doing well, there was no need to reestablish them.24 Unionists then turned to another approach: to attempt to significantly reform the country’s old corporatist labor laws. The Lula government was receptive to the idea of labor law reform. And, in some regards, this was more important than the reactivation of sectoral chambers in that a reformed labor code could potentially affect a much larger segment of the workforce. Rather than pursue the reforms via the traditional political process in 2003 the Lula administration established a tripartite structure, the National Labor Forum, which was opened to all major labor organizations and employers’ associations. The Forum spent a year discussing and debating the reforms, including a discussion regarding whether the Brazilian government should ratify the International Labour Organization’s core convention on trade union rights, Convention 87. From the beginning, the Forum was filled with debate, which was fraught not only with divisions between employers and labor, but also with divisions within the labor movement (Zylberstajn 2006). Employers wanted to first change individual employment laws in order to reduce costs, whereas labor was more interested in reforming the collective labor laws, which affected labor unions.25 Labor unions, for their part, were divided on whether to reform the “union exclusivity” rule under which there is only one union allowed per sector and per territory. It was a “first come, first serve” system. The problem with this law was that some unions had gained representation rights a long time ago and only represented a handful of workers. The law prevented other unions from stepping in to more effectively represent the workers. This divide cut across labor centers, with some supporting the changes and others opposing them depending on how they thought they’d be affected.26 It also cut across unions within labor centers. For example, a relatively small, more radical segment of the CUT opposed the changes (Zylberstajn 2006). A compromise was reached in the Forum where changes would take place over three years and only affect unions that did not represent at least 20 percent of the workforce.27 This satisfied Union Force, while the third largest national labor center in the country, the General Confederation of Workers (CGT), left the Forum over this issue (Zylberstajn 2006).

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Other important aspects of the proposed reform included an end to the union tax and the implementation of a strictly dues-based membership system; establishment of industry-wide unions, which in theory would expand collective bargaining to a national level; and union representation inside the factory. But the passage of the labor law reforms in Congress was plagued by poor timing and conflicting priorities. When the Forum came up with its draft proposal, the Lula government was caught up in a major corruption scandal and Congress was too busy establishing anti-corruption commissions to concern itself with labor reform. The following year was a reelection year, and again labor reforms did not make it onto the agenda. Political opposition to the reforms was also strong. Lula’s Workers’ Party (PT) fell far short of a simple majority in Congress and all the major opposition parties were against the reforms, especially when the employers’ associations distanced themselves from the reforms after the Lula government resolved several impasses by siding with the workers’ position (Felício 2005). At the same time, the more radical segments of the PT also opposed the reforms along the same lines as the radical groups within the CUT (Zylberstajn 2006). In sum, despite lengthy debates and politically maneuvering, Brazil, at this writing, does not have a new labor code. The Lula administration did achieve legislation that allows for the legalization of national union centers, such as CUT and Union Force (Hall 2009). The Lula administration also increased resources dedicated to the area of labor law enforcement. Under previous administrations (from 1990 to 2002), the number of workplaces inspected had dropped from 414,875 to 304,254, while the number of inspectors per hundred thousand workers declined from 5.61 to 3.63 (IDB 2003). When President Lula da Silva took office, he increased state resources dedicated to labor law enforcement, and the number of workers benefiting from Ministry of Labor inspection rose from nineteen million in 2002 (the last year of the Cardoso administration) to thirty-one million in 2008 (Anner 2008). In sum, the government of this ex-union leader has made some improvements in terms of social policy and labor law enforcement, but has otherwise been unable to dramatically alter Brazil’s state institutions to favor labor. For the left union activists, having a labor-friendly president increased their access to the state. But the labor relations system, which favored decentralized, municipal-based unions, remained inadequate in the face of global economic restructuring. As a result, TLNs and their

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multiple targets continued to be an important strategic response for left unionists.

Conclusion Like apparel workers in Central America, auto workers in Brazil have found that the restructuring of their global production networks in the 1990s have forced a dramatic rethinking of labor strategies. And like the left-oriented apparel unionists, left Brazilian auto unionists have increasingly turned to transnationalism to complement domestic strategies. Yet auto worker transnationalism focused on the key nodes of power in the auto global commodity chain: the large, multinational auto producers. Unlike apparel where retailers exerted control down the supply chain, companies in the auto sector like Volkswagen and Ford maintained control. Variation in industry structure shapes the form of auto sector transnationalism in other ways. First, when transnational alliances are established, they tend to be with autoworkers in other countries who can assist Brazilian unionists in pressuring the headquarters of an auto firm, and not with NGO activists who can pressure retailers as in apparel. Second, while the average apparel worker may only work for a given apparel factory for two to three years, auto worker job tenure may last decades. This has encouraged some Brazilian union leaders to take the time to learn the language of the parent auto company, be that German or English. Overall, transnational relationships among unionists are much more sustained and built on a historic sense of trust. As the case studies presented here also illustrate, having the desire to form TLNs may be a necessary condition, but it is not a sufficient condition for creating them. Where the foreign unionists are responsive—as in Germany, Canada and South Africa—TLNs are more likely. But where enthusiasm for cross-border alliances is subdued, perhaps due to different strategic priorities or the lack of a transnational union-to-union structure such as a global works council, TLNs are less likely. This was the case with the United States. The most difficult issue area around which to coordinate transnational labor solidarity is employment. Auto corporations structure their operations so that workers feel that they are competing with each other for a

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limited number of jobs. However, the case of the left unionists suggests that if trust is first built on other issue areas, it is possible for unionists to find common solutions to the employment issue. At times, unionists have been willing to manifest their solidarity by refusing to work overtime when a factory in another country was on strike, or even by organizing short solidarity strikes. Like the apparel workers, transnationalism among left auto unionists engages several targets. Some of the most effective transnational auto activities targeted specific factories, resulting in gains from stronger works councils to job protection. The formation of world worker councils and the subsequent negotiation of international framework agreements resulted in further gains for unionists in European corporations. These processes have allowed unionists to build closer ties and, in at least one case, have resulted in the termination of a supplier’s contract due to its violations of labor rights, while in other cases unfairly dismissed workers were rehired. Targeting and engaging the state in Brazil produced some results, particularly during the auto sectoral chamber of the early 1990s. The election of the Lula government provided labor with a crucial political ally in the state and resulted in increased funds for labor law enforcement, but it has not, at this writing, resulted in significant labor law reforms. Dramatic prolabor state transformation is certainly no easy affair, and, given the depth of global economic integration, most left labor unions seem convinced that some form of TLNs will remain relevant for the foreseeable future.

6

Microcorporatism in Argentine and Brazilian Auto Plants

“International labor solidarity is difficult due to competition over jobs. The solution is to work things out locally [through] citizen unionism,” a leader of Brazil’s moderate metalworkers’ union explained to me one afternoon in his São Paulo office. Citizen unionism is made possible by agreements with employers that allow for generous social projects. Global union federations, the leader added, “don’t do anything; they can’t be trusted.”

In Brazil there are two prominent auto union organizations, facing the same state structures and the same challenges of international industrial restructuring and economic crises. Yet their strategies could not be more different. As we saw in the previous chapter, for the left, economic globalization increased the likelihood of international labor solidarity. In this chapter I will explore how moderate unionists remained highly distrustful of cross-border collaboration with labor in other countries. Local solutions, “citizen unionism,” and forms of domestic cross-class collaboration were their answers to the challenges. Contrast between left and moderate unionists could be found elsewhere in South America. And differences in strategies often reflect smaller, everyday differences in how unionists interact with each other and outsiders. During one trip to Argentina, I spent a day visiting the left-oriented Argentine Workers’ Center (CTA). During my visit to their office, its informal, nonhierarchical style came through immediately. We spent the afternoon sharing maté and union stories. The labor center had been involved in

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countless radical events protesting the economic measures of the government. The president walked in later, sat on top of the desk, and casually joined the conversation. But I soon learned that the CTA did not have any strong union representation in the auto sector. They said their good-byes to me with hugs and kisses, and I was on my way. The next day I visited the office building of the SMATA autoworkers’ union, a moderate union tied to the official CGT labor center. The SMATA and CTA offices were within walking distance of each other, but culturally they could have been on opposite sides of the continent. When I arrived at the SMATA office building, a security guard asked me to wait on the ground-floor lobby area to allow time for the guard to confirm the meeting. I was then told that the meeting was confirmed, but that I needed to wait for someone to escort me up to the union leader’s office. I was then taken up several floors in an elevator and shown into a room where a secretary greeted me. After an additional wait, she escorted me into the official’s office. It was a large room that was decorated with photos and union plaques, and furnished with a large meeting table and a new television. The leader sat behind a beautiful wooden executive desk and invited me to sit on the other side to begin the discussion. The silence in the room was impressive. Indeed, as we began to talk, the gentle hum of his computer proved to be a disturbance, and he decided to shut it off. He then politely and thoroughly answered all my questions about the union and how it negotiated with management locally to address issues related to restructuring. When I asked about international labor solidarity, his response was succinct: “International relations are very important for learning about conditions elsewhere. International solidarity is what is difficult.” Like the moderate Brazilian unionists, the Argentines were unlikely to trust foreign unionists. But this did not mean that they refused to join international organizations or go to international conferences. Those activities are useful to gain information for more effective local strategies. The meeting ended soon afterward with a short, firm handshake. Moderate auto unionism in South America has its roots in the corporatist and populist era that began in the 1930s and 1940s there, where class collaboration was favored over class conflict. Industrialization and labor’s greater access to the institutional political process served to strengthen the collaborative union tendency for much of the twentieth century. National

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corporatist arrangements entered into disfavor with foreign investors and national governments in the 1990s and early twenty-first century as they came to prefer market-oriented reforms and industrial restructuring, not social consultation. Yet, new forms of cross-class collaboration emerged in the sector at the plant level in a form of microcorporatism, as we will see in the cases of Brazil and Argentina that follow.

Moderate Auto Unionism in Brazil Brazilian autoworkers organized in the Metalworkers Union of São Paulo (SMSP) developed a moderate form of unionism that embraced workplace flexibility in the late 1980s and especially in the 1990s and early years of the new millennium. The union was formed in 1932 under the tutelage of the Vargas regime, which established a system of national, state-centric corporatism in Brazil. By the mid-1940s, SMSP had become more independent and combative. Democratization and legalization of the Communist Party provided a boost for left organizers throughout the country and within the SMSP (French 1992). Yet the experience with militant unionism would not last. The military coup d’état of 1964 put an end to progressive influences within the union as the military intervened and removed its leadership and its communist members. A year later, a unionist with ties to the Ministry of Labor and the military government, Joaquim dos Santos Andrade (nicknamed Joaquinzão), became the union’s new president in an election in which he ran unopposed. Joaquinzão held the position for the next twenty-two years (Nogueira 1997).1 In the midst of a large general strike in 1983, Joaquinzão engaged in discussions with the president of Brazil when most unionists were shunning such meetings. The slow process of democratization in the 1980s allowed the union to justify its moderate form of unionism because, the unionists argued, it was no longer necessary to be confrontational. When more radical unions formed the CUT in 1983, Joaquinzão and his group chose not to join. They argued that they wanted changes, but did not want conflicts with the state and capital (Nogueira 1997, 141). Their goal was to find a place within the capitalist status quo, not to radically transform it.

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By 1987 these union leaders began to call their vision sindicalismo de resultados (“results-oriented unionism”) and Luís Antônio de Medeiros replaced Joaquinzão as the leader of the union. Medeiros, who had been a militant in the Communist Party, took the union in an even more conservative direction. He argued that the union should be apolitical and nonpartisan at the same time that he supported neoliberal economic policies. This was a new form of moderate unionism that reflected the changing economic context in the country. As Brazil moved from a model of national developmentalism to neoliberal market-oriented reforms, these unionists believed in the need to shift from state-supported corporatist unions to flexible “modern” unions that worked within the market system (Força Sindical 1993). For Medeiros, the state should stay out of labor relations to allow workers to negotiate with capital without interference. In 1991, Medeiros took his vision of a new, flexible, antistatist unionism to a broader level as he joined with other like-minded unionists to form a new national labor center, Força Sindical (Union Force). In its Letter of Principles presented at its founding congress, Union Force called for “independent, pluralist, democratic, and nonpartisan unionism that fights to put an end to the corporatist union structure” (Força Sindical 1991, 39). In declarations made since the congress, Union Force has stated, “[Labor market] flexibility is essential for the country” (Força Sindical 2000). Indeed, Union Force supported several market-oriented labor reforms (Graciolli 1999). For example, it supported a 1998 government provision to increase the use of temporary work contracts. Normally unions fight for permanent employment arrangements, which provide workers with job stability and offer unions a stable membership. In the ceremony celebrating the passage of the legislation, President Cardoso praised the Union Force initiative while criticizing the left-oriented CUT for its unwillingness to collaborate with the government’s market-reform program. At the same time, Union Force rejected the concept of class conflict. It focused on the more immediate economic needs of its members as opposed to more long-term goals of transforming economic structures. Indeed, part of Union Force’s identity is built on presenting itself as something different from the dominant left union labor center (Dos Santos 2001). The orientation appears similar to the moderate apparel unionists in Honduras who worked hard to make sure employers saw them as something different

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from the “radical unions that cause disruptions.” And it also suggests that the strength of the left unions in Brazil might have made this moderate union tendency more appealing to employers.2 The purported “apolitical” nature of this form of unionism is often overstated. Medeiros was an active member of a political party and was elected to the Brazilian Congress. Paulo Pereira da Silva (Paulinho) replaced Medeiros as president of the Metalworker’s Union in 1997 and then became the leader of Union Force. Paulinho had always been deeply involved in partisan politics. Once a member of Lula’s Workers’ Party (PT), in 1996 Paulinho joined the Brazilian Workers’ Party (PTB) and then in 2003 he changed parties again and joined the Democratic Workers’ Party (PDT), with which he won the position of federal deputy in 2007.3

Microcorporatism in Brazil As we saw in chapter 2, the Brazilian auto industry went through a dramatic process of internationalization and restructuring in the 1990s while state structures provided only moderate relief to the challenges created for labor by these economic transformations. As we saw in chapter 5, left unions in Brazil responded to these changes by combining base-level mobilization with transnational labor networks to pursue their demands in this new context. How would the more moderate metalworkers’ unions of Union Force respond to the new challenges? What the following plant- and industry-level case studies suggest is that not only did these unions support management and the state’s flexible work initiatives, but often they proposed them. At the same time, a pattern of left-flank union formation was also present in several cases, particularly in new, modular auto plants. In general, Union Force shunned confrontational actions and transnational alliances. Plant-level collaboration with management did not display the more traditional clientelistic characteristics of the apparel industry, but rather suggested a nascent form of microcorporatism. Microcorporatism is built on collaboration not with national state representatives but rather at the level of individual enterprises and workplaces (Wells 2001). It is not unique to Latin America. Looking at the European context, Marino Regini notes that microcorporatism emerged after the decline of Keynesian politics and industrial restructuring. He argues that

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“forms of more or less institutionalized consensus with the firm came to represent, in many cases, a functional substitute for the macro-national concertation now in progressive decline” (Regini 1995, 72). All unions in the auto sector may succumb to aspects of microcorporatism. For decades auto firms have been pushing for teamwork and employee committees. The European emphasis on works councils and other forms of social partnership is also present, albeit to a lesser degree, in transplants located in South America. But unions with a moderate orientation—who were accustomed to national, state-level collaboration—appear more likely to embrace microcorporatism arrangements while also simultaneously shunning cross-border labor union alliances and other forms of autonomous workers’ power. Of course, this requires these unions to keep their factories open. That is what Brazilian unionists were unable to do at Ford in Ipiranga, a case I will turn to next. Ford-Ipiranga: The Limitations of Local Strategies in the Global Economy One early test for Union Force autoworkers’ response to restructuring involved the Ford Ipiranga plant in São Paulo. The Ipiranga plant, which began functioning in 1953, was Ford’s oldest plant operating in the 1990s in Brazil. By 1999, in the aftermath of the Asian financial crisis, the Brazilian auto sector faced a dramatic drop in sales. Ford began cutting jobs in São Paulo and São Bernardo, and while the left-oriented CUT unionists in São Bernardo organized protests and plant occupations, Union Force unionists representing the Ford workers in São Paulo were more inclined to focus on negotiating severance pay and related issues.4 The Union Force unions did participate in some limited protest events.5 But the pressure to close the old Ford plant was overwhelming, and SMSP completed the negotiations process and the Ford Ipiranga plant shut down. A representative of Union Force explained to me: “There was nothing left to do. We did not seek to develop alliances and pressure Ford [headquarters in the United States]. There were no international negotiations. We just negotiated the closing locally.”6 It was a pattern that Union Force would repeat elsewhere in what Adalberto Cardoso labeled pragamatismo impossível (impossible pragmatism). As Cardoso predicted, by negotiating plant closures before pursuing an aggressive national and international strategy and by supporting government

