Mexican Worker-Run Tire Factory a Success

Story Transcript

OSCAR LEÓN, PRODUCER, TRNN: Blackstone tires is one of the main players in the giant Mexican tire market, exporting their own brands to many Latin American countries and United States. They also make tires for North American manufacturers, competing in quality and price with Chinese and Indian companies.

Many attribute the factory’s success to the fact that it’s run and administered by their workers.

Founded in 1935, The Euskadi factory in Jalisco originally produced shoes, later became a successful tire industry, providing work and resources to many local residents.

In early 1971, managed by a Spanish-American capital enterprise, Euskadi Industries inaugurated a new revamped factory, then the most modern in Mexico. This brand new privately run factory contrasted with Euskadi’s worker union, one of Mexico’s most radical: Euskadi’s National Revolutionary Union.

Despite its origins the union remained independent from political parties. Its members made decisions democratically and enjoyed collective contracts featuring workers protections, health care, and fair wages.

Carlos Slim, who according to Forbes is now the world’s richest man, acquired in 1992 the factory from its original owners. In 1998, following a wave of mergers and acquisitions of small industries by big capital groups and corporations looking to monopolize the market, Euskadi was finally sold to Continental Tire.

The relationship between Slim and the union was not the best from the beginning. However, when he sold the factory, things turned for worst. In order to maximise profits and minimize costs, Continental demanded longer hours, less pay, and decided to take benefits away from the workers. To achieve this, the German Group proposed a new collective worker contract after acquiring the factory.

In 2001, tensions came to a boil. Continental’s management ordered a massive layoff of about 1,600 workers. The union responded with a general strike.

Despite the support of the Mexican Government, management was unable to break the picket lines and judicial appeals to the layoffs. Production came to an halt.

Jesus Torres is a former union leader. Now he is the manager of the factory.

JESUS TORRES, FORMER UNION LEADER, FACTORY MANAGER (SUBTITLED TRANSL.): If you are watching this in U.S. or Europe, you may not understand how is it possible that Continental couldn’t lay off people even when willing to pay economic compensation for it. Well, they couldn’t due to a principle of worker stability in Mexican law preventing illegal or unreasonable layoffs unless there is a good and lawful reason, and they didn’t have one.

All that changed when Enrique Peña Nieto recently passed a reform to the labor laws, a very damaging one for the workers and unions. So in November 16, 2001, in the general assembly, the possibility of accepting the money and closing the factory was discussed, just like what happened with two tire factories before ours, Good Year Oxo and Uniroyal-Michelin. In those two factories the workers were not organized. They took the compensation money and they were sent home defeated.

In our case in Euskadi, we decided we would take a very different path and fight the multinational and our government, which supported it. We needed to find a way to fight such a multinational corporation that also had the full support of the federal and state government. After all, we were only about a 1,000 workers.

LEÓN: Continental closed the factory in January 22, 2001. The workers mounted picket lines and blockaded the gates of the factory to prevent the transnational group from removing the equipment from the building. The government then declared the strike illegal.

In response, the union members decided to implement a strategy for community outreach to other unions and student and farmer groups. Euskadi’s Union organized a tour in 11 buses and many private cars, taking almost all of the factory workers around many cities and towns towards Mexico capital city. During that week the Euskadi Union Workers held rallies with thousands of peoples from other unions and groups in cities like San Luis de Potosi, Silao-Guanajuato, Puebla, Hidalgo, Aguascalientes, and of course San Salvador de Atenco.

JESUS TORRES (2006 RALLY): We are sick and tired of watching our jobs disappear in an irrational and unjust manner.

LEÓN: They then organized another tour in many countries in Europe like Germany, Italy, Spain, and France gathering the support of some local worker unions.

TORRES: We decided to make a strategic plan using all the judicial resources, but most importantly we know that the key to defeat a transnational like Continental, it was the political arena.

So we went to Germany. That was our move, and it was a successful one. I think it is a unique moment in international history, because at the end of the day, after three years of going to Continental’s shareholders assembly to demonstrate and speak out, we won. We did so because we became a Continental shareholder. That way we were able to negotiate with them. We did so, however, without the local Continental workers unions’ help, who saw us as a competition. They thought that if we succeeded, they would lose their jobs. Ironically, we had warned them that if they wouldn’t unite with us in a big front, their high costs will cause the local factories to close, and that is precisely what happened.

LEÓN: Six hundred and four from the original 971 workers managed to stay in strike for four years. With the help of their families and friends they stayed in an active fight.

TORRES: During this process, Continental tried to bribe our leadership. They offered me a million dollars in exchange of letting them enter and empty our tire deposit, which would have been a hard blow to our union and any hope to revive this factory. That would have meant our defeat because most people would have accepted the compensation money and the definitive closing of the factory.

LEÓN: The loyalty and accountability of the union leadership, who did as the general assembly decided every time, added to the compromise and belief on their principles by the workers. This resulted in an unprecedented support by other unions, movements, and NGOs around the country and the world.

TORRES: An important factor in this fight was our family support. You must know that we had to endure a very hard situation, because not only we were prohibited to work since we were on strike, but also our wives and sons, who had to assume the economic responsibility of the house, were put on a blacklist. So it was almost impossible for them to work on any of the 50 factories in the area. All of our names were on the blacklist.

We had to endure devastating economic conditions, but we did so motivated by the chance to defend our dignity as workers.

LEÓN: Finally, in 2005 the Euskadi workers succeeded. Not only did they get all the compensation money due to them for their long strike, they also took the ownership of the factory, partnering with Llanti Systems, a local automotive company, to run the factory.

The workers were successful in managing the company, and their business expanded. They encouraged productivity and kept executive pay low.

For example, former union leader Jesus Torres, who now manages the factory, makes as much as other workers with high qualifications and experience.

The union became known as Western Democratic Workers, or TRADOC for these letters in Spanish, and they have been successful. Blackstone, their tire brand, is one of Mexico’s top 4.

However, this year will be the first one the workers-shareholders collect their yearly dividends, the money corporations give every year to shareholders, this because they have been investing in modernizing the factory since they acquired control of it.

TORRES: We believe that the biggest lesson from our fight is that if workers are organized democratically, they can fight against a transnational corporation, they can fight and win.

LEÓN: The fight was taken to the next level by successfully managing the business, breaking the stereotype of suit-and-tie top-down capitalism and making a new successful example of a worker-managed industry, a model that has been already replicated in many countries in North and South America, as well as in Europe. as a matter of fact in Caracas, Venezuela, 2005, there was a world meeting of workers-recovered factories and business. Two hundred and sixty-three delegations attended and signed a declaration called the Caracas Commitment.

Unsurprisingly, their story, along with others of worker-managed businesses, gets little attention in the mainstream media. Perhaps this is because they have successfully challenged the relationship between workers and management.

Reporting from The Real News, this is Oscar León.

End

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