Confronting Globalization: Lessons from Puebla

There is widespread debate about the best ways to protect worker rights under globalization and avoid a race to the bottom in job quality. Recent experiences with multinationals in the important industrial state of Puebla, Mexico shed important light on this debate. Globalization naturally affects tradable industries the most, and we examine cases in Mexico's two most important manufacturing export industries—apparel and auto. We identify two main ways—which we term solidarity-led and companyled—that workers have successfully won recognition of their rights. However, the experiences of workers in Puebla also point to severe limitations of both strategies in an environment that is fundamentally hostile to worker rights.

Mexico is unique in Latin America in that it has one of the strongest bodies of labor law (on paper) in the region; but there are also the problems of deficient state enforcement capacity and weak unions that are seen in poorer countries. This context has opened a space for new actors and the use of alternative approaches to protect labor that extend beyond conventional government-based policies. The state of Puebla is ideal for observing the impact of alternative strategies because it has been an "authoritarian enclave," tightly controlled by the Institutional Revolutionary Party (PRI) that governed Mexico for seventy-five years—so the government does little to enforce labor rights and, indeed, often impedes their exercise. Case studies demonstrate that under certain conditions, other factors can help counteract such political challenges. The focus here is on two key cases, Mexmode and Volkswagen, that illustrate broader patterns in Puebla and, indeed, throughout Mexico.

Solidarity-Led Strategies

In the case of apparel manufac-turer Mexmode (formerly known as Kukdong), a contractor to Nike and Reebok, activists successfully pieced together a complex, solidarity-led strategy.¹ National and international activists aimed their fire at both multinational and local authorities. They were able to achieve the recognition of a new, democratic union through which the workers took control of the collective bargaining contract. How did they win?

Sweetheart contracts are common in Mexico, and Mexmode was no exception. The exceptional circumstance was that workers, mostly young women, got so sufficiently fed up with a corrupt union, physical abuse, worm-infested cafeteria food, and the firings of workers who protested that they walked out en masse in January 2001. Though police attacked and dispersed the strikers, student anti-sweatshop activists from the U.S., a major market for Mexmode's output, rallied in solidarity, targeting Nike. Worker rights-monitoring organizations sent delegations to visit the plant. Nike soon felt the heat and put pressure on Mexmode's management. By the end of February most strikers had been reinstated, and by September the workers had a democratically elected union.

In the Mexmode case, private action in the form of international solidarity trumped government inaction. Puebla's PRI government had ties with the original, unrepresentative union. Neither national nor state government intervention, nor action through the North American Agreement on Labor Cooperation (NAALC, NAFTA's labor side agreement) secured a democratic union. Instead, international pressure on both the Mexmode company (through Nike) and the state government made the difference. Indeed, the Puebla Conciliation and Arbitration Board didn't even recognize the new union until it had the backing of the company! The key pressure point was Nike, the highly visible—and therefore vulnerable—brand sitting atop the supply chain.

Company-Led Approaches

Though solidarity-led strate-gies make for great headlines, victories are few and far between. The track record in Puebla suggests that company-led labor guarantees may have broader effects. The giant Volkswagen plant in Puebla and its supply chain are a case in point. Because Volkswagen is unionized on its German homebase—and in a number of other countries—it is both relatively willing to deal with real unions and subject to pressure from real unions in other countries. Volkswagen Mexico needs skilled workers who are not easily replaced (unlike the Mexmode workforce) and its production process is capital-and technology-intensive, so that labor cost is a lower proportion of the total (around 5...