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market oriented reforms, this form of pragmatism would eventually come back to hurt Union Force, as the economic policies it supported ultimately reduced its union base (Cardoso 1992). But Union Force was about to find new members in the auto industry’s new modular production facilities. How it would come to represent those workers reflects not only pragmatism, but also the benefit of radical flank mechanisms. General Motors, Porto Alegre: The Auto Sector’s Radical Flank With the closing of Ipiranga, Union Force lost an important union at one of the countries older auto plants. But Union Force had already begun organizing the new modular auto plants that were established outside the industrial greater São Paulo region. Its ability to form unions was dependent on the Brazilian labor laws and the desire of some auto companies’ to avoid unionization by the left. According to Brazilian law, unions are formed regionally and not on a plant-by-plant basis. As a result, a union could legalize a metalworkers’ local with any metalworkers in municipalities where an auto corporation was building a new facility, and would be automatically granted the right to represent all the metalworkers in that municipal region. That is, without having to organize a campaign or even taking the time to talk with the workers, the municipal metalworkers’ union would represent the auto production workers in the new auto plant. Union Force had established a metalworkers’ union in Curitiba, Paraná, prior to the restructuring of the 1990s and early years of the new millennium. Thus, when Renault / Nissan, Volvo, and Volkswagen /Audi established plants in the region in the late 1990s, production workers at these plants were automatically represented by Union Force. In Gravataí, where General Motors was building a new plant, there was some ambiguity in who should represent the workforce. As we saw in chapter 2, this is one of GM’s most modern facilities and relies on a system of modular production. The CUT-affiliated metalworkers’ union of Porto Alegre could represent all metalworkers in the Porto Alegre area. But if a union was formed at a subregional scale in the small municipality of Gravataí, then the smaller, new union could argue that it had the right to represent the GM production workers. As it was, Union Force did establish a union in Gravataí, and the company and the government were faced with two options: recognize the large, established, left-oriented union of the CUT, or recognize the new, small,

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nonconfrontational union of Union Force. Indeed, Union Force was able to present itself to management and the local government as a moderate alternative to the local left-oriented CUT metalworkers’ union. It won the favor of the factory management, which preferred moderate unions (which were presumably less disruptive and demanding) to the left unions. In July 2002, the CUT metalworkers’ union began a strike to protest conditions and to gain representation rights, but a local judge ruled that union could not continue the strike because it did not legally represent the workers. The CUT union responded by releasing documents to the press that indicated that GM management had pressured the government to accept the Union Force union. The CUT unionists argued that the documents showed that GM had made direct payments to the Union Force union, thereby providing it with the necessary financial resources to ensure its survival until the court issued its decision. Despite the arguments and documents presented by the CUT union, the local courts ruled in favor of the Union Force union, and they allowed it to represent workers at the plant.7 Thus Union Force was able to gain representation rights not by using strike activity, community support, NGO alliances, or transnational pressure, but by relying on its good relationship with the government and its ability to present itself as a moderate alternative to the more radical CUT union in order to gain management’s favor. While General Motors appeared to be working to ensure that the Union Force union was able to represent workers in the plant, it acknowledged that about 2 percent of the workers had chosen to affiliate with the Union Force union.8 This is an astonishingly low rate of unionization for an auto plant. The strategy of establishing good relations with employers and the state helped Union Force to achieve legal recognition of its union, but it did little to build Union Force’s membership base, at least in this case. But how did Union Force use its representation rights once it was established inside a factory? That is, what sort of unionism resulted from an auto sector radical flank? The next case provides some indication of microcorporatist unionism, or plant-level collaboration between labor leaders and managers in Brazil. Volkswagen, Resende: Nascent Microcorporatism The Volkswagen truck plant in Resende, Rio de Janeiro, provides another example of moderate

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unionism in the Brazilian auto sector. As seen in chapter 2, Resende is an extreme example of modular production. There are no Volkswagen employees directly involved in the production process. Volkswagen employees only participate in the final quality inspection process of the vehicles. Seven independent firms, which are located inside of the plant, assemble the components and the vehicles. As in other cases, unionization was not the result of a concerted union drive by the Union Force to organize the Volkswagen plant. Rather, it was the ability to form a general metalworkers’ union in a region that included the Volkswagen plant. The union represented Volkswagen and modular production workers, who are defined occupationally as “metalworkers.” Its leaders proved willing to work with management and embraced flexible work rules. Indeed, one VW manager told me that the willingness of Union Force leaders to embrace management’s flexibility initiatives was so quick and unquestioning that at times it created problems because the union leaders had limited ability to convince the workforce that the agreements they were signing were in the workers’ best interests. Often union members voted against proposals that the leadership had accepted.9 In one case, a top manager told me that a Union Force union leader said he would accept Volkswagen’s proposal to allow for a more flexible workweek in exchange for payments into his personal bank accounts.10 It seems that for at least this one auto unionist—just like for some apparel unionists in El Salvador—one strategic response to globalization is to gain financial reward in exchange for embracing, rather than fighting, market-oriented restructuring.11 Yet the plant-level dynamics were also influenced by national-level dynamics of a different nature that gave the left CUT unionists some influence in the factory. In 1999, Volkswagen signed an agreement that allowed for the formation of factory commissions in all of its factories in Brazil. This was particularly important in new factories like the one in Resende, which did not have a functioning factory commission. Given that the work of the national Volkswagen factory commission was led by a member of the CUT, the rank-and-file members of the Union Force union in Resende came in regular contact with this left union representative. The effects of this influence were apparent during my visit to the Resende factory commission’s office. The walls were adorned with CUT posters and photos of Lula. As I spoke with one delegate I noticed that

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another was reading the CUT metalworkers’ monthly newsletter online. What I learned talking with the labor delegates was that the Resende factory commission members were sympathetic to the CUT even though their union was affiliated with Union Force. One commission representative explained to me: “The CUT expresses more solidarity with us. That is, it is closer to the workers than the Union Force union. It keeps us better informed. We would hear from the Union Force union only once every two months.”12 When I discussed this union dynamic with a local Volkswagen manager, he noted: “The CUT is very concerned about conditions of workers inside the factory. It has good communications with the workers. But it has a stronger ideological orientation. Union Force is more flexible. It gives in earlier” (Couto 2002). So while the manager seemed to admire the communication skills of the left unionists, at the end of the day he preferred the “flexible” unionists because they tend to give in earlier. The Union Force union used its more flexible approach to develop an ongoing relationship with management in a nascent form of microcorporatism involving close collaboration with management at the plant level. The problem for the union was not its relationship with management. The union’s problem was its relationship with the workforce. Indeed, the factory commission structure gave the CUT more influence over the baselevel workforce than the Union Force union that formally represented it. Union Force’s strategy afforded it legal representation but not stable membership support. And, as in other cases of collaborative unionism at Ford in Ipiranga and General Motors in Porto Alegre, the union that represented the workers at Volkswagen’s Resende plant shunned transnational labor alliances and attempted to build a favorable relationship with management at the plant level by embracing management’s flexibility proposals. The dynamics in the factory eventually led to a vote by union members to disaffiliate with the moderate labor center and to establish an affiliation with the CUT metalworkers’ union in the region (Sanches 2005).

Moderate Auto Unionism and the Brazilian State Union Force metalworkers’ unions had almost no international strategy. They were members of the International Metalworkers’ Federation (IMF), but they did not pay their dues for years. They never pursued transnational campaigns to protect jobs, nor did they send union leaders abroad

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to negotiate directly with an MNC headquarters (Pinto 2002). At the same time, Union Force did not work to build strong base-level organizations such as factory commissions. For one union activist, the two phenomena are linked: “The problem is that the union is not in the workplace so the union doesn’t feel the pressure from the workers to resolve their problems [by using strikes and international strategies].”13 However, Union Force did provide its members with numerous programs for job training and employment placement, low-income housing, and worker vacations. These programs were important for many union families. They also sought the favor of national governments. As noted, during the Cardoso government (1995–2002), Union Force embraced the government’s neoliberal program, including privatization and labor-market flexibility. As a result, Union Force won the Cardoso government’s support and funding for numerous social programs. In 2003, with the start of the presidency of Luiz Inácio Lula da Silva, Union Force found itself for the first time not enjoying close relations with the government, while its largest rival labor center, the CUT, did enjoy such a relationship. Union Force would take to the streets and protest the Lula government on issues such as job creation. But this role of “opposition” labor center was short-lived. Many Union Force members had sympathies with the Lula government, and some Union Force unions quit the organization to join the CUT and be closer to the government (Galvão 2006). By Lula’s second term, which began in 2007, the governing Workers’ Party reached an agreement with the Democratic Labor Party (PDT). In exchange for the party’s support, party leader Carlos Roberto Lupi was named the new minister of labor. Lupi had once been a member of Union Force, an organization to which he maintained close ties. His ministerial post gave Union Force the access to the government that it was lacking, and to which it had grown accustomed in previous administrations. Thus, Union Force’s collaborative approach continued to extend into state structures. It was an approach which the Argentine auto unionists had mastered decades earlier, as we will see next.

Moderate Auto Unionism in Argentina Moderate auto unionism in Argentina has its roots in the official unionism of the General Confederation of Labor (CGT), which developed its

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union identity during the populist era of Juan Perón. By the early twentyfirst century, the most important Peronist union with a presence in the auto sector was the Automotive Union of Mechanics and Related Trades (SMATA). SMATA was originally a relatively small union of mechanics. Under a new leadership in the late 1960s and 1970s, SMATA took advantage of some ambiguities in the Argentine labor law (which normally only allows for one union per economic sector), and began displacing the Union of Metalworkers (UOM) as the main representative of autoworkers. Like SMATA, UOM was a Peronist union that was affiliated with the CGT.14 The man who became the most dominant leader of SMATA, José Rodríguez, was a loyal Peronist who occasionally represented the party in the Argentine Congress. Rodríquez rose to power in the union in the late 1960s, and, following the period of military rule, remained until April 2009 when he was replaced by his assistant general secretary, Mario Manrique. Thus the history of auto unionism in Argentina is one of official unionism with a moderate or status quo political orientation. But there was a brief period when SMATA battled left activists within its ranks, a period that would come back to haunt the SMATA leadership decades later. When Fiat began production in Argentina in the 1960s, it wanted to avoid the bad experience it had had with the strong, national communist unions in Italy. It saw enterprise unionism as a way to isolate problems and break local unions away from their national leadership. Fiat thus insisted on dealing with unions on a plant level in Argentina. But this policy meant that the moderate national leadership of SMATA had less control over its local unions. In the early 1970s, left unionists were elected to the leadership of the local SMATA chapter Córdoba (Corradi, Kenworthy, and Wipfler 1976). This group fought against what they referred to as “the Peronist union bureaucracy” (Pichinini 2002). To address the rise of the left in the auto sector, the Argentine state used the military. Union leaders were “disappeared” by the armed forces (ibid.). Left unionists had gained a presence in the Ford and Mercedes Benz plants outside Buenos Aires, too, but they were often detained, tortured, and at times killed by the military, in some cases allegedly with the complicity of the auto companies. The SMATA leaders did not face the same level of violent repression as the left unionists, but some moderate leaders of SMATA were removed from office when the military seized power in 1976. With the return to

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democracy in 1983, they quickly managed to regain control over the entire union system (Palomino and González 1998, 12). In this strong dispute between the left and the moderate auto unionists, the moderate unions won out in the end (Novick and Catalano 1999, 208). In the 1990s, as the auto sector boomed and once again became strategic, SMATA competed not with left unionists but rather with the Peronist metalworkers’ union, UOM. This time, both unions were members of the official Peronist CGT labor center. The difference between them lay in their tactics. In the new plants, UOM took a traditional and rigid approach to negotiations, whereas SMATA was more flexible. This made a difference when Fiat returned to Argentina in the 1990s. Fiat had left Argentina in the 1970s when one of its managers was killed by leftist guerrillas. As it planned on returning in the 1990s, Fiat wanted to negotiate a flexible collective contract before building a new auto assembly plant. It started negotiations with UOM, but UOM did not accept the flexible proposal Fiat put forth, and the negotiations broke down. When this happened, SMATA saw an opportunity to beat out UOM and represent the Fiat workers; it decided to approach Fiat and offered to accept its flexible work arrangement. Fiat quickly agreed (Battistini 2002). UOM challenged in court SMATA’s right to represent the workers, which gave state representatives a role in the dispute. The government decided the case in such a way that it allowed for a more open interpretation of the law and thus opened the door for SMATA and the auto firms to collaborate on flexible work arrangements. The court ruling had an impact on other auto firms, as Toyota and General Motors were all interested in implementing flexible work hours, multitasking, teamwork, and variable pay schemes (Cárcar 1998, 155–56). What these dynamics illustrate is that SMATA’s ability to represent the workers in Fiat resulted from the confluence of three factors: the company’s preference for a flexible contract, the opportunity presented to SMATA when the UOM union became inflexible in its negotiations with Fiat, and the desire of state representatives to meet the needs and preferences of foreign investors. It was not enough that SMATA was willing to be more flexible than UOM. SMATA also needed the state to intervene on its behalf. At the same time, UOM played the role of the “rigid” threat that allowed for the radical flank type of mechanism used by moderate unions in cases presented earlier.

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Once SMATA showed that it was willing to accept very flexible work rules, General Motors and Toyota approached it to negotiate flexible contracts before they opened their new plants. By the mid-1990s, SMATA had firmly displaced UOM as the largest representative of autoworkers in Argentina.15 While SMATA favored flexibility when negotiating contracts for newly opened plants, it initially stuck to traditional contracts in old plants (Battistini 2000a). Yet, as the economic crisis hit Argentina in the early 2000s, this too would change. Like Union Force in Brazil, SMATA would be characterized by its flexible approach to plant-level negotiations, domestic responses to the challenges presented by international industrial restructuring, and microcorporatist pacts with employers that guaranteed the union’s survival.

SMATA’s Response to Industrial Restructuring Having rid itself of competition first from the left and then from another official union, SMATA responded to industrial restructuring in the auto manufacturing plants by combining firm-level bargaining with national, tripartite negotiations (Novick and Catalano 1999). At the firm level, SMATA put up little resistance to management initiatives for flexible labor relations. Yet it strongly resisted issues such as workforce reduction. Moreover, SMATA did not accept total decentralization of bargaining; the national headquarters of SMATA participated in most firm-level negotiations to ensure some national-level coherence and coordination to the bargaining process.16 That is, when possible, it pursued a form of pattern bargaining. As SMATA’s top negotiator, Manuel Pardo, explained to me, after negotiating an agreement that SMATA liked with one firm, it then used that agreement as a model for the other firms (Pardo 2002). At the national level, SMATA became interested in negotiating tripartite pacts with state representatives and the business sector. In response to rising inflation and declining sales and employment in the late 1980s, SMATA leaders and employers allied to demand state protectionism (Murillo 2001, 190). This led to tripartite negotiations and an agreement in March 1991 in which the government agreed to lower taxes, employers agreed to control sales prices, and the unions agreed to forgo salary increases in exchange for job stability.

