VZCZCXYZ0000
OO RUEHWEB

DE RUEHEG #2983 2811505
ZNR UUUUU ZZH
O 081505Z OCT 07
FM AMEMBASSY CAIRO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7114
INFO RUEHC/DEPT OF LABOR WASHDC

UNCLAS CAIRO 002983 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR NEA/ELA (NAFZIGER) AND DRL/IL (ANZALDUA) 
LABOR FOR ILAB (SHEA) 
 
E.O. 12958: N/A 
TAGS: ELAB ECON PGOV PINR EG
SUBJECT: LABOR UNREST IN NILE DELTA SUBSIDES AFTER DEMANDS 
ARE MET 
 
REF: CAIRO 2887 
 
¶1. (U) Striking workers at Egypt,s largest public-sector 
textile factory resumed work October 1, after successfully 
extracting concessions from GOE representatives.  Over 24,000 
workers from the Ghazl el Mehalla factory in the Nile delta 
city of Mehalla el Kubra walked off the job on September 23 
in protest over unpaid bonuses, wage stagnation, and job 
security fears.  The protest, which was not approved by the 
government-controlled Egyptian Trade Union Federation (ETUF) 
and therefore illegal, followed wildcat strikes at the 
factory in late 2006 that led to a string of similar protests 
throughout Egypt.  Similarly, this successful strike has 
sparked two additional walk-offs. 
 
¶2. (U) Messages of solidarity with the Ghazl el Mehalla 
workers poured in from major international trade unions, 
including South Africa Congress of South African Trade Unions 
(COSATU), the International Textile, Garment and Leather 
Workers, Federation (ITGWLF), and the International 
Confederation of Arab Trade Unions (ICATU) among others.  The 
International Trade Union Confederation (ITUC) also sent a 
letter to President Mubarak in support of the workers and 
condemning the detention of five strike leaders by security 
forces (reftel).  Workers at some other Egyptian 
public-sector firms joined in illegal solidarity strikes as 
well. 
 
¶3. (U) The striking workers, whose salaries average around LE 
400 (USD 71) per month, negotiated their settlement with a 
GOE-assembled team lead by ETUF head Hussein Megawer that 
included factory holding company chairman Mohsen El Gilany, 
local union committee head Said el Gohary, and local MP from 
Mehalla el Kubra Azab Darag.  The negotiations yielded the 
following agreements: 
 
-- The company will immediately pay, as an advance, ninety 
days of the annual profit shares and bonuses to the workers. 
 
-- The strike days will be considered paid holidays, whose 
costs will be incurred by the Holding Company 
 
-- An annual increase of 7% of the basic salary. 
 
-- A cooperative society is to be established, funded by the 
Holding Company, to provide for the transportation of 
workers.  Strike leaders also formed a committee to continue 
negotiations with the Holding Company over increasing the 
allowances for food and industrial safety. 
-- The company shall not penalize and worker who took part in 
the strike. 
 
-- The company will remove board chairman Mahmoud el-Gebaly 
and several of his assistants, whom the workers deem corrupt, 
from their positions. 
 
¶4. (U) The negotiated settlement is seen as a major victory 
for the strikers and has already led to two similar actions 
at other factories this week, both of which have been 
resolved.  With 12 percent inflation over the past year, and 
a 37 percent rise in the price of fresh vegetables, workers 
at Ghazl el Mehella, who earn between LE 300 and LE 450/month 
($52-$78) are increasingly strapped.  Press reports indicate 
that the firm was profitable last year, with estimates of 
profits put between LE 170m-217m ($29m-38m) in the past 
fiscal year.  Although there is no minimum wage under 
Egyptian law, salaries at this level are inadequate for 
workers with families.  Many are working a second job to make 
ends meet, further contributing to oft-cited productivity 
problems at these state-owned factories. Until Egypt is able 
to develop representative union structures that allow for 
freedom of association and proper collective bargaining, 
inflation pressures and fears of privatization will lead 
public sector workers elsewhere to follow the Ghazl el 
Mehalla model to seek their own concessions through illegal 
strike actions. 
RICCIARDONE