Keep Us Strong WikiLeaks logo

Currently released so far... 64621 / 251,287

Articles

Browse latest releases

Browse by creation date

Browse by origin

A B C D F G H I J K L M N O P Q R S T U V W Y Z

Browse by tag

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Browse by classification

Community resources

courage is contagious

Viewing cable 06CAIRO7256, EGYPT LABOR STRIKES FORCE GOE CONCESSIONS

If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs
Reference ID Created Released Classification Origin
06CAIRO7256 2006-12-28 13:40 2011-08-24 16:30 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Cairo
VZCZCXYZ0001
RR RUEHWEB

DE RUEHEG #7256/01 3621340
ZNR UUUUU ZZH
R 281340Z DEC 06
FM AMEMBASSY CAIRO
TO RUEHC/SECSTATE WASHDC 3060
INFO RUEHC/DEPT OF LABOR WASHDC
RHEHNSC/NSC WASHDC
UNCLAS CAIRO 007256 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR NEA/ELA, DRL 
LABOR FOR ILAB 
NSC FOR WATERS 
 
E.O. 12958: N/A 
TAGS: ELAB ECON PGOV EG
SUBJECT: EGYPT LABOR STRIKES FORCE GOE CONCESSIONS 
 
 
Sensitive but unclassified. Not for internet distribution. 
 
------- 
Summary 
------- 
 
1.  (SBU) Seeming to catch the GOE off-guard, a major strike 
crippled one of Egypt's largest textile companies this month, 
successfully extracted financial concessions from the company 
and GOE, and encouraged spillover strikes.  While the Muslim 
Brotherhood (MB) was happy to jump on the workers' bandwagon, 
it does not appear to have had any hand in stirring up the 
protest, despite official GOE accusations.  End summary. 
 
---------------------------------------- 
Major Strike in the Industrial Heartland 
---------------------------------------- 
 
2. (U) Large-scale labor protests shut down some of Egypt's 
premier industrial centers in recent weeks.  On December 7, 
17,000 night-shift workers at the state-owned Misr Al Mahalla 
Textile Company stopped production over the company's refusal 
to pay a two-month salary bonus, as promised by the Prime 
Minister in a government decree.  Also prominent among worker 
complaints were charges of corruption against newly-appointed 
Chairman Mahmoud El-Gibaly, who workers accuse of squandering 
company revenues while lining the pockets of his coterie. 
 
3. (U) The company and GOE argued that the workers were not 
entitled to the bonuses as the company was not in a sector 
covered by the decree, and, according to company Chairman 
Mahmoud El-Gibaly, the company did not post a profit. 
El-Gibaly and the GOE initially refused worker requests to 
negotiate and disputed worker claims of corruption within in 
the company, saying the company was carrying too much debt to 
pay bonuses equal to LE26 million (USD 4.5 million). 
Secretary General of the Textile Union, Fathi Naamatallah, 
 
SIPDIS 
contended the company's own records show a profit of LE 70 
million (USD 12 million) and that production has been rising 
steadily. 
 
4. (U) The following day, day-shift workers joined the strike 
and occupied the factory and an adjacent street.  As the 
strike progressed, the number of workers involved grew to an 
estimated 27,000 to 54,000, including 4,000 women.  Security 
services were quickly on the scene, but did not attempt to 
forcibly break up the strike.  They did, however, cut power 
and water to the factory in an attempt to force the striking 
workers out.  The GOE closed the factory December 9 as 
negotiations between the workers and company management 
continued. 
 
5. (U) According to reports, the GOE initially refused to 
negotiate, but pressure from Al Mahalla-area MP's prompted 
Minister of Manpower Aisha Abdel Hady and Minister of 
Investment Mahmoud Mohieldin to intervene.  The government's 
initial offer pledged a payment of a 21-day bonus, and Abdel 
Hady announced that an agreement had been reached.  The 
workers refused the offer, however, citing the upcoming Eid 
Al-Adha holiday, rising food prices, and their dependence on 
the full bonuses to make ends meet.  As the strike reached 
its third day, the workers accepted the government's offer of 
the 21-day bonus, to be supplemented by an additional bonus 
of LE89 (USD 16) and a half-month's salary to be paid in 
January.  The strike dispersed peacefully and the company has 
resumed full operations. 
 
--------------- 
MB Involvement? 
--------------- 
 
6. (SBU) GOE statements reported in the government-owned 
press insinuated MB involvement in stirring up the protests. 
The NDP issued statements requesting that its 
parliamentarians lodge formal inquiries to determine whether 
the MB was involved.  However, labor activist contacts, 
including members of a visiting Solidarity Center team, 
discounted the MB's role, telling us the grievances did not 
require stoking by the MB. 
 
7. (U) An MB-affiliated MP from the Al-Mahalla district, Saad 
Al Husseini, said in an online interview on December 7 that 
El-Gibali's practices as alleged by the workers confirm the 
spread of corruption and nepotism within Egyptian government 
structures, and that a small group of cronies had seized what 
was due to the workers.  The MB used its website to echo 
worker accusations that El-Gibali appointed under-qualified 
associates to posts ranging from the company's social club 
Board of Directors to key committee positions in purchasing 
and marketing, and siphoned profits to himself and his 
supporters.  Al Husseini urged the workers to demand their 
full rights and take all "legal and legitimate" means to 
achieve them.  Al Husseini said he would lodge a formal 
inquiry with the People's Assembly about the worker's 
accusations. 
 
----------------- 
Spillover Strikes 
----------------- 
 
8. (U) Perhaps bolstered by the success of the Al Mahalla 
strikers, over 1,700 workers in the Helwan Cement Factory 
launched a sit-in strike in protest of management's refusal 
to implement salary increases and pay yearly bonuses. 
Additionally, 4,000 workers in the Al-Nasr Dye Company in 
Gharbiyya province took part in a sit-down strike, demanding 
yearly bonus payments in advance of the upcoming Eid Al-Adha 
(Great Bairam) holiday. 
 
------- 
Comment 
------- 
 
9. (SBU) The size of the Misr Al Mahalla strike and worker 
rejection of the initial GOE offer seemed to have caught the 
GOE and national trade union federation (ETUF) off-guard.  It 
is unlikely the MB had anything to do with the protests, but 
the MB does appear to have happily jumped on the bandwagon to 
burnish its credentials in a sector in which it has 
traditionally been weak.  By seeking to highlight the alleged 
nepotism and corruption within the company, the MB also 
perhaps recognized an easy opportunity to draw parallels with 
the Presidency. 
RICCIARDONE