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The auto sector agreement was similar to the auto sector pact signed in Brazil via the auto sector chamber. However, unlike Brazil, the Argentine agreement did not follow a period of labor conflict and a failed attempt at transnational labor activism. Instead it was an extension of SMATA’s collaborative orientation. Combined with the government’s stabilization program, which included increased consumer purchasing power via oneto-one currency parity with the U.S. dollar, the auto agreement led to the dramatic reactivation of the sector. Some auto companies returned to Argentina, and those that had remained expanded their production. The 1991 agreement was followed by the 1994 Ouro-Preto Accord, which gave Argentina greater market access in Brazil (Roldán 1999). Once SMATA gained union representation control of the sector, it organized few strikes directed against the auto companies (Guida 2002). In some cases, SMATA was accused of relying on corporate patronage in exchange for accepting management initiatives or for offering labor peace. In the 1990s and early 2000s, collective contracts included clauses in which companies provided direct payment to SMATA’s national office for “union activities.”17 SMATA had no strong ties with NGOs or with national social movements (Palomino and González 1998, 22–26), and it did not pursue transnational labor networks. As the following plant-level cases will illustrate, before the economic crisis of the late 1990s and early 2000s, SMATA’s strategy appeared to work well. Volkswagen, Pacheco: Failed Modularization From the mid-1980s to the mid-1990s, Volkswagen and Ford worked together through a joint venture, Autolatina. The agreement worked when the auto market was stagnant because it allowed the two companies to share resources, but when market conditions improved, the companies ended the agreement. Volkswagen acquired an old truck assembly plant, which it completely restructured into a system that used modular production. Nine independent firms were situated inside the plant and participated in the production process. But labor laws, the strength of the union, and Volkswagen’s poor negotiations with the modular producers eventually made modular production untenable. Argentina’s ultraactividad law—which established the automatic renewal of collective contracts if at least one side did not want to make changes—allowed the union to reject Volkswagen’s attempt to implement

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a flexible labor contract in the factory. And, as Yoguel, Novick, and Marin explain, “[a]n important achievement by SMATA . . . was that workers, whether employed by Volkswagen or not, were to be regulated by the trade union’s agreements. Consequently, wages collected by those who worked for the module or for VW were similar” (Yoguel, Novick, and Marin 2000, 3–4). As a result, the modular producers demanded that Volkswagen increase what it paid them in their production contract to compensate for the higher wages. A plant manager close to the negotiations explained to me that Volkswagen handled the negotiations poorly, meaning that it gave in to too many of the modular producers’ demands.18 As a result, Volkswagen found that subcontracting to independent firms did not reduce production costs. This led the company to reverse its decision to use a modular production system. By 2002, there were no major independent firms inside the plant participating in the production process.19 Thus the shift to modular production was by no means an inevitable or an irreversible process. Certainly the auto corporations were not the only actors with a say in what happened. In this case, the auto unionists effectively made use of the favorable Argentine labor laws to force higher wages throughout the modular system. By doing so, they took away one of the main reasons to shift to modular production: cost reduction. Indeed, as Volkswagen managers noted, having many independent producers inside the same factory can create logistical nightmares and greatly increase the risk of accidents. If these issues are not compensated for by reduced labor costs, then there is no point in remaining wed to the modular model, no matter how successful it might have been elsewhere. Following the financial collapse of 2001, the negotiation skills of the unionists and management were put to the test. Volkswagen decided that it had to eliminate 750 jobs in the Pacheco plant. The union responded with a proposal that included temporary layoffs and early retirement but avoided dismissals. Volkswagen saw this as a provisional solution. In the long term, it wanted to achieve cost savings through flexible employment arrangements. The union used Argentine law to resist many of the changes, but, given the gravity of the crisis and that the union had already accepted flexibility in the new auto plants, SMATA slowly accepted the changes to the work rules. Volkswagen management noted, “The last agreement on [job]

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reductions was very flexible. SMATA accepted a very flexible plan. Few unions would do this.”20 As in the case of Union Force in Brazil, the willingness to accept flexibility won the union the favor of management. For Volkswagen workers, labor transnationalism was limited to institutionalized exchanges through the works council structure. The structure allowed for information exchange, visits by international delegations, and occasional regional and international seminars. One union representative noted that the international exchanges had helped the unionists to negotiate better contracts locally (González 2002). Yet, during the 1990s and the crisis following the economic collapse of 2001, SMATA did not make use of transnational labor networks (TLNs) or negotiations with corporate headquarters to save jobs, much less did it participate in solidarity strikes on behalf of Volkswagen workers in other countries. Their response to global restructuring was based on domestic negotiations and acceptance of flexible work contracts at the plant level. Ford, Pacheco: From Confrontation to Microcorporatism SMATA’s response to restructuring at the Ford plant in Pacheco was similar to its strategy at the Volkswagen plant. Yet labor relations in the Ford plant were historically more conflictual. In the 1970s and 1980s, left unionists controlled the local union. During the military dictatorship (1976–1982), twenty-five unionists were detained and tortured with the alleged complicity of Ford management (CNDP 1984, 379–82).21 In the mid-1980s, left unionists continued to control the local union. In 1985, they organized a strike that lasted for twentyone days. Some three hundred workers were fired and the more conservative national leadership of SMATA regained control over the local union. The director of labor relations at the plant observed, “Since then, there have been no major conflicts with the union” (Oliviero 2002). Yet, as with Volkswagen, SMATA did not immediately accept Ford’s proposal to implement more flexible work arrangements. Instead it used Argentine law to keep a more traditional system of labor relations intact. As a result of this strategy, there was no variable pay or hour bank, and workers received seniority pay.22 Ford reported that this made its labor costs 30 percent higher than the labor costs at its modular factories, which had implemented flexible work arrangements. However, Ford was able to implement multitasking and a reduction in the number of job categories. The director of labor relations for Ford, Ramon Oliviero, explained to me: “Before, if a

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worker’s job description said he should turn the level to the left, it was impossible to also ask him to also turn it to the right. Now that has changed” (Oliviero 2002). Union representatives came to accept the new rules, and they changed their view of their relationship with management in the process. A union delegate at Ford described the changes to me in these terms: “At first, we were very wary of the changes. We didn’t like teamwork. Now we see things differently. Now we are partners with the company.”23 The idea of partnership with the company was a particularly important shift, and reflects at least the beginning of a transition to microcorporatist labor relations practices. While left unions may enter into partnerships of sorts with management through works councils and international framework agreements, they also protest and use TLNs to pressure corporations. Unlike where left-oriented labor unions are active, labor relations at Ford‘s Pacheco plant do not involve base-level mobilization and TLNs. According to one Ford union leader, “We didn’t pursue any [confrontational] actions when workers were dismissed in 1998 to 2002. Each side [union and management] put in something. We agreed to lower benefits in the cafeteria to see how much money that would save.”24 Similar to Union Force, the SMATA unionists working for Ford did not organize strikes or coordinate a transnational campaign or pursue transnational negotiations with Ford headquarters. Like unionists at Volkswagen, unionists in Ford participated in some international exchanges, but exchanges were often organized by Ford with the purpose of training workers to make a new car model or instructing them on how new labor relations practices functioned. The basis of their strategy involved accepting management’s workplace flexibility proposals in exchange for job stability and union survival. It seems that as the unionists’ identity became increasingly intertwined with that of the company, participation in international, class-based alliances that confront the corporation were less likely. GM in Córdoba and Rosario: Winning Hearts, Minds, and Pocketbooks General Motors began production in Argentina in 1925, long before Juan Perón ushered in Argentina’s experiment in populism and party-controlled corporatism. GM remained in the country through decades of economic and political turmoil. However, in the late 1970s, the company terminated its

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operations as the violence escalated and auto plant managers increasingly faced the risk of kidnapping by an urban guerrilla movement. Democratization and market-oriented reforms brought GM back to Argentina in the early 1990s when it began production in Córdoba. Because GM was reinitiating production in Argentina, it was able to negotiate a very flexible labor relations regime for its new factory. It was not constrained by the Argentine labor law that gave precedent to old labor clauses if the union did not want to change them. The SMATA union in Córdoba accepted GM’s proposals for a flexible labor relations contract that allowed for teamwork, flexible working hours regulated according to a yearly total, and multitasking. The hour-bank system was a particularly important source of savings for the company. In traditional contracts, companies were forced to pay workers 100 percent of their pay even when production needs were low and without being able to use their hours as credit for work later. Under the new, flexible system, when production needs were low, workers could be sent home. They received 100 percent of their wages, but the time paid went into the hour bank. The company would then have one and a half years to use the hours. If the company later needed a worker to do overtime, it used one and a half hours from the hour bank for one hour of overtime. Workers also could be suspended when production was low, and they would receive 75 percent of their salaries. A large portion of their salaries was tied to productivity and performance goals. The contract was celebrated by the government and the private sector as a model contract. In a public speech, President Menem held up the contract as exemplary, and the Ministry of Labor copied and distributed it to provide a model to other companies. In 1997, General Motors opened a second factory, in Rosario, and used its Córdoba labor contract as the basis for its Rosario contract. There were some differences between the contracts. For example, the percentage of salaries contingent on production and team goals was lower in the Rosario contract. The reason for this was that as financial conditions worsened, production goals were seldom met. Workers and managers (whose pay was also linked to production) became discontented with the system because the failure to meet production goals was due to the economic crisis in the country and thus to factors entirely outside their control.25 The company sought not only market-oriented labor practices, but also to lessen the perception of differences between production workers and

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management. Everyone ate in the same cafeteria where, “even the president has to wait in line” (Catañy 2002). The U.S. auto firm was also requiring all employees—men and women, top-level managers and production workers, corporate lawyers and custodial staff—to adhere to the same dress code. The new uniform was khaki pants with a blue sports shirt bearing the company’s name. The company’s struggle for the loyalty of their employees began before they put on their khaki pants and sports shirt. General Motors selected relatively young workers (on average, twenty-eight years old compared to forty-one at the traditional auto plants), who typically had at least graduated from high school.26 This meant that many had little prior work experience, and thus no prior union experience. At the same time, their higher educational levels and better job training made them feel like semiprofessionals, an identity the company worked to cultivate. The selection of workers, the common uniforms and eating facilities for production workers and managers, and teamwork all were intended to create a sense of shared identity within the corporation. This had an impact on unionization rates. While at its peak in 1998, 25 percent of the workforce belonged to the union, by 2002 only 16 percent of workers were union members. This is a remarkable contrast to older auto plants in Argentina, where the unionization rate at the time was 95 percent. SMATA still benefited from microcorporatist arrangements through pacts with management. Article 17.1 of its collective contract with General Motors ensured that all nonunion workers had to pay the equivalent of two days wages per year for representation rights. Article 17.3 stated that General Motors would pay SMATA $24,000 per month as a contribution to its “union activity” fund. Thus, in exchange for a flexible labor contract and conditions that were conducive to a very low level of unionization, SMATA maintained the right to monopoly representation of the workforce, and had a guaranteed income from the factory that did not depend on the level of unionization. The pattern of flexible negotiations in exchange for the right to representation and a guaranteed monthly income also was used by SMATA with Fiat and Toyota (Battistini 2001). In general, SMATA used Argentina’s domestic structures and the company’s desire for flexible labor relations to its advantage. And like at Ford and Volkswagen, SMATA did not pursue transnational campaigns or international bargaining with the company.

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SMATA’s Crisis and Recovery SMATA’s good fortune did not last forever. The economic crisis that began in the late 1990s and reached devastating levels in 2002 was the principle cause for this change.27 The Brazilian financial troubles of 1998 led to a decline in auto sales of cars made in Argentina since the Argentine auto sector was closely tied to the Brazilian sector through the Mercosur trade agreement. The crisis in Argentina grew worse when Brazil devalued its currency. Argentina could not do the same since its currency was legally pegged to the U.S. dollar. When Argentina defaulted on its international debt in late 2001, the economy—and auto production—dropped precipitously. From 1998 to 2002, annual auto production declined by 65 percent (from 457,957 to 159,401 vehicles). SMATA’s membership, which had shot from forty thousand in 1991 to eighty thousand in 1995, dropped to thirty-eight in 2002 (Dragun 2002). To survive economically, SMATA continued negotiating agreements with companies in which nonunion members had to pay more to the union. Additionally the union decided to increase the percentage of salaries that the workers had to give to the union in dues from 2 percent to 5 percent, which was a remarkably high rate by international standards.28 While it was fighting to survive economically, the political legitimacy of SMATA came into question. In 1999, ex-workers of the Mercedes Benz factory outside Buenos Aires publicly testified that SMATA leaders had collaborated with the military in the late 1970s to kill fourteen labor unionists. On August 16, 2001, the president of SMATA, José Rodríguez, was called in for questioning by the Argentine Truth Commission. Rodríguez was accused of having given the names of these unionists to the company, which then purportedly turned them over to the security forces that had them killed.29 Investigations indicated that the plan to rid the company of the radical unionists was made on July 19, 1975, when the union leader and management from Mercedes Benz signed a contract in the Ministry of Labor in the presence of the minister of labor, Carlos Federico Ruckauf. Through the pact, the company purportedly agreed to pay the union the equivalent of 1 percent of its sales and the union purportedly agreed to “improve the well-being of the workers, increase productivity, and eradicate the negative factors that interfere with labor relations.”30

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In the end, according to the charges, the company had rid itself of the radical unionists, and Rodríguez had rid himself of a threat to leadership control by the left. As the investigation deepened, the International Metalworkers’ Federation suspended Rodríguez from his post as vice president in May 2003, pending the outcome of the investigation.31 SMATA vigorously denied these accusations and threatened to disaffiliate from IMF.32 The union’s fortunes reversed as the economy and the auto sector experienced a dramatic recovery. From 2002, when the country produced 159,401 vehicles, production shot up to 597,086 vehicles in 2008, an almost fourfold increase. At its 2007 national congress, union president José Rodríguez declared that the union had survived the crisis and was now stronger than ever. Rodríguez called on the congress to support an initiative to get more financial support from auto firms for union activities, while also announcing the union dues would drop from 5 percent of wages down to 4 percent and then to 3 percent. Rodríguez was then elected to another four-year term. The event ended with greetings from SMATA’s “closest friends,” who were high-level Peronist leaders in government and the Peronist leader of the national labor center, the CGT. Noticeably absent from the president’s discourse was any reference to international union solidarity. Given SMATA’s history and strategic response to industrial restructuring, this comes as no surprise. But crisis would strike again. The global recession hit the Argentine auto sector in 2009 with a 46 percent drop in production. At the same time, José Rodríguez would once again come under scrutiny, this time for the mishandling of the union’s now sizeable social security fund.33 In April 2009, Rodríguez resigned after having led SMATA for thirty-six years. Seven months later, at the age of seventy-four, he passed away. SMATA, however, would continue on with its moderate union orientation that favored domestic pacts and microcorporatism over transnational labor networks.

Comparative Analysis of Moderate and Left Strategies While moderate unionists in Brazil and Argentina used similar strategies to respond to industrial restructuring, there are important variations in outcomes. My survey results indicate that auto plants organized by moderate

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unions in Brazil on average had a 48 percent unionization rate; the comparable rate in Argentina was 67 percent. What accounts for this crossnational variation? The most notable differences between the two countries are state institutions and the labor relations regime. Three labor laws enjoyed by Argentines but not by the Brazilians made a significant difference. First, monopoly, industry-level unionism in Argentina allowed the union to respond as a bloc and avoid the fragmentation suffered by the Brazilian unionists when the industry decentralized. Second, the Argentine law that allows for the automatic renewal of collective contract agreements if at least one side did not want to make changes allowed the unions to avoid greater flexibility of employment relations practices at the old auto plants, at least for a time. Finally, the Argentine law that allowed unions to control social security funds created an increased incentive for workers to join the union, something that was lacking in Brazil. Moreover, the very strong relationship with the Peronist party, which had been in power for eighteen years of the 1989–2009 period, furthered the union’s political access in Argentina. Despite these differences in labor relations regimes and political access, several common trends among these moderate unions stand out. First, both unions chose to respond to the challenges of globalization by accepting— indeed, at times, embracing—workplace flexibility, including management cost-saving mechanisms such as job banks and variable pay. Second, the main source of alliances shifted from the national corporatist level to the firm or plant level through varying degrees of microcorporatism in which labor accepted incorporation into the “corporate family.” Third, international solidarity was weakly developed, if at all. There were no TLNs and there was no international bargaining organized by the moderate unions in Argentina and Brazil. The international work that did take place was most often limited to participation in international conferences or international work training programs organized by the corporations. Both union movements also, at times, used the threat of unionization by another union to their advantage with management. The moderate unions in Brazil presented themselves as an alternative to the left unions, which demanded more from management and were more likely to disrupt production in order to achieve their demands. The moderate SMATA union in Argentina offered itself to management as a more flexible alternative to

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the rigid, traditional Peronist union, UOM. While in some cases management was reluctant to respond to these overtures, in other cases the use of a radical flank—or, perhaps better put, “intransigent flank”—mechanism (since UOM was not a radical, left union)—appears to have helped these moderate unions gain representation rights. Comparing unionization outcomes over time between the moderate and left-oriented unions in Brazil illustrates that the left CUT unions maintained a larger presence in the auto sector. These represented a total of 40,000 workers in nine major auto factories whereas the moderate Union Force represented 4,400 workers in five factories. At the same time, Union Force gained representation rights in most of the new factories (built since 1996). Indeed, by 2009, the CUT no longer represented workers at any new facilities outside the São Bernardo region (Sanches 2009). The CUT unions did maintain a higher level of unionization in their factories, which increased from 61.81 percent to 64.59 percent from the 1990s to 2002. In contrast, Union Force’s representation started at the much lower rate of 40.83 percent and decreased to 37.99 percent during the same period (see table 6.1). The data show that it was much more difficult to unionize new plants. On average, 62.06 percent of workers in old facilities were union members, whereas only 34.79 percent of workers in new facilities joined unions. TABLE 6.1 Unionization in the Brazilian auto sector 1994–1996

2000–2002

Number unionized

Percent unionized

Fiat, Betim

1,800

10.30%

3,000

31.84%

Ford, Bahiaa

—

—

1,100

33.36%

CUT / left unions

Number unionized

Percent unionized

Ford, São Bernardo

5,296

87.30%

3,425

86.69%

GM, São José dos Campos

6,767

62.50%

6,447

71.21%

Mercedes-Benz, São Bernardo

6,974

70.80%

6,640

66.21%

Scania, São Bernardo

1,991

68.10%

1,525

62.17%

Toyota, São Bernardo

434

65.60%

356

64.85%

19,207

87.00%

12,798

86.00%

7,000

42.90%

4,758

79.00%

Volkswagen, São Bernardo Volkswagen, Taubaté Totals /averages

49,469.00

61.81%

40,049.00

64.59%

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TABLE 6.1 (Continued ) 1994–1996 Union Force/ moderate unions

2000–2002

No. unionized

% unionized

No. unionized

Ford, Ipiranga

1,605.00

64.80%

—

GM, São Caetano do Sul

2,964.00

32.60%

2,000

% unionized — 40.00%

General Motors, Gravataí

—

—

30

2.00%

Renault / Nissan, Curitiba

—

—

1,297

51.57%

Volkswagen, Resendeb

—

—

427

44.00%

Volvo, Curitiba

1,655.00

25.10%

688

52.40%

Totals /averages

6,224.00

40.83%

4,442.00

37.99%

Sources: Author’s interviews, DIEESE, CNM/CUT, Union Force a This union later left the CUT following a split in 2005. It is linked to the Communist Party of Brazil (PCdoB) and remains a left-oriented union. b Includes non-VW production workers; by 2005, the union had joined a CUT-affiliated confederation and later became part of an independent labor center, the CTB.

TABLE 6.2 Unionization in the Argentine auto sector 1987 SMATA unions Ford, Pacheco

1997–1998

Number unionized

Percent unionized

Number unionized

Percent unionized

Number unionized

Percent unionized

2,869

70%

3,325

95%

1,664

95%

313

25%

144

16%

1,049

98%

520

93%

245

35%

245

35%

General Motors, Rosario Mercedes Benz, Virrey / Pino

2002

1,665

71%

Toyota, Zárate Volkswagen, Pacheco

2,454

71%

2,090

95%

817

95%

Total union members and average unionization rates

6,989

71%

7,021

70%

3,390

67%

Sources: Author’s interviews and Novick and Wilkis (2001)

This is one cause for the lower union representation of Union Force. Yet the CUT’s strategy, described earlier, of combining strike activity with new forms of transnational activism, including transnational negotiations, helps explain its increase in the unionization rate as the industry lost jobs.

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In Argentina, auto unionization has been much higher than unionization by both moderate and left unions in Brazil. In the late 1980s, 71 percent of Argentine auto assembly workers were union members. In the late 1990s, in the older auto plants unionization reached 95 percent or higher, figures that were unheard of in Brazil. Yet, as in Brazil, as new modular facilities were built, unionization dropped precipitously. The new auto assembly plant of General Motors had the lowest unionization rate (16 percent) among auto plants in the country. From 1987 to 2002, the overall percentage of workers unionized in Argentine plants also dropped, to 67 percent (see table 6.2).

Conclusion Like unionists elsewhere facing international industrial restructuring, moderate auto unionists in Argentina and Brazil have found the need to develop new strategies. Yet, like the moderate apparel unionists in Central America, these cases illustrate that transnationalism is not the only response to corporate globalization. Rather, these unions have found other ways to survive and at times to grow. Indeed, the moderate unions in the auto sector are the dominant bloc in Argentina. And in Brazil, while not as large as the left auto unions in the CUT, moderate auto unionists still maintain an important presence in the sector, especially in the new auto assembly plants. How did these unions achieve such success in a global industry without turning to international labor activism? These unions have their roots in corporatist labor traditions where labor was seen as a partner with the state and employer organizations, unified in the goal of national development. Class conflict was shunned in favor of class collaboration. As the economies moved away from protectionist, national development policies and shifted toward market-oriented reforms, the old macrocorporatist pacts entered into disfavor. Yet the inclination of these labor groups to respond to new challenges via cross-class collaboration remained; what would change would be the form of that collaboration. What the moderate unions in both Argentina and Brazil learned is that, while neoliberal reforms were not conducive to macrocorporatism, they were conducive to plant-level microcorporatism. This fit with new management ideas on flexible worker-employer relationship systems in which

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national pacts (or national bargaining agreements) were untenable because they forced employers in dynamic industries into a one-size-fits-all scenario. The better approach for employers was plant-level arrangements with labor that took into consideration the particular needs of each factory. Flexible working hours and job assignments allowed employers to use workers as needed. Linking salaries to productivity meant that even payroll costs would adjust according to employee team and factory performance. The strategy of the moderate unions was to embrace this push for flexibility at the plant level. In Brazil and Argentina, the moderate unions presented themselves to management as more flexible alternatives than their main rival unions. Finally, these case studies once again reveal the importance of the state in shaping outcomes. While moderate unions in Brazil and Argentina pursued similar strategies of flexible, cross-class collaboration, the Argentine unions were far more successful in terms of the percentage of firms and workers they represented. The difference lies in Argentina’s more favorable labor relations regime. Labor laws allowed for industrial unions with strong collective bargaining rights. Union-administered social welfare funds also helped the union gain members. These cases complete my exploration of labor’s four responses to global restructuring in the Latin American auto and apparel export industries. What are the lessons learned? What might be the implications for other movements confronting similar challenges? These are the subjects of my concluding chapter.

7

Conclusion Between Solidarity and Fragmentation

Trade unions must convince the world at large that their efforts, far from being narrow and selfish, aim at the emancipation of the downtrodden millions. —Karl Marx Is capitalism, with its habitual restlessness, producing new forms of nationalism? —Benedict Anderson

One of labor’s most crucial and historic dilemmas has been whether to engage capital narrowly as a group of employees or more broadly as a social class. This dilemma is particularly salient in debates between national and international strategies. Within the heart of labor beat the conflicting forces of parochialism and nationalism, class solidarity and internationalism. No labor organization is free from these tensions, but activists do make choices on how to balance them. And, while it has become fashionable to suggest that labor unions need global strategies to succeed in a global economy, the analysis presented here suggests that pursuing internationalism without simultaneously maintaining strong national and local strategies would be an even greater folly. What we have seen in the preceding chapters is that new labor strategies have emerged and matured in the context of global supply chains and

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lean states. In a word, labor solidarity has been transformed. But it has not evolved into some ideal type or one best practice. Rather, the story of this transformation indicates that at least four labor strategies have developed, and they have done so along those primordial axes of structure and agency. The governance structures of global commodity chains signal to labor the sources of economic power and leverage, while labor identities and worldviews shape how labor chooses to target those structures of power.

Four Labor Strategies In the apparel global value chain in El Salvador and Honduras, left unionists, through an arduous process of trial and error, participated in transnational activist campaigns (TACs) with an array of nongovernmental organizations that targeted apparel retailers and brand-name apparel corporations. Traditional sources of structural and associational power were lacking, but they were not powerless. Rather, they derived their strength from social movement tactics of localized protest and disruption combined with naming and shaming image-sensitive corporations (normative power). Exposés of child labor, below-subsistence wages, and gender discrimination were used to leverage companies into respecting workers’ rights. Moderate apparel unionists interpreted new threats and opportunities in a different light. While restructuring also weakened their structural and associational power, they seized upon an opportunity provided by the success of left unionists. They presented themselves as a moderate alternative to the “radical” left, which made them more appealing to factory owners. This form of unionism often had clientelistic roots but it evolved over time. In the case of Honduras, as the radical flank mechanism began to lose its punch, one major moderate apparel union shifted strategies and embraced transnationalism. In the producer-driven global commodity chains of left Brazilian autoworkers, the pressures of industrial restructuring pushed the unionists to strategic forms of transnationalism, but theirs was of a noticeably different form from that of apparel workers. The massive production headquarters of Ford in Detroit and Volkswagen in Wolfsburg were the target of their activism. The higher value added and greater stability of

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auto production relative to apparel production provided labor with greater structural power, which, with the skills of the unionists, translated into national and international associational power. Strong unions, emerging global employee councils, and international framework agreements provided an institutional structure upon which transnational labor networks (TLNs) could develop. Moderate auto unionists in Brazil and Argentina held different views of how to respond to the auto industry restructuring. These views were rooted in their more collaborative labor identity. Old macrocorporatism was displaced by new forms of plant-level collaboration. At the same time, their nationalist orientation circumscribed the potential for TLNs. As with the moderate apparel unionists in Central America, at times the threat of left unionization or even unionization by conservative but rigid opponents increased their appeal to management, allowing them to develop microcorporatist pacts that often gave the unions financial and organizational stability. These were cases that evolved over a twenty-year period as each of the main explanatory variables—industrial structure, the state, and labor identities—experienced some degree of change over time. For example, two labor centers, FENASTRAS in El Salvador and the CGT in Honduras, went through important identity shifts during this period, resulting in shifts in their organizing strategies. The apparel industry in the region, once only based on assembly production for export, expanded into textile and other components of the supply chain as a result of changing trade rules that reduced the probability of plant closures in the face of union drives. And governments and states went through remarkable shifts, either increasing or decreasing labor’s access to the state. Argentina saw five presidents between December 2001 and January 2002 as its economy faced a meltdown. Brazil went from the neoliberal government of the 1990s to the election of an ex-labor unionist in 2002. El Salvador, after twenty years of conservative rule, elected a left-wing government in 2009. Honduras shifted to the left in 2006 and then back to the right following the June 2009 coup d’état. These are thus very dynamic stories, and the presentation of four labor responses is not meant to be a rigid categorization of labor’s options, where each group fits neatly into one box or another. Rather, the variation in responses is meant to illustrate the main factors contributing to labor

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strategies. Labor solidarity in buyer-driven commodity chains will look different than in producer-driven commodity chains, and unions in laborfriendly states will have a different fate than unions in states that routinely violate labor rights. This is a probabilistic argument, and it is meant to emphasize that there is no one best strategy for labor in a global economy. Indeed, in the midst of these structural factors, labor also had choices. Labor had room to make bad choices, rethink its strategy, and try something different. But this leaves us with one important question: Do labor’s new strategies make a difference for workers?

Altering the Logic of International Restructuring When presenting my work, I sometimes get that familiar “why-does-itmatter” question. I have interpreted this question in two ways: What are the theoretical and methodological contributions of my work? And did these new labor strategies make a difference in the lives of workers and the structures of capital? In the apparel sector, TACs did result in union formation, and wages and benefits tended to increase. However, there is an ill-fated side to this story. Many of the more successful cases resulted in employers closing a plant and moving elsewhere to rid themselves of a union and higher wages, a dramatic setback to the union and the workers. Just as activists had finally figured out how to engage an innovative transnational strategy that resulted in unionization and better wages, the long-term result was plant closures. Yet the movement did not stop there. The employer strategy of closing plants to avoid unionization prompted an activist industry-wide strategy to ensure that apparel manufacturers played by the same rules of the game in the global economy by forcing them to respect existing corporate codes of conduct or by negotiating new, multi-stakeholder codes and verification processes. Of course, no private code of conduct can duplicate an entire body of national labor legislation, and no monitoring program can successfully re-create a ministry of labor with its department of workplace inspection (Seidman 2007). But industry-wide campaigns have affected the logic of the global apparel sector. One of the biggest obstacles faced by activists in the early years

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of campaigning was a refusal by corporations to accept responsibility for the conduct of their contractors. In the eyes of the corporations and the law, the contractors were fully independent employers. Even within the United States, limited liability laws legally protect corporations from charges brought against their contractors for labor rights violations. Thus the first major challenge of the activists was to force the corporations to go beyond the confined responsibilities established by national and international regulatory frameworks, and to accept some degree of responsibility for violations committed by their contractors. This was no easy task. In response to early activist campaigns, brand-name apparel companies and retailers even argued that labor rights violations committed by contractors were not their moral responsibility since most often their production contracts never amounted to more than 50 percent of the total production capacity of a contractor. Activists countered that it did not matter if a corporation had 20 percent or 80 percent of the production orders of a supplier; if their products were made in a factory, then they shared responsibility for labor rights violations that took place there. The corporations lost the battle, as the activist campaigns and the media exposés they inspired successfully made the normative case for joint responsibility. The challenge then shifted to what kinds of standards and enforcement mechanisms should be used to address potential labor rights violations. Corporations favored initiatives that they controlled whereas activists preferred programs where corporate influence was greatly curtailed, and here corporations have maintained the upper hand. In the auto sector, the impact of new union strategies has also been transformative. Early transnational campaigns in Brazil resulted in more effective collective representation of labor in work centers through factory councils. These campaigns also assisted labor in improving wages, fighting human rights abuses, and demanding democratization. Later campaigns helped unions and workers address new challenges created by international outsourcing. Through outsourcing, one of the most important goals of auto firms was not just to compete with other auto manufacturers, but to create an internal dynamic through which factories producing for the same auto firms were put into competition with each other. When a firm developed a new car model, it would send the design to its different factories, perhaps in Mexico, Brazil, and South Africa. Each factory was then

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asked to submit a production plan with an estimated cost structure. The factory with the best plan and the lowest cost would win the contract. This put pressure on these competing factories to keep wages and benefits as low as possible. Indeed, managers would often go to the workforce and union and explain that to maintain the current level of employment the factory needed a new car model to replace the old one, and they needed to produce it at the lowest cost possible. The workforce could choose between losing jobs or keeping their jobs but taking a cut in compensation and benefits. The system worked best for the auto MNCs when workers did not communicate with each other across borders to coordinate strategies. Yet Brazilian and German unionists often managed to break out of this competitive dynamic and present a company with a plan whereby job losses and gains would be shared across factories over time. Unionists did this at Volkswagen and their goal is to increase union-to-union communication in other companies with the same objective. Employers had also used internationalization to facilitate production shifts from one factory to another in response to any disruptions in production, including a labor strike in one country. But this employer strategy also depended on a divided global workforce. Unionists began coordinated strategies—a process facilitated by the global employee committees and international framework agreements—and quickly agreed that workers in non-striking countries would refuse to do overtime work if their production was being used to compensate for lost production elsewhere due to a strike. This increased the pressure on employers to meet the labor union’s demands at the striking facility. In Argentina, even the employer push toward modular production—the cornerstone of the German and U.S. auto industry restructuring plans in South America—was halted as a result of labor activities by unionists who did not resort to transnational activism but rather to skillful organizing and effective use of national regulatory frameworks. In the late 1990s, Volkswagen attempted to implement modular production in its Pacheco plant in Argentina. But the union used laws that prevented companies from reducing past gains in collective contracts. The law also proscribed industrywide unionization, which increased labor’s organizational leverage. In the end, Volkswagen was unable to introduce flexible contract arrangements, and modular producers were forced to pay similar wages to

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those received by direct Volkswagen employees. Thus modular production resulted in the same costs as traditional production, but with much greater logistical complications caused by the introduction of so many independent firms into the factory. As a result, the union’s actions forced Volkswagen to reverse its decision to use modular production. Yet in other cases, most notably in new auto plants where there was no previous collective contract to protect workers, the union was unable resist the modularization. Indeed, it struck deals with managers through which it exchanged acceptance of modularization for union survival. In all cases and countries, labor understood that targeting employers would not be enough; they would also need to target the state. In every campaign, labor unions targeted Ministry of Labor officials, politicians, and government representatives to have their union recognized, to penalize employers who broke the law, and in general to promote their agenda. At certain critical junctures, labor unions were also able to push for more dramatic regulatory or political changes, such as the re-writing of labor laws or the election of pro-labor presidents in national elections We have also seen that, under certain conditions, unions may pursue a regressive response to globalization. In El Salvador, one group of conservative unions allegedly took money from firms in exchange for blocking left unionization. These conservative unions did not provide benefits for the workforce. Rather than protect workers who attempted to unionize and demand better wages, they often facilitated their dismissals by negotiating severance pay deals with employers and then keeping a percentage of the money received. What this suggests is that workers in global manufacturing industries have faced a choice. They could accept the logic of the market-oriented reforms and collaborate with capital, or they could challenge this logic and seek new forms of local and transnational solidarity to put pressure on capital and the state. A strategy of nationalism and collaboration may allow workers, their unions, and employers to work together at the plant level to increase productivity, competitiveness, and perhaps some economic benefits. Yet it runs the risk of fragmenting the labor movement and thus making larger, long-term efforts to achieve more sustainable improvements less tenable. A local and transnational activist strategy avoids this risk since the strength of this approach rests on building broad social alliances. This

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form of labor solidarity also contests the logic of industrial restructuring by targeting vulnerable segments of global commodity chains and by pressuring the state to alter the rules governing restructuring in ways that are more favorable to labor. Thus the potential benefits of this strategy include deeper economic and political structural transformations. The risks of this strategy rest in the mobility of capital and its ability to substitute for more radical unions ones that are more amenable to its agenda.

Looking Beyond the Manufacturing Sector This book focuses on changing forms of labor solidarity in global manufacturing. The geographic dispersion of production through international outsourcing is a salient feature of the global economy. Millions of workers are employed in final assembly plants or in the hundreds of thousands of large and small contracting firms that constitute the production chain. But global production networks are not the only forces at work in the global economy, nor are new labor strategies limited to the manufacturing sector. How might the arguments presented here carry over to other sectors of the economy? Service sector organizing has benefited from transnational activism. For example, Public Services International (PSI), the global union federation that represents the service sector, has aggressively lobbied organizations like the WTO to prevent the complete liberalization of trade in services, especially essential services (Hartmann and Scherrer 2003). Here strategic framing plays a role, as activists try to make the normative case that stopping the privatization of essential services would not only protect good union jobs, but would also keep services affordable to the majority of the population. Even informal sector workers participated in and benefited from strategic framing and transnational activism. The informal sector encompasses economic activity that is not legally sanctioned and workers are not protected under formal regulatory frameworks. It is one of the fastest growing sectors in developing countries. According to the International Labour Organization, employment in the informal sector comprises 51 percent of employment in Latin America, 65 percent in Asia, and an astounding 72 percent in sub-Saharan Africa (ILO 2002b, 19).

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The informal sector is notoriously difficult to organize for numerous reasons. First, in many, if not most, cases, there is no direct employerworker relationship. Market vendors, children selling goods at street intersections, and door-to-door salespeople are self-employed. Often they borrow money from a loan shark, purchase a product, and then spend countless hours selling the item with the hope of earning enough to pay back the money lender while also having enough to cover their daily needs. Such a situation is not conducive to collective bargaining, strikes, or other typical actions that unionization could offer, because there is no employer counterpart. Nonetheless, unions are attempting to find innovative ways to organize these workers (Bieler, Lindberg, and Pilly 2008). In Nicaragua, local labor unions with funding from the Norwegian Confederation of Labor (LO-Norway) have had some success organizing children who sell their goods on street corners. Global union federations like the International Union of Foodworkers (IUF) have become increasingly interested in how to address the problems of informal labor that are incorporated into the supply chain of major agro-export products such as bananas. By tracing the global supply chain down to the lowest level of employment, where informal labor, child labor, and forced labor are more likely to exist, transnational activism remains an important tool for leveraging powerful corporations to take corrective action.

Targeting International Institutions If new challenges presented by economic globalization and crisis have forced labor to develop new strategies that target factories, corporations, and the state, it seems only logical that labor would also attempt to target interstate institutions that shape the rules under which capital operates. The evidence bears this out. Notably, the formation of the World Trade Organization (WTO) in 1995 presented the international labor movement with just such an opportunity. First, the deepening of trade liberalization, dismantling of special regulations in agriculture and textiles, and expansion of trade negotiations into new areas such as trade in services created a threat for labor. At the

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same time, the WTO had significant power to ensure compliance with its rules. Labor hoped that it could either stop the march toward greater free trade or at least use the enforcement mechanism of the WTO to ensure that trade benefits were tied to respect for internationally recognized labor rights. The trick was getting the WTO ministers to accept a labor standards clause in the mechanism of the institution. The labor movement began a process of national-level lobbying and other forms of pressure to achieve its goal. But the real showdown for the labor rights campaign was the Ministerial Meeting in Seattle, Washington, in late November 1999. The outcome of that event is now well known (O’Brien et al. 2000; Smith 2001). The demand for a labor rights clause met with stiff opposition from developing countries based on their fear that rich countries would use such a clause for protectionist purposes.1 Thus the clause appeared very unlikely to win approval when the Ministerial Meeting collapsed. The campaign, however, did result in greater attention to the trade–labor rights linkage, and increased attention to these issues in the ILO, International Monetary Fund (IMF), and World Bank. For example, it contributed to the ILO’s Declaration on Fundamental Principles and Rights at Work in 1998, and, in June 2008, the ILO’s formal adoption of its Decent Work agenda. Other international financial institutions have long been on the agenda of the international labor movement, notably the IMF and the World Bank. Labor had long been irked by the World Bank’s Doing Business Report, which ranks countries around the world for their degree of labor market flexibility or the ease with which employers are able to hire and, especially, fire workers. Countries with high severance-pay requirements or good benefits are given a poor score since they are seen as raising the cost of doing business. The international labor movement, now mostly organized in the International Trade Union Confederation (ITUC), has put pressure on the WTO to end their push for greater labor market flexibility through the Doing Business indicators. In the spring of 2009, labor could point to an important achievement: the World Bank announced that it would stop using the labor market flexibility indictors. The IMF announced on the same day that not only would it not use the indicators, but that it had in fact internally decided to stop reference to the labor indicators back in August 2008 and was now making

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that decision public. The World Bank’s private lending agency, the International Finance Corporation (IFC), had already begun to condition infrastructure projects based on respect for labor standards. No doubt, labor’s concerns with these institutions are far from over. Unionists blame them for their role in financial crises in Asia in the late 1990s and Latin America in the early years of the new millennium, and for forcing countries to reduce their social safety nets prior to the global recession of 2008–2009, making that economic downturn particularly painful to workers. These are notoriously hard institutions to change, but labor has shown that it is capable of achieving some union-friendly reforms.

Implications for How We Study Labor and Other Social Movements The study of complex social phenomena often does not fit neatly into any one academic discipline. This study has drawn insights from history, economics, sociology, and employment relations. My discipline by training is political science, and this book has its roots in political economy and the political process model of social movement theory. It takes from political economy the importance of economic structures and state policies in shaping labor movements. Changing trade rules have allowed capital to become more concentrated, while encouraging the decentralization of production. The networks of production and distribution that span states, as noted by economic sociologists, have indeed clustered around two types of governance structures: producer-driven and buyer-driven. What my analysis adds to this account is that governance structures are also instrumental in indicating what type of labor internationalism might develop. Targeting producers or buyers is just the beginning of the story. Governance structures also indicate whether alliances are more or less likely to involve labor unions or international activists, and whether activism will be short-term or sustained. It also suggests whether labor’s power is more or less likely to be structural, associational, or normative. Applying social movement insight to the study of labor movements, I have argued that labor movements in states with a relatively open political process and labor relations institutions favorable to workers can be expected to work within the domestic political process to find relief for

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their grievances. Where domestic political opportunities are closed, labor movements may complement a more contentious course of action (such as militant strikes) with transnational advocacy that targets multinational corporations or states with more open political structures. This suggests that we can anticipate a greater degree of labor transnationalism in countries where labor’s political access is more curtailed. But my research also suggests that some activists facing unfavorable domestic institutions may, for reasons linked to their political identities, be reluctant to pursue transnational activism. For these activists, their strategic antennae are focused on new ways to collaborate with capital at the point of production. This variation in activist responses to new challenges is not always anticipated by social movement scholarship where activists are expected to take advantage of new opportunities, in this case corporate vulnerabilities in the global economy. To the extent that culture is explored in the dominant social movement paradigms, it is often only used to explain how movements utilize or create mobilizing frames.2 In this view, culture is used strategically by actors; it does not shape the range of threats and opportunities they perceive. Yet, as I have argued and as my empirical findings indicate, a more complete cultural analysis needs to examine how historical experience and political identities shape movements’ perceptions of threats and opportunities. There is more than one way for different labor activists to pursue similar goals. While all union leaders can agree that it is their responsibility to protect the jobs of their members, one union leader might believe that the best way to do this is to establish national pacts with domestic employers, while another might find that transnational union-to-union alliances can avoid a perceived race-to-the-bottom job competition that ultimately hurts workers in both countries. The same interest translates into very different logics of labor solidarity. Historical experiences, human values, and political identities make labor a complex social actor. It is certainly far more than the “bounded economic actor” who is confined to economic demands dictated by structural conditions, as suggested by some.3 While labor movements represent workers, and workers tend to want more wages and better benefits, their position in the economy does not preclude them from aspiring to non-economic demands, particularly during periods of great political turmoil or when

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facing atrocious conditions that are an affront to the most basic principles of human decency. In Brazil in the early 1980s, auto unionists demanded higher wages and democratization, calling for an end to human rights abuses. And the struggle of Central American garment workers who deal with sexual harassment, abusive working conditions, and below poverty-level wages is as much about economic self-interest as it is about human dignity and the rights of women. Indeed, the apparel export industry in Central America has grown largely based on a gender division of labor that has attempted to exploit larger patterns of cultural subordination of women in society (Tiano 1994). As a result, activism in the sector often takes on a distinctly gender-based orientation (Brooks 2007). Just as labor movements also pursue non-economic demands, “principled value” movements (like Chilean feminists who fight for gender equality and Brazilian rubber tappers who struggle to protect the environment) also have some economic self-interest in mind when they organize their protests. Thus the study of labor movements—as in the study of other social movements—needs to combine assumptions of economic self-interest and principled values as motivating influences. What this suggests is that the analytical divide between social movements and labor movements is often overdrawn. For labor, as for other social actors, values and ideas are not set in stone. Dramatic crises, political events, or external ideational influences can shift union cultures. Crises may allow new people to enter leadership who bring with them innovative tactics based on alternative visions of organizing (Voss and Sherman 2003). Their distinct political identities allow these leaders to perceive threats differently and envision alternative strategic responses. U.S. labor literature is increasingly finding that labor success is tied to an “organizing culture” (Bronfenbrenner 1997; Porter and Bensinger 1993). European labor literature is also looking at changes in union cultures and ideologies, as class-based and populist politics appear to be slowly replacing more extreme forms of “political economism” (Hyman 1994, 135). Studying the influence of culture and labor ideologies at a time when they are in flux becomes a formidable challenge for labor studies scholars. But the potential impact of these fluctuations on union strategies makes their inquiry all the more necessary.

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Final Thoughts This book has highlighted three overlapping processes: 1) the dramatic, union-averse restructuring of global manufacturing through export processing zones and modular production, 2) the complex transformation of the state and its role in shaping the dynamics of labor solidarity, and 3) the resilience of labor as a movement and its capacity to find new (albeit not always progressive) forms of solidarity to respond to the dual challenges of state and economic transformation. In less than ten years, export processing zones expanded their production in El Salvador and Honduras to surpass the economic importance of traditional export crops that had dominated these economies for over a century. In Brazil and Argentina, traditional auto assembly plants were dramatically—although unevenly—transformed through outsourcing, modular production, and new managerial practices. These internationalized production systems put new pressures on local employers to keep wages low and unions out. At the same time, contrary to what some of the globalization literature might suggest, state structures continued to play an important role in shaping labor relations dynamics. In some cases, unfavorable labor relations regimes provoked labor to pursue transnational alliances, while favorable labor relations regimes made new domestic strategies more tenable. Effective labor strategies often caused state actors to strengthen state institutions and thus improve labor laws and enforcement mechanisms. And by the early 2000s, many Latin American unionists joined campaigns to bring labor-friendly governments to power with the hope that better political leadership would result in more effective and labor-friendly state institutions. What the account presented here suggests is that, within the context of shifting political and economic structures, labor could accept the logic of capital as it increasingly fragments the production process and with it the workforce, or look for ways to go beyond this logic by building new alliances within and across countries. When successful, labor and its allies have the potential to alter the dynamic of neoliberal restructuring, reorient political processes, and ultimately improve workers’ lives. In this way, the transformation of labor solidarity can contribute to a more equitable global social order.

Notes

1. Introduction 1. The exception to this trend is when one facility provides a crucial component upon which all other enterprises in the production network depend. But most often, especially in mature industries with standardized goods, this is the exception and not the rule. 2. I will elaborate on this point in the next chapter. 3. The reforms, however, do allow for voluntary negotiations, although this is not very common. 4. Interview with Artur Henrique da Silva, general secretary of the CUT, São Paulo, Brazil, August 10, 2005. 5. Daniel Cieza explains that this law “was the most progressive of its kind in Latin America [and it] was actually enforced thanks to the active presence of stewards in the workplace” (Cieza 1998, 20). 6. The law allowed workers to be hired on a trial basis. It also allowed for workers to be hired through renewable, short-term contracts. Under these contracts, employers were only obligated to pay half of the normal benefits, including expenses covering pensions, social welfare, and family contributions (Ranis 1995, 212). 7. In the 1920s and 1930s, communist unionists in Latin America—adhering to the classversus-class thesis of the Communist International—sought to replicate the Russian experience. The Salvadoran and Brazilian communist parties and their union allies participated in insurrections against the state. These experiences ended badly due in part to poor organization, but also as the result of extreme levels of brutality used by the regimes to suppress these movements. An

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estimated ten thousand activists and peasants were killed in El Salvador following the communist uprising there (Anderson 1971). 8. Some labor groups maintained their militancy and class-based identities (French 1992). 9. ORIT was the Inter-American Regional Organization of Labor (Organización Regional Interamericana de Trabajadores), of which the AFL-CIO was the most dominant member. 10. Of course, identities are never fixed in stone, nor are they limited to a simple left-right political dichotomy. Rather, identity formation is always dynamic as a result of multiple influences. In the chapters ahead, we will explore two important cases that illustrate why identities may shift over time and how this shift impacts subsequent actions. 11. The relationship with nonlabor activist groups, particularly women’s groups, has not been without its problems for labor. Labor union leaders are often men who are less sensitive to the specific problems faced by women workers and the need for organizational structures best suited for their needs. This has led to tensions between labor and women’s groups. 2. Segmented Production, Fragmented Labor 1. Feenstra and Hanson refer to this as processing trade, or trade in intermediate goods, which they see as increasingly relative to trade in finished products (Feenstra and Hanson 2001). 2. In economic terms, high product elasticity is favorable to labor since producers can pass wage increases on to consumers. Yet, in the segmented system, product demand elasticity is in effect zero. One option would be for producers to pass cost increases on to the core firm by negotiating a higher price for their services via the production contract. But supply-chain monopsony, explained below, prevents this option. 3. Fictitious name used for confidentiality. 4. These are mostly in developing countries, although a few developed countries—such as Ireland—are known for their EPZs. 5. Some countries allow for a small percentage of products to be sold domestically. Yet this is usually very limited. Since local producers for the domestic market do not receive the significant tax breaks that EPZ producers get, allowing the domestic sale of EPZ production would amount to unfair competition. 6. There are also several intermediaries as small producers often associate with larger producer consortiums. But the balance of power between producers and retailers still overwhelmingly favors the latter. 7. Gap Incorporated, 2003 Social Responsibility Report, http://www.gapinc.com/public/docu ments/CSR_Report_03.pdf (accessed July 29, 2010). 8. Moran (2002) specifically makes the comparison to the agricultural sector. 9. Indeed, demand was so great that the government created a special entity, recintos fiscales, which would receive the same benefits while being located outside the EPZs. Later, this term was changed to “Depósitos de Perfeccionamiento Activo” (DPA). Central Americans refer to all this production as “maquila” production. For simplification, I will use “EPZ” to refer to all apparel export production. 10. Banco Central de Reserva, annual trade data statistics http://www.bcr.gob.sv. 11. Ministerio de Trabajo y Provision Social de El Salvador, Estadisticas 2002, chart 3.2.2, http://www.mtps.gob.sv (accessed January 29, 2004). 12. American Industrial Park, “El Salvador.” http://www.americanpark.com.sv (accessed April 12, 2003). 13. Luis Andrés Marroquín, “ANEP Propone Aumento Diferenciado de Salarios,” Prensa Gráfica, May 1, 2003.

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14. In the 1990s, production expanded so dramatically that investors could not fit inside EPZ zones, and the government provided special authorization to allow factories located outside the zones to receive the same benefits. Also like in El Salvador, all export-oriented manufacturing through international outsourcing was referred to locally as maquila production. To simplify, I will continue to use “EPZ production” for all apparel export production. 15. “Zip Country Profile,” Buena Vista Export Processing Zone, http://www.zipbv.com/ country.htm (accessed July 30, 2010). 16. Cited in Yesille C. Ponce and Reynaldo Yanes, “Sigue Desbalance en Maquila de Honduras,” La Prensa, January 22, 2009. 17. One study found that personnel turnover rates in EPZ firms in Central America were frequently as high as 8 percent per month (Jenkins, Esquivel, and Larraín B. 1998). 18. My calculations are based on my survey of forty-three factory unions and data provided by the Honduran Ministry of Labor and the Honduran Office of Statistics and Census (various years). Data for traditional manufacturing plants is based on plants with five or more workers. 19. Given that Bahia is one of the poorest states of Brazil, the local government of Bahia was able to invoke a special tax regime for the region that included federal tax breaks and other benefits for investors that added up to exemption from eight federal taxes worth $100 million per year for ten years. Ford also enjoys total or partial exemption from import taxes, tax on profits, and taxation of financial operations. One source noted that Ford is receiving the equivalent of US$1,000 per car that it produces in Bahia in local and national tax breaks and subsidies. The Brazilian National Development Bank (BNDES) provided Ford with over $200 million in very low interest loans (1 percent to 3 percent) at a time when the lending rate to most investors in Brazil was 18 percent (Arbix 2001). 20. This paragraph is based on my visit to the Ford plant and interviews with management and workers, Camaçari, Bahia, July 2002. 21. This paragraph is based on my visit to the General Motors plant and interviews with management and workers, Gravataí, Rio Grande do Sul, December 2002. 22. With 120 robots inside the plant, it is highly automated. It has a capacity to produce thirty cars an hour. 23. Brazil’s system of labor relations organizes unions by sector, not by plant. So cafeteria workers, custodians, security workers and other service providers each have separate unions and bargaining procedures, which augments the problem of workforce fragmentation. 24. ABC refers to the industrial suburbs of Saõ Paulo, Santo André (A), São Bernardo (B), and São Caetano (C). 25. The 3.2 percent decline was from May 2008 to May 2009. ANFAVEA, “Annual Statistics, http://www.anfavea.com.br/index.html (accessed October 8, 2010). 26. The first two were established in Britain and Canada. Prior to Ford’s arrival, the first car factory was established in Argentina in 1910 with twenty workers. 27. The partnership, known as Autolatina, began in 1987. 28. Interview, Virrey del Pino, Buenos Aires, November 11, 2002. 29. My calculations based on data provided by the Asociación de Fábricas de Automotores (ADEFA), “Statistics,” http://www.adefa.com.ar (accessed October 8, 2010). 30. This paragraph is based on my visit to the Volkswagen plant in Pacheco, Argentina, in 2002. 31. This section is based on my visit to the General Motors plant in Rosario, Argentina, on October 31, 2002, and interviews with a range of managers and employees. 32. General Motors in Córdoba was forced to close in 1998, and thus I was not able to visit this plant during my trips to Argentina in the early 2000s. 33. Based on my survey of several auto assembly plants conducted in November 2002.

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3. Transnational Activist Campaigns and the Anti-Sweatshop Movement in El Salvador and Honduras 1. This suggests support for Teri Caraway’s argument that sometimes docile unions, not docile women, contribute to the continuation of gender-based exploitation in export-oriented industries (Caraway 2007, 4). 2. A leadership dispute eventually led to the disbanding of the organization. 3. Interview with author, San Salvador, July 14, 2001. 4. The ITGLWF is one of several global union federations (GUFs). In the early 2000s, it claimed 216 affiliated unions in 106 countries representing ten million workers. 5. The elected leadership of the union could not legally be fired. So the company instructed them to pick up their paychecks each week at the Ministry of Labor but otherwise not to report to work. 6. I accompanied the unionists when they returned to their jobs. Four days later, as I detailed in the preface, three armed men—apparently linked to the government security forces—forced their way into my home and threatened my life. 7. Given that nearly two years had passed since the dismissals, most fired workers had found work elsewhere. 8. In discussions of monitoring and unionization, there remains much confusion over what monitors do and what unions do. Independent monitors verify compliance with basic, legal labor rights (the right to form a union, child labor prohibitions, minimum wage, overtime laws, etc). Normally, the role of collective bargaining is not simply to ensure respect for the law, but to raise conditions above the law. That is why monitors might report when the minimum wage was not being paid, yet not speak out for wage increases. The latter is the role of labor unions via collective bargaining. 9. I deal in more detail with FENASTRAS in the next chapter. 10. Author’s interviews with union members, leaders, and advisors of the Tainan workers, San Salvador, July 2002. 11. “Taiwan in 21st Century, Management in the 1930s: A Survey on the Factories of Tainan Enterprise, October, 2001,” Focus on Globalization, http://fog.ngo.org.tw/Emain.html (accessed July 31, 2010). 12. Interview with author, San Salvador, July 2005. Much to the dismay of the international union movement, Neil Kearney died on November 19, 2009, of a heart attack following a series of meetings with apparel workers and firms in Bangladesh. 13. Author’s interviews with CSTS activists, San Salvador, May 2010. 14. In June 1997, the NLC brought together several Honduran NGOs to form the Independent Monitoring Team (EMI). The owner of Kimi allowed the monitoring group to inspect its facilities with the hope that this would show that it was respecting labor rights. The NLC was forced to put the group together quickly and as a result the monitors were somewhat ill prepared for their task. On one occasion a monitor took to discussing terms and conditions of employment with management without the union’s participation. While the group learned from its mistake, the damage had already been done. In March 1998, union leaders openly stated that they did not want monitoring, that it was not helping their situation, and that it in fact had become an obstacle for the union by preventing it from freely and directly negotiating a collective contract (interview with author). The U.S. union movement, which was already suspicious of nonunion groups getting very involved in labor issues, more openly criticized NGO monitoring of sweatshops as an attempt by NGOs to usurp the role of unions. 15. “Acta de Finalización de Negociación del Primer Contrato Colectivo de Condiciones de Trabajo Celebrado Entre La Empresa Kimi de Honduras, S.A. y el Sindicato de Trabajadores de la Empresa Kimi de Honduras S.A. (SITRAKIMIH),” March 19, 1999. 16. Author’s interview with union organizer from Fesitraincoys, San Pedro Sula, July 12, 2003.

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17. “Empresarios de la Industria de la Maquila y Centrales Obreras Acuerdan Trabajar Unidos en Pro del Progreso de este Vital Sector Productivo,” Prensa, August 30, 1996, 21A. 18. Based on seventeen interviews by the author with national and local union activists in Honduras, June 2001. 19. Groups presenting the petitions as part of TACs included the AFL-CIO, the NLC, USLEAP, and the International Labor Rights Fund. 20. Author’s interview with a high-ranking legal advisor in the Ministry of Labor, San Salvador, May 29, 2010. 21. Author’s interview, San Salvador, May 25, 2010. 22. The author thanks Kimberly Nolan-García for providing him with copies of all GSP petitions for El Salvador and Honduras. 23. Author’s interview with high-ranking staff in the Ministry of Labor, San Pedro Sula, May 19, 2010. 24. The movement is organized in the National Resistance Front. One of the Front’s top leaders, Juan Barahona, is the leader of the FUTH. Author’s interviews, San Pedro Sula, June 2010. 25. This idea builds on Peter Evans’s idea of the triple alliance of MNCs, local capital, and the state (Evans 1979). 26. Author’s interview, San Salvador, May 25, 2010. 27. “Second and Final Report concerning the case of Gildan Activewear in Honduras,” Maquila Solidarity Network, http://www.maquilasolidarity.org/campaigns/gildan/index.htm (page discontinued July 31, 2010). 4. Labor’s Radical Flank Mechanism in Central America 1. Haines also refers to a negative radical flank effect that exists when moderates are hurt by a backlash created by the actions of radical groups (Haines 1984). 2. The other two were the communist World Federation of Trade Unions (WFTU) and the social democratic International Confederation of Free Trade Unions (ICFTU). 3. The CGT is a labor central to which many unions in different economic sectors belong. While in many formal-sector jobs, the average working age might be in the early forties, in the EPZ sector, since many workers are between eighteen and twenty-five years old, it is not uncommon for formal-sector workers to have children working in the EPZ sector. 4. Interview with author, San Pedro Sula, Honduras, June 25, 2001. 5. Interview with author, San Pedro Sula, Honduras, July 23, 2003. 6. What this suggests is that management strategies also very clearly matter. This is a variable that I was not able to fully explore, but it deserves more attention. 7. Interview with author, San Pedro Sula, Honduras, July 23, 2003. 8. It is not clear who was in charge of these activities for the CGT when these events took place. 9. Interview with author, San Pedro Sula, Honduras, June 26, 2001. 10. Interview with author, San Pedro Sula, Honduras, June 25, 2001. 11. Interview with author, San Pedro Sula, Honduras, June 25, 2001. 12. Interview with author, San Pedro Sula, Honduras, May 23, 2010. 13. Interviews with author. San Pedro Sula, June 2010. 14. The full name of STIASSYC is Sindicato de Trabajadores de la Industria del Algodon Sinteticos Similares y Conexos (Union of Cotton, Synthetics and Related Industries). 15. Interview with author, San Salvador, El Salvador. August 11, 2001. 16. Interview with author, San Salvador, El Salvador. August 11, 2001. 17. STIASSYC formed its union in Mandarin in 1993. It was destroyed that same year. Two years later, left-oriented unionists in the CSTS formed a union in Mandarin using a transnational activist campaign (see chapter 3).

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18. The women’s union group was COMUTRAS. 19. Interview with author, San Salvador, El Salvador, August 11, 2001. 20. It was not uncommon for union leaders of all political suasions to carry pistols for self defense, but they were usually kept hidden under one’s clothes or in one’s purse, not waved about. 21. See “Sindicalistas Bloquean a Trabajadores,” Diario de Hoy, February 10, 1995; “Más Controversias en torna a Juan J. Huezo,” Primera Plana, March 24, 1994; and “De Profesión Sindicalista,” Prensa Gráfica, October 15, 2000. 22. “Delatan oscuro plan sindical,” Diario de Hoy, November 15, 1995, 12. 23. “Convenio Entre la Empresa Industria Amitex, S.A. de C.V. and FENASTRAS,” October 11, 1994, unpublished document. 24. “Más Controversias en torna a Juan J. Huezo,” 4. 25. Ingrid Rodas, “Delatan Oscuro Plan Sindical,” Diario de Hoy, November 15, 1995, 12; “Las Confesiones de Juan J. Huezo,” Diario de Hoy, November 16, 1995, 4. 26. “La Rueda de Caballitos,” Prensa Gráfica, October 15, 2000, 9C. 27. Mirna Jiménez, “INSAFORP y FENASTRAS Abren Pequeño Centro de Capacitación para Jóvenes,” Diario Co-Latino, November 3, 2005. 28. These government figures can be unreliable. For example, workers who leave their jobs often remain on the union books and thus are still counted. In all other cases in this study, union membership was established through interviews with activists and employers. FENASTRAS refused to be interviewed for this study, so it was not possible to construct a database of its membership over time. 29. “FENASTRAS Acusa Ministra Bloqueo,” Prensa Gráfica, February 25, 2010. 30. Loida Martinez Avelar, “ ‘La Otra Marcha’ fue Ampliamente Vigilada,” Prensa Grafica, May 2, 2010. 5. Transnational Labor Networks in the Brazilian Auto Industry 1. A radical socialist tendency split from the CUT in 2003 and then a communist tendency split from the CUT in 2005. 2. Interview with author on August 17, 2005, São Paulo, Brazil. 3. This account of the Brazilian autoworkers’ trip to Detroit is based on Arbix (1996). 4. For the moderate metalworkers’ union of Union Force, joining the sectoral chamber was a relatively easy decision since it reflected the union’s identity based on cross-class collaboration. 5. Moreover, there were emerging differences among the auto firms regarding the benefits of the auto chamber agreements, which made its continuation even more difficult. 6. This lack of shop steward system is referred to as sindicalismo da porta da fabrica, or unionism that “stops at the factory gate.” 7. The full name of the union is the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America. 8. In concessionary bargaining, instead of improving wages and benefits, unions accept reductions in order to reduce cost and thus hopefully prevent plant closings. 9. Walter Reuther, one of the UAW’s founding members, was influential in establishing the union’s initial progressive and internationalist identity. As president of the UAW from 1946 to 1970, he supported the civil rights movement, opposed the Vietnam War, and encouraged transnational labor solidarity. Reuther was a strong supporter of the world automobile councils, and he believed in cross-border collective bargaining mechanisms to prevent auto companies from forcing workers in different countries from competing with each other (Lichtenstein 1995, 338–39). 10. These workers were distinguished by the red collar on their uniforms, so the strike was called the “red collar” (golas vermelhas) workers’ strike. 11. At the time, Ford had about fifty days of inventory in its car lot.

Notes to Pages 123–143

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12. Interview with author, Bahia, July 2002. 13. Ibid. 14. Marconi de Souza, “PM agride funcionários na montadora Ford,” CNM-CUT Internacional, April 2002. 15. No author. “Brazil’s Exports, Led by Ford, GM, VW.” Confederação Nacional dos Metalúrgicos da CUT, English ed., no. 3 (March 2003), 2. 16. The union at this plant, which maintained a strong left orientation, later decided to leave the CNM and thus the CUT. 17. At the same time, political differences were not uncommon within German unions. Conflicts existed between more moderate works councilors and leftist dissidents over how to conduct international solidarity work. The moderates even tried to expel the radicals and refused to provide financial support to their projects (Greer and Hauptmeier 2008, 82). 18. Quoted in Jornal da Comissão, Órgão Informativo de Commão de Fábrica dos Trabalhadores da Volks—Divisões Caminhões—SBC, no. 1 (February 1985)(Newsletter. No author. No title, p. 1). 19. Sanches, like Barbosa in Volkswagen, had studied German and eventually became fluent. This allowed him to develop particularly close personal relationships with his German counterparts. 20. With the selling of Chrysler in 2007, the company name became Daimler AG, and its car division was named Mercedes Benz Cars. 21. “Social Responsibility Principles of DaimlerChrysler,” International Metalworkers’ Federation, http://www.imfmetal.org/main/files/DC%20code%20in%20English.pdf (accessed August 2, 2010). 22. “Declaration on Social Rights and Industrial Relationships at Volkswagen,” International Metalworkers’ Federation, http://www.imfmetal.org/main/files/Sozialcharta_eng3l.pdf (accessed August 2, 2010). 23. One exception is the IFA signed between the International Textile, Garment and Leather Workers´ Federation (ITGLWF) and Industrial de Diseño Textil (Inditex). 24. Interview with Valter Sanches, São Paulo, August 17, 2005. 25. Author’s interview with Artur Henrique da Silva, secretary general, CUT, São Paulo, August 15, 2005. 26. Union Force also has opposed ratification of International Labour Organization Convention 87 precisely because it would allow for union plurality. 27. Author’s interview with Artur Henrique da Silva, secretary general, CUT, São Paulo, August 15, 2005. 6. Microcorporatism in Argentine and Brazilian Auto Plants 1. Left unionists attempted to regain control of the union on several occasions, but failed. Joaquinzão managed to form alliances with the more moderate sectors of the opposition and split the opposition unionists to his advantage. Once the union leadership no longer felt threatened by its left flank, it shifted to a more collaborative orientation, a position it since has maintained (Nogueira 1997). 2. Indeed, Union Force has been reported to have been founded with large contributions from the business sector. In March 1995, one of the advisors to Medeiros, Vagner Cinchetoo, testified that business interests close to the Collor government—including Alcoa, Leopoldina Cataguases, and Brasinca—made donations to Union Force between US$250,000 and US$300,000 (Gonzalez 2002, 18). 3. Paulinho was also an unsuccessful vice-presidential candidate in the 2002 national elections and an unsuccessful São Paulo mayoral candidate in 2004. Medeiros claims that he is not

188

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opposed to political activism on the part of unionists, but rather opposes party control of union organizations (Graciolli 1999). 4. Cleide Silva e Liliana Pinheiro, “Desvalorização garantirá emprego para 20 mil,” O Estado de São Paulo, January 20, 1999. 5. In part this was due to influence from the CUT unionists. While the union representing the workers in Ipiranga was affiliated with Union Force, members of the Ford-Ipiranga factory commission were sympathizers of the CUT. The left-oriented CUT unionists also became involved because the other two major Ford plants (in São Bernardo and Taubaté) were organized by the CUT, and the strategy of auto companies was to close old factories in the São Paulo region, where the unions were strong, and open them in distant greenfields. The closing of Ford-Ipiranga would affect not only the local workers, but union-management power relations at Ford throughout the country. Such base-level mobilization was the exception not the rule for the SMSP of Union Force. And when it did occur, as Adalberto Moreira Cardoso explains, Union Force still simultaneously supported the market-oriented reforms of the government. That is, for Union Force, “there is room for neoliberal alliances at the national level, and there is also room for tactical alliance with anti-neoliberal parties at the labor market level” (Cardoso 2000, 17). 6. Interview with author, December 13, 2001, São Paulo. 7. After the union was formed, it decided to break relations with Union Force and become independent. Yet it maintained its collaborative orientation, and the CUT union continued its efforts to displace it. 8. GM management denies that it intervened in the workers’ right to choose its representative (author’s interview with management, Gravataí, Rio Grande do Sul, December 9, 2002). 9. Interview with author, Resende, Rio de Janeiro, December 19, 2002. The manager told me that, in contrast, CUT union leaders were tougher negotiators, but that they had the capacity to convince their members to vote to accept the deal when they did agree to a management proposal. 10. Author’s interview with Volkswagen management, São Bernardo, December 17, 2002. The VW management made clear that this sort of exchange was unacceptable for the company. For obvious reasons, union leaders did not want to discuss this case. 11. This is the only case of purported union corruption at the plant level that I came across. In the press, Union Force leader Paulo Pereira da Silva (Paulinho) had been accused of corruption. For example, Paulinho was accused of negotiating deals with the private sector in which the union allowed companies to not pay certain fees for unemployment insurance in exchange for kickbacks. Additionally he was accused of negotiating a deal through which he received money from employers in exchange for allowing them to illegally fire workers who were injured on the job (Traumann, Furtado, and Mansur 2002). To my knowledge, these accusations were never proven in a court of law. 12. Interview with author, Resende, Rio de Janeiro, December 19, 2002. 13. Interview with author, São Paulo, January 29, 2002. 14. For much of the post–World War II period, UOM was the most powerful union in Argentina (McGuire 1997). 15. By the early 2000s, UOM only represented workers at Peugeot-Citroen. 16. In the 1990s and early 2000s, the deputy general secretary, Manuel Pardo, was the union’s main negotiator. However, Pardo did not participate in negotiations in Córdoba, where the union had a strong independent tradition and preferred to conduct negotiations with auto firms without the assistance of the national office of SMATA. 17. This prompted one plant manager to comment to me: “The relationship with the union is one of love and extortion” (La relación con el sindicato es de amor y extorción). Interview with author, Buenos Aires, November 2002. 18. Interview with author, Buenos Aires, October 28, 2002.

Notes to Pages 154–177

189

19. Ibid. 20. Ibid. 21. See also Larry Rother, “Ford Motor is Linked to Argentina’s Dirty War,” New York Times, November 27, 2002. 22. In more market-oriented, flexible labor contracts, labor is compensated in accordance with skill level and productivity, not seniority. 23. Interview with author, Pacheco, November 8, 2002. 24. Ibid. 25. Author’s interviews with workers and managers at GM, Rosario, October 31, 2002. 26. In traditional auto plants, most workers did not have a high school diploma. A difference with Brazil is that, while in the new plants women workers make up to 50 percent of the workforce, women workers only made up 10 percent of the workforce in this new Argentine plant. 27. Other problems included changes to the union social security system that allowed workers to freely choose which health care system to join. This had deleterious effects on SMATA, which, expecting the auto boom of the early 1990s to last for many years, had borrowed money to build new health care facilities. When the crisis hit the auto sector in the late 1990s, there were not enough workers using SMATA’s system to cover its expenses. The quality in SMATA’s services declined dramatically, and because workers could now choose which system to use, autoworkers increasingly chose to go elsewhere, making matters worse for the union. 28. Internationally most workers on a percentage system pay around 1 percent of their wages in union dues. The SMATA Córdoba chapter protested the increase to 5 percent and refused to have its members pay more than 2 percent. 29. Lucas Miguel y Vanina Wiman. September 18, 2002. “Ruckauf y el SMATA, comprometidosen la ‘eliminación de subversives’ ” Asamblea Permanente de Derechos Humanos (APDH), La Plata. http://www.apdhlaplata.org.ar/prensa/2002/180902.htm 30. Lucas Miguel. September 3, 2003; “Desaparecidos de Mercedes Benz: Otro Documento Vincula a Ruckauf y al SMATA,” Asamblea Permanente de Derechos Humanos (APDH), La Plata, http://www.apdhlaplata.org.ar/prensa/2002/111202.htm (accessed August 3, 2010). 31. “IMF EC member suspended,” International Metalworkers’ Federation, http://www.imf metal.rg/main/index.cfm?id=47&lid=2&cid=8082 (page discontinued August 3, 2010). 32. “Report of the Secretariat to the Central Committee of the IMF,” International Metalworkers’ Federation, December 2003, page 37, http://www.imfmetal.org/main/files/CC_2003_ english.pdf (accessed August 3, 2010). 33. Daniel Santoro, “José Rodríguez Fue Nuevamente Procesado: Otro Traspié Judicial del ex-Titular del SMATA por Fraude,” Clarín, August 6, 2009. 7. Conclusion 1. India, for example, felt that countries like the United States would charge it with violating child labor standards to block its exports via penalty fees. The goal of interested parties in the United States, in India’s view, would not be concern over child labor, but interest in eliminating competition from a large and successful developing country. 2. See Snow and Benford (1988, 198). 3. This term is used by Keck and Sikkink (1998) to distinguish labor from groups it labels as based on “principled-values.”

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Index

ACILS. See American Center for International Labor Solidarity (ACILS) Adidas, 67, 82–83 AFL-CIO, xiii, 13, 67, 70, 79, 97. See also American Center for International Labor Solidarity (ACILS) Agreement of Ouro Preto, 45, 153 AIDS treatment. See HIV/AIDS treatment AIFLD. See American Institute for Free Labor Development (AIFLD) Alfonsín, Raul, 10 Alianza Republicana Nacionalista (ARENA). See ARENA American Center for International Labor Solidarity (ACILS), 66, 67, 83 American Federation of Labor and Congress of Industrial Unions (AFL-CIO). See AFL-CIO American Institute for Free Labor Development (AIFLD), xiii, 13 Amitex factory, 102

“angry cow strike,” 114 anti-sweatshop activism, xvi–xvii, 17, 59–77 passim, 93–96 passim anti-union violence, xiv, xvi, 8, 10, 32, 150, 155, 159 apparel industry, 2, 5, 6, 18, 22, 84, 88, 168, 169, 178; codes of conduct, 75–77; El Salvador, xv–xvi, 24–26, 61–67, 74–75, 82–83, 96–109 passim, 167; Honduras, 33, 67–75, 83, 89–96, 104–10 passim, 167; import statistics, 59; trade rules and, 35–37; “triangle of power,” 80, 81. See also anti-sweatshop activism Arbix, Glauco, 116 ARENA, 8, 9, 53, 77–78, 89, 98; FENASTRAS and, 97, 103, 104 Argentina, 10, 11, 13, 168; auto industry in, 44–50, 139–40, 149–65 passim; economic crisis, 45–46, 159 Argentine Truth Commission, 159 Argentine Workers’ Center (CTA), 139–40

206

Index

Argueta, Evelina, 94 Asia, 120; “Asian Tigers,” 7, 27, 29; financial crisis, 45, 127, 144, 176; informal sector, 173 Authentic Labor Front (FAT), 11 auto imports: Brazil, 40; United States, 119 auto industry, 2, 5, 6, 15, 16, 18, 26–27; Argentina, 44–50, 139–40, 149–65 passim, 171–72; Brazil, 37–44, 111–38, 160–68 passim, 178; Canada, 133; modular production in, 37–50, 112, 117, 147, 153–54; Japanese firms, 118–19; new car models, 122, 124, 128, 170–71; South Africa, 130; U.S. firms, 117, 118, 134 Automotive Union of Mechanics and Related Trades (SMATA). See SMATA Autran Zacarias, 99 Ávila, Felícito, 107 Bahia, Brazil, 37, 41, 42, 121, 123–24, 183 n19 banana trade, 8, 13, 33, 55–56, 69, 78, 174 Bangladesh, 60 Barbosa, Mario, 126, 128, 132 Batista Cavalcente, João, 127 blacklisting of unionized workers, 34, 78 BMW, 134 bonuses, 25, 34 brand-name image, 60, 63 Brazil: auto industry in, 37–44 passim, 111–49 passim, 160–68 passim, 178; financial troubles of 1998, 159; labor laws, 9–11 passim, 113, 118, 123, 135, 136, 145; sectoral chambers, 115, 134, 153; state labor relations, 113, 115–17, 134–38, 149. See also Agreement of Ouro Preto Brazilian National Development Bank (BNDES), 183 Brazilian Workers’ Party. See PTB Bronfenbrenner, Kate, 3 “buy American” campaigns, 59 buyer-driven commodity chains, 15–19 passim, 28 cafeterias and dining rooms. See dining rooms and cafeterias Cambodia, 65 Canadian auto plants, 133 Canadian Auto Workers (CAW). See CAW Canadian unions, 112, 119–21 capital, 23

Cardoso, Adalberto, 144–45 Cardoso, Fernando Henrique, 117, 122, 142, 149 Caribbean Basin Initiative (CBI), 35, 36 Caribbean Basin Trade Partnership Act, 35, 36 CASH. See Certified Apparel Services of Honduras (CASH) Castells, Manuel, 3 Catholic Church, 14, 18, 89, 113 CAW, 119–21 CEAL, 66 CENFOTRAS, 104 Central American–Dominican Republic Free Trade Agreement (CAFTA-DR), 35 Central America solidarity movement, xii–xviii Central General de Trabajadores. See CGT (Honduras) Central Única dos Trabalhadores. See CUT Centro de Estudios y Apoyo Laboral. See CEAL Certified Apparel Services of Honduras (CASH), 72, 92 CGS, 96–97 CGT (Argentina), 149–51 passim, 160 CGT (Brazil), 135 CGT (Honduras), 89–96, 107–8, 110 Charter, 64 child labor, 60–61, 71–72, 133, 174, 189 n1 Chile, 178 China, 27, 36, 65, 75, 93 Christian Democratic Party (Honduras), 89 Chrysler, 130. See also DaimlerChrysler class-based labor identities, 12–13, 14, 53–54, 114; rejection of, 142, 156 Clean Clothes Campaign, 59, 80, 81 clientelism, 2, 18, 88, 102, 109 CNM, 114–15, 123 CNTS, 97, 98 codes of conduct, 75–77, 133, 169 coffee trade, 30, 33 Cold War, 13, 54, 67, 86, 89; end of, xv, 1–2, 14, 53, 114 collaborationism, 13, 15, 18–19, 87, 97, 115, 159. See also clientelism; microcorporatism collective bargaining, 31, 35, 65, 70, 72. See also pattern bargaining college apparel. See university apparel

Index Collor de Mello, Fernando, 115, 117, 187 n2 Colombia, 11 Comisión Nacional sobre la Desaparición de Personas. See Argentine Truth Commission commodity chains, buyer-driven. See buyerdriven commodity chains commodity chains, producer-driven. See producer-driven commodity chains Communist Party of Brazil, 141, 181 n7 communists, 181 n7 company cafeterias. See dining rooms and cafeterias company unions, 96, 110 concessionary bargaining, 119, 186 n8 Confederação Geral dos Trabalhadores. See CGT (Brazil) Confederação Nacional dos Metalúrgicos. See CNM Confederación General de Sindicatos. See CGS Confederación General del Trabajo (Honduras). See CGT (Honduras) Confederación General del Trabajo de la República Argentina. See CGT (Argentina) Confederación Sindical de Trabajadoras y Trabajadores de El Salvador. See CSTS Confederación Unitaria de Trabajadores de Honduras. See CUTH construction workers’ unions, 98 contracting out. See outsourcing contracts, 70. See also labor-employer pacts Coordinadora de Trabajadores de la Salud. See CNTS Coordinadora Social por la Dignificacion del Empleo en la Maquila. See COSDEMA Córdoba, Argentina, 47, 48, 150, 156–58 corporate social responsibility (CSR), 77, 170 corruption: in government, 9, 78, 136; in unions, 87–89 passim, 92, 100, 102, 172, 188 n11 COSDEMA, 57, 58, 63 Costa Rica, 134 cost of living, 30, 33 coups: Brazil (1964), 141; Honduras (2009), 9, 79, 107–8, 168 court cases, 83 Couto, Elder, 40, 42 CSTS, 63, 64, 67 CTA. See Argentine Workers’ Center (CTA)

207

Cuban revolution, 14 Curitiba, Brazil, 145 CUT, 114–15, 134–36 passim, 141–49 passim, 162, 163 CUTH, 54, 70–74 passim, 82, 83, 92, 94 DaimlerChrysler, 38, 45, 130–31, 133 Danish Confederation of Trade Unions, 71 Dateline, 60–61 death squads, 8 death threats, xvi, 62, 63 De Áviles, Victoria Maria Velásquez, 78 Democratic Party (United States), 59 Democratic Workers’ Party (Brazil). See PDT demonstrations. See protests and demonstrations Designated Suppliers Program (proposed), 76 de-skilling, 37 Detroit, 116, 122, 124, 167 El Diario de Hoy, 103 dictatorships, xvi, xvii, 13, 53; Argentina, 10, 125, 155; El Salvador, 96 dining rooms and cafeterias, 27, 42–43, 48, 156, 158 Do All Industries, 99–100 Doing Business (World Bank), 175 dollarization, 12 Dominican Republic, 60 Dornelles, Francisco, 127 dress codes, 48, 158 dues. See nonunion workers’ dues; union dues Dutch Trade Union Federation. See FNV duty-free market access, 35 Ecuador, 12 electrical workers, 108 El Salvador, xii–xvii, 8, 11; apparel industry, xv–xvi, 24–26, 61–67, 80–81; EPZs in, 29–32, 35, 59; state labor relations, 77–79; unions in, 53–67 passim, 74–78 passim, 96–109 passim, 167, 172 employee identity. See worker identity employee turnover and stability. See worker turnover and stability employer-labor pacts. See labor-employer pacts employment statistics: Argentina, 47; Brazil, 44, 45 EPZs. See export processing zones (EPZs)

208

Index

Esbenshade, Jill, 75–76 European Union, 132 European Works Councils Directive, 132 export processing zones (EPZs), xv, xvi, 6, 27–35, 179; labor laws and, 79; unionization in, 55–74 passim, 90–99 passim extortion, 103, 105 factory closures. See plant closures factory commissions, 147 factory dining rooms and cafeterias. See dining rooms and cafeterias factory mobility, 15–17 passim, 75 factory takeovers and occupations, 67, 144 Fair Labor Association (FLA), 76, 82, 83, 95 “fair share” dues. See nonunion workers’ dues fallen-arms strikes. See huelgas de los brazos caídos Farabundo Martí National Liberation Front. See FMLN fear of job loss, 64 FEASIES, 53, 64–65 Federación Independiente de Trabajadores de Honduras. See FITH Federación Nacional Sindical de Trabajadores Salvadoreños. See FENASTRAS Federación Unitaria de Trabajadores de Honduras. See FUTH Federación y Asociaciones y Sindicatos Independientes de El Salvador. See FEASIES Federatie Nederlandse Vakbeweging. See FNV FENASTRAS, 65, 97, 100–109 passim Fiat, 45, 48, 150, 151, 158, 162 firings. See termination of workers firm loyalty, 48, 158 “fishbowl” model of organizing, 68–71 FITH, 54, 79 FMLN, 53, 78, 101, 108 FNV, 71 Focus on Globalization (FOG), 66 Força Sindical. See Union Force Fordism, 5 Ford Motor Company: in Argentina, 44–49 passim, 150, 153, 155–56, 163; in Brazil, 37–42 passim, 116, 118–24 passim, 144–45, 162, 163, 183 n19; joint venture with Volkswagen, 153 foreign investment enticements, 30, 33, 117 free trade agreements and talks, 11, 59, 78, 79, 85

Frente Auténtico del Trabajo. See Authentic Labor Front (FAT) Frondizi, Arturo, 44 Funes, Mauricio, 78, 108 FUTH, 53–54, 79, 83 Gabo factory, 103 Galvão, Andréia, 114 Gap, xv–xvi, 15, 28, 55, 59–70 passim, 75 Garcia, Gilberto, 67 garment industry. See apparel industry General Confederation of Trade Unions (El Salvador). See CGS General Confederation of Workers (Brazil). See CGT (Brazil) General Confederation of Workers (Honduras). See CGT (Honduras) General Motors, 38; in Argentina, 44–49 passim, 152, 156–58, 163, 164; in Brazil, 41, 42, 145–46, 162, 163 general strikes, 141 Gereffi, Gary, 15 Germany, 117–18, 124–34 passim, 171 Gildan, 83 Glass, David, 60–61 Global Exchange, 59 global value chains (GVCs), 6, 15 GM. See General Motors government corruption. See corruption: in government government labor relations. See state and labor relations government loans, 41 Gravataí, Brazil, 41, 42, 145 GSP (Generalized System of Preferences) program, 70, 78, 79, 99 guaranteed monthly income, 158 Guatemala, 59 GVCs. See global value chains (GVCs) Haines, Herbert, 87 Hermosa Manufacturing, 67, 80–82 passim HERE. See Hotel Employees and Restaurant Employees (HERE) Hernández, Héctor, 58, 79 HIV/AIDS treatment, 121 Holland. See Netherlands home visits, 65, 68, 69, 99

Index Honduras, 8–9, 11, 13; EPZs in, 32–35, 67–74; unions in, 53–58 passim, 68–75 passim, 78–83 passim, 89–96, 104–10 passim Hotel Employees and Restaurant Employees (HERE), xii hour-bank system, 157 huelgas de los brazos caídos, 55 Huezo, Juan José, 100–101, 108 human rights movement, 125–26 Hu Ywa factory, 92 ICFTU. See International Confederation of Free Trade Unions (ICFTU) IG-Metall, 126, 130–31 ILO. See International Labour Organization (ILO) IMF. See International Metalworkers’ Federation (IMF); International Monetary Fund (IMF) Independent Federation of Honduran Workers. See FITH India, 189 n1 Indonesia, 65, 66 informal economic sector, 173–74 inspectors, workplace. See workplace inspectors Institution for Professional Training (INSAFORP), 104 International Confederation of Free Trade Unions (ICFTU), 102 International Finance Corporation (IFC), 176 international framework agreements (IFAs), 125, 131–34 International Labor Rights Fund, 79 International Labour Organization (ILO), 175; Convention 87, 135, 187 n26 International Metalworkers’ Federation (IMF), 121, 133, 148, 160 International Monetary Fund (IMF), 175 International Textile, Garment and Leather Workers’ Federation (ITGLWF), 60, 66, 71, 102, 184 n4 International Trade Union Confederation (ITUC), 175 International Union of Foodworkers (IUF), 174 Ipiranga, Brazil, 144 Irías, Ayax, 58, 79 Italy, 150

209

ITGLWF. See International Textile, Garment and Leather Workers’ Federation (ITGLWF) Japanese auto industry, 118–19 J. C. Penney, 72 Joaquinzão. See Santos Andrade, Joaquim dos job loss, fear of. See fear of job loss job stability. See worker turnover and stability Just Garments, 67 just-in-time production, 3, 48 Kathie Lee Gifford clothing line, 76 Kearney, Neil, 66, 103, 184 n12 Keck, Margaret, 3 Kernaghan, Charlie, 72, 73 Kimi, 69–70, 184 n14 Kmart, 25, 26, 73 Korean-owned factories, 69 Kraus, Uwe Ernst, 127–28 Kubitschek, Juscelino, 39, 124 labor-employer pacts, 2, 4, 15, 18, 88, 158; FENASTRAS and, 97, 102, 103, 109; SMATA and, 152, 158, 159 labor laws, 7–11 passim, 77–79 passim, 88; Argentina, 153–54, 161, 165, 171; Brazil, 9–11 passim, 113, 118, 123, 135, 136, 145; EPZs and, 29, 57; liability and, 77. See also minimum wage labor relations and state. See state and labor relations labor rights, 7, 70; IFAs and, 133, 134; women’s, 57 labor rights monitoring, 63, 70, 75–76, 78, 133, 136, 184 n8, 184 n14 labor transnationalism. See transnational labor networks (TLNs) labor turnover and stability. See worker turnover and stability language learning, 137, 187 n19 laws. See labor laws layoffs, 128, 154 left-flank mechanism. See radical flank mechanism letter-writing campaigns, 59, 63, 66, 80 liberation theology, 14, 89 living wage, 76 Liz Claiborne, 28, 55

210

Index

lock-ins, 82 LO-Denmark. See Danish Confederation of Trade Unions LO-Norway. See Norwegian Confederation of Trade Unions López Arellano, Oswaldo, 9 loyalty to firms. See firm loyalty Lula da Silva, Luiz Inácio, 9–10, 113, 134–38 passim, 147, 149 Lupi, Carlos Roberto, 149 Mandarin International, 61–66 passim, 99 Manrique, Mario, 150 “maquila” (word), 182 n9, 183 n14 Maquila Solidarity Network (MSN), 59, 82, 83 Marinho, Luiz, 122, 128 market-based labor identities, 12 Marques da Silva, Rafael, 118 Marx, Karl, 5, 23 McAdam, Doug, 87 Meany, George, 13 Medeiros, Luís Antônio de, 142, 143, 187–88 n3 media campaigns, 62, 70 Menem, Carlos, 10, 44, 157 Mercedes Benz, 49, 111, 129–31, 150, 159, 162, 163 metalworkers, 41, 44, 113–15 passim, 122–24 passim, 141–49 passim; Germany, 126, 130–31 Metalworkers’ Union of São Paulo (SMSP), 141–43 passim Metalworkers’ Union of the ABC Region (SMABC), 115, 122 Mexico, 11 MFA. See Multi-Fiber Agreement (MFA) microcorporatism, 2, 18, 19; Argentina, 140–41, 149–60; Brazil, 139, 141–49 middle managers’ wages, 30 minimum wage, 7; El Salvador, 25–26, 30; Honduras, 33–34, 79 MNCs. See multinational corporations (MNCs) modular production, 6, 16, 27; in auto industry, 37–50, 112, 117, 147, 153–54, 171 Molina, Sarahi, 100 monitoring of labor conditions. See labor rights monitoring

monopoly, 26. See also unions: monopolies of monopsony, supply-chain. See supply-chain monopsony Movement of Trade Union and Organizational Unity of El Salvador (MUSYGES), 108 Multi-Fiber Agreement (MFA), 36 multinational corporations (MNCs), 6, 15, 16, 23, 26–27, 90. See also transnational activist campaigns (TACs) MUSYGES. See Movement of Trade Union and Organizational Unity of El Salvador (MUSYGES) NAFTA, 11 Nasser, Jacques, 122 National Confederation of Salvadoran Workers. See CNTS National Federation of Salvadoran Unions, 100 National Labor Committee (NLC), 59, 62–63, 68, 72, 73, 83, 184 n14 National Labor Forum (Brazil), 135 National Metalworkers’ Confederation (Brazil). See CNM National Party (Honduras), 89, 107 National Republican Alliance (El Salvador). See ARENA (National Republican Alliance) negotiations, 66, 152. See also collective bargaining; free trade agreements and talks Netherlands, 71 NGOs. See nongovernmental organizations (NGOs) Nicaragua, 83, 174 Nicotex, 83 Nieto, Jorge, 30 Nike, 15, 28, 59, 67, 82, 83 Nissan, 145, 163 NLC. See National Labor Committee (NLC) nongovernmental organizations (NGOs), xv, 76, 82; Central American, 74, 75, 106, 107 nonunion workers’ dues, 9, 158, 159 North American Free Trade Agreement. See NAFTA North-South relations, 85 Norway, xiii–xv passim Norwegian Confederation of Trade Unions, xiii–xiv, 174 No Sweat Apparel, 67

Index Odenheimer, Werner, 40 Oliviero, Ramon, 155–56 Ouro-Preto Accord. See Agreement of Ouro Preto outsourcing, 5, 6, 15, 23, 28, 38, 50, 170; vertical, 16, 17. See also modular production overproduction, 112 overtime, 34, 138; mandatory, 16, 28, 61, 64 Pacheco, Argentina, 155–56 Pardo, Manuel, 152 Partido Democrático Trabalhista. See PDT Partido dos Trabalhadores. See PT Partido Justicialista (Brazil), 10 Partido Trabalhista Brasileiro. See PTB pattern bargaining, 152 Paulinho. See Pereira da Silva, Paulo pay. See bonuses; salaries; seniority pay; severance pay; wages PDT, 143, 149 Pereira da Silva, Paulo, 143, 187 n3, 188 n11 Perón, Juan, 10, 13, 150 peso (Argentina), 45 Peugeot Citroën. See PSA Peugeot Citroën Phillips, Carol, 120 Phillips Van Heusen, 59 plant closures, 133, 144, 168, 169 plant mobility. See factory mobility plant takeovers and occupations. See factory takeovers and occupations “popcorn strike,” 113–14 populism, 13 Porto Alegre, Brazil, 41, 145–46 prisoners and imprisonment, xii, xiv, 8, 10, 59, 101 privatization, 29, 114, 149, 173 producer-driven commodity chains, 15–19 passim, 167 production, modular. See modular production production quotas, 25, 26, 34, 61 productivity and salaries, 157, 165 protectionism, 152 protests and demonstrations, 54, 55, 60–62 passim, 66, 69, 83, 117, 144 PSA Peugeot Citroën, 134 PT, 121, 136, 143, 149 PTB, 143 Public Services International (PSI), 173 Puerto Cortés, Honduras, 33

211

quotas. See production quotas radical flank mechanism, 18, 19, 86–110, 143, 151 Ramos, Alejandro, 67 re-exportation, 6 Regini, Marino, 143 rehiring, 63, 64, 66, 70, 95, 134 Reich, Robert, 76 Renault, 45, 134, 145, 163 repression, 181–82 n7. See also anti-union violence; torture Resende, Brazil, 38, 40, 42, 146–48 retailers, 15, 16, 24, 60; EPZs and, 28. See also Kmart; Target; Wal-Mart Reuther, Walter, 186 n9 Rodríguez, José, 150, 159, 160 Rosario, Argentina, 46, 47, 49, 156–58 rubber tappers, 178 Ruckhauf, Carlos Federico, 159 Russell Athletic, 82, 94 Saca, Elías Antonio, 30 Saipan, 59 salaries: Argentine tripartite pacts and, 152; inflation-based adjustments in Brazil, 116; as percentage of production costs, 30; of Salvadoran workplace inspectors, 77–78; tied to productivity in Argentina, 157, 165 Sale City Manufacturing, 72 sale price, 24 Salgado, Suyapoa, 72 San Bartolo, El Salvador, 29, 98 Sanches, Valter, 111–12, 115, 129, 130, 133–34 S&C Apparel, 99 San Pedro Sula, Honduras, 55, 75, 90 Santos Andrade, Joaquim dos, 141–42 São Bernardo, Brazil, 111, 112, 116, 118, 123–29 passim, 144, 162 Sarney, José, 115 Scania, 162 school buses, 62 security guards, 27 seniority pay, 155 severance pay, 65, 82–84 passim, 102, 109, 172, 175 sexual harassment, 57, 178 shaming, 60–61, 70, 83

212

Index

Sikkink, Katherine, 3 Silver, Beverly, 3 Sindicato de Mecánicos y Afines del Transporte Automotor. See SMATA Sindicato de Trabajadores de Industrias Textiles. See STIT Sindicato dos Metalúrgicos de São Paulo. See Metalworkers’ Union of São Paulo (SMSP) Sindicato dos Metalúrgicos do ABC. See Metalworkers’ Union of the ABC Region (SMABC) slowdowns. See work slowdowns SMABC. See Metalworkers’ Union of the ABC Region (SMABC) SMATA, 140, 150–63 passim Smith, Adam, 5 SMSP. See Metalworkers’ Union of São Paulo (SMSP) social responsibility of corporations. See corporate social responsibility (CSR) social security, 160, 161 society-based labor identities, 12 solidarity strikes, 130–31, 138, 155 Somoza, Anibal, 96–97 South Africa, 120, 121, 130 South-North relations. See North-South relations Star factory, 83 state and labor relations, 7–11, 14–15, 77–79, 84–85, 172; Argentina, 44–45, 151–53 passim; Brazil, 113, 115–17, 134–38, 149. See also labor laws STIASSYC, 98–100 STIM, 123 STIT, 65 strikes, 6, 7, 32, 54, 55, 105–6, 156, 177; apparel workers’, 70, 74, 75, 92, 107; auto workers’, 42, 113–14, 118–30 passim, 134, 138, 146, 153, 155, 171; banana workers’, 8–9, 13, 78; legislation and, 9, 77. See also “angry cow strike”; general strikes; huelgas de los brazos caídos; “popcorn strike”; solidarity strikes sugar trade, 22 Superior Council of Work (El Salvador), 108 supply-chain monopsony, 26, 30 sweatshops, 16, 28. See also anti-sweatshop movement TACs. See transnational activist campaigns (TACs) Tainan Enterprises, 64–66

Taiwan, 61, 65, 66 Target, 15 tariffs, 40, 44, 59. See also duty-free market access taxation, 116, 152; exemptions, 27, 35, 183 n19 teamwork, 43, 47, 129–30, 151, 156, 157 Tegucigalpa, Honduras, 55 termination of workers, 54, 55, 61, 62, 69, 83, 121, 134, 155; World Bank and, 175. See also fear of job loss; layoffs; rehiring Thailand, 76 Tilly, Charles, 3 TLNs. See transnational labor networks (TLNs) torture, xiv, xv, 8 Toyota, 45, 48, 49, 151, 158, 162, 163 Trade Union Confederation of Salvadoran Workers. See CSTS transnational activist campaigns (TACs), 1, 16–18 passim, 52–53, 59–75, 80–85, 104–10 passim; CGT and, 92–95 passim transnational labor networks (TLNs), 2, 15–17, 19, 111–38, 148, 155 Turkey, 134 Turner, Lowell, 3 UAW, 116, 118, 121, 186 n9 uniforms, 48 union busting, 31, 54, 62. See also anti-union violence union dues, 159, 160, 189 n28 Union Force, 123, 135, 136, 142–49 passim, 162, 163, 187 n26; corporate donations to, 187 n2 unionization rates, 50; Argentina, 49, 158, 161, 163–64; Brazil, 41, 43, 161, 162–63; El Salvador, 31–32; Honduras, 34, 35 Unión Obrera Metalúrgica. See Union of Metalworkers (UOM) Union of Metalworkers (UOM), 150, 162 unions, 53–58 passim; Argentina, 45–49 passim, 139–40, 149–60, 168; Brazil, 111–49 passim, 167–68, 178; Canada, 112, 119–20; El Salvador, 53–67 passim, 74–78 passim, 96–109 passim, 167, 172; Germany, 118, 126; Honduras, 53–58 passim, 68–75 passim, 78–83 passim, 89–96, 104–10 passim, 167; monopolies of, 10, 158; radical flank mechanism and, 18, 19, 86–110; Spain, 121; statistics, 31–35 passim, 41–44 passim, 49–51

Index passim, 74–75; United States, 60, 118–20 passim, 122, 124; women and, 56–57. See also anti-union violence; company unions; construction workers’ unions Unitary Federation of Honduran Workers (FUTH). See FUTH UNITE, 60, 66–71 passim United Auto Workers. See UAW United Confederation of Honduran Workers (CUTH). See CUTH United Students Against Sweatshops, 60, 82, 95 university apparel, 60, 76, 95 UOM. See Union of Metalworkers (UOM) U.S. Agency for International Development (USAID), 27, 29 U.S. Department of State, xiii U.S. Guatemala Labor Education Project, 59 U.S. Labor Education and Action Project (USLEAP), 59, 66, 79 U.S. Trade Representative, 70 Vargas, Getulio, 9, 141 Velásquez, Febe Elizabeth, xiv Vietnam, 59 Villalobos, Joaquin, 101 Volkswagen: in Argentina, 46–47, 49, 153–55, 163, 171-72; in Brazil, 38–43 passim, 122, 124–29, 145–48 passim, 162, 163; joint venture with Ford, 153; World Group Council of, 132 Volvo, 145, 163 wages, 6, 15–16, 22–24 passim, 50, 51; Argentina, 48–49, 152, 154; Brazil, 37–39 passim, 42, 113, 123, 124; El Salvador, 30–32 passim, 64; Honduras, 33–34. See also living wage; middle managers’ wages; minimum wage Wal-Mart, 15, 26, 28, 60–61 WCL. See World Confederation of Labour (WCL)

213

welfare, 10 Winners factory, 92 women’s groups, xvi, xvii, 16, 53, 57, 94, 99–100, 105–7 passim, 110, 182 n11 women workers, 14, 16, 22, 29, 33, 37, 57, 178; in auto industry, 37, 38, 189 n26; NLC and, 59; unions and, 56–57, 90–91, 100, 182 n11 worker blacklisting. See blacklisting of unionized workers worker identity, 43, 48, 49–50. See also classbased labor identities worker lock-ins. See lock-ins worker rights. See labor rights Worker Rights Consortium (WRC), 76, 82, 83, 95, 96 Workers’ Party (Brazil). See PT worker termination. See termination of workers worker turnover and stability, 16, 17, 28, 34, 137, 142, 152, 183 n17 workplace inspectors, 77–78, 79. See also labor rights monitoring works councils, 16, 125–34 passim, 144 work slowdowns, 74, 75, 107 workweek, 127 World Bank, 27, 175–76 World Confederation of Labour (WCL), 89, 91, 93 World Trade Organization (WTO), 36, 75, 173, 174–75 WRC. See Worker Rights Consortium (WRC) WTO. See World Trade Organization (WTO) Yesan factory, 98 Yoo Yang factory, 71 young workers, 22, 33, 48, 55, 58, 59, 69, 158, 185 n3. See also child labor Yussuf, Hassan, 120 Zelaya, Manuel, 9, 79, 107