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FM AMEMBASSY MEXICO
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INFO RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE
RUEHXI/LABOR COLLECTIVE
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UNCLAS SECTION 01 OF 04 MEXICO 005935 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR DRL/AWH AND ILCSR AND WHA/MEX, USDOL FOR ILAB 
 
E.O. 12958: N/A 
TAGS: ELAB ECON PGOV EIND EINV PINR MX
SUBJECT: SO FAR UNION DISPUTE HAS LITTLE IMPACT ON FORD 
OPERATIONS 
 
¶1.  SUMMARY: A leadership dispute within what had been the 
sole union representing all of the workers at Ford Motor 
Co.,s three production plants in Mexico has, for the most 
part, had little impact on the car maker,s Mexico 
operations.  The leadership dispute has lead to the formation 
of a new union mainly representing the nearly 3000 workers at 
Ford,s Hermosillo plant in the northwestern Mexican state of 
Sonora.  The Hermosillo plant is Ford,s largest and most 
modern facility in Mexico turning out some 280,000 vehicles 
per year.  The other two plants are in the border state of 
Chihuahua and the central State of Mexico (Edomex).  Thus far 
Ford,s management has successfully stayed out of the union 
leadership dispute leaving it up to the GOM,s Secretariat of 
Labor (STPS) to the resolve the matter.  The STPS is very 
much aware of problems this leadership dispute could cause 
Ford and is working to resolve the matter collectively before 
bargaining contract renegotiations begin separately in the 
company,s three plants in January, February and March of 
¶2008.  Ford is a major investor in Mexico and its plants 
create thousands of jobs in its three production facilities 
and many thousands more in the operations of related supplier 
companies.   A formal meeting to try and work out some sort 
of arrangement with the two opposing leaders has been set for 
November 29-30.  END SUMMARY 
 
 
LABOR RELATIONS AT FORD DE MEXICO 
--------------------------------- 
 
¶2.  Ford Motor Company is a major investor in Mexico.  The 
company has three large production plants in the county in 
Hermosillo, Sonora, Chihuahua, Chihuahua and Cuautitlan, 
Edomex.  Ford employs roughly 2800 workers in Hermosillo and 
around 700 workers in each of its two other production 
facilities.  In addition to these direct hire employees 
Ford,s plants also generate thousands more jobs across 
Mexico in related supplier company operations.  For the most 
part Ford has had a cooperative and productive relationship 
with its workers and the union that represents them with no 
more than the usual ups and downs of any major corporation 
operating in Mexico. 
 
¶3.  Until July 2007 a single national union, called the 
&National Workers Union of the Ford Motor Company and the 
Automobile Industry8 (SINTRAFORD), represented all of the 
workers at Ford,s three plants in Mexico.  SINTRAFORD is an 
affiliate union of the Confederation of Mexican Workers 
(CTM), the largest labor federation in Mexico and roughly 
equivalent to the AFL-CIO.  For at least 17 years a single 
individual, Secretary General, Juan Jose SOSA Arreola, has 
headed SINTRAFORD.  Sosa is typical of many Mexican labor 
leaders in that he tended to view his election as the head of 
SINTRAFORD as a lifetime appointment.  Overall Ford has been 
able to work with Sosa through the years and, according to 
company officials in both Hermosillo and Cuautitlan, is 
perfectly willing to continue working with him if the workers 
choose to maintain him in his leadership position. 
 
 
TIMES CHANGE BUT UNION LEADER DOES NOT 
-------------------------------------- 
 
¶4.  Although many union leaders in Mexico occupy de facto 
lifetime positions they are, nevertheless, required by 
Mexican law to run for re-election.  The time between 
elections varies from union to union but the standard mandate 
period for union leaders in Mexico is either three or six 
years.  In the case of SINTRAFORD, its official leader, Juan 
Jose Sosa had all but completed his sixth term as the 
organization,s Secretary General and in May 2007 had begun 
arranging a union convention to be held in Hermosillo that 
was intended to rubber stamp his re-election when he was 
unexpectedly surprised.  In making the arrangements for the 
participation union representatives from Hermosillo, Sosa 
learned that almost the entire staff of unionized workers 
there planned to vote against him in favor of one of their 
own, Ricardo MARTINEZ Herrera, as SINTRAFORD,s Secretary 
General. 
 
¶5.  Rather than risk going into a head to head vote with 
Martinez Sosa, who had already informed the GOM,s labor 
authorities that SINTRAFORD had called a national convention, 
 
MEXICO 00005935  002 OF 004 
 
 
apparently changed the location of the election without 
telling anyone in Hermosillo.  As far as the STPS knew the 
convention took place as scheduled and Sosa was &reelected8 
with most of the votes from the workers in Chihuahua and a 
fair portion of those in Cuautitlan, Edomex.  Sosa then 
presented the results of the rump convention to the STPS but 
reportedly failed to mention that the bulk of the union,s 
workers were not represented at the event.   Shortly 
thereafter, and based on the documentation presented at the 
time, Sosa received official GOM recognition of his 
reelection.  This switch and vote maneuver by Sosa is very 
much a tactic from the CTM,s past when the GOM allowed 
accommodating union leaders to do almost anything they 
wished. 
 
 
A NEW FORD UNION IS BORN 
------------------------ 
 
¶6.  In reaction to Sosa,s switch and vote maneuver the 
workers in Hermosillo held a convention of their own in late 
May, only shortly after the national convention,s originally 
planned date.  During this convention the Hermosillo workers 
voted to form a separate Ford union with Martinez as the new 
organization,s Secretary General.  They also voted to 
petition the GOM to annul Sosa,s election and, failing that, 
called for Martinez to formally challenge Sosa for leadership 
of all Ford employees in Mexico via a GOM supervised national 
union election.  The new union formed in Hermosillo was 
called the &National Progressive Workers Union of the Ford 
Motor Company and the Automobile Industry.8  Although the 
workers in Hermosillo decided to form a separate union they 
unanimously voted to maintain their overall union affiliation 
with CTM.  The new union with Ricardo Martinez as its leader 
was officially recognized by the GOM on September 20, 2007. 
 
¶7.  During a recent conversation with Mission Mexico,s Labor 
Counselor, Martinez explained his reason for forming a new 
union.  According to Martinez, Sosa has lost touch with the 
workers and, more importantly, seems oblivious to the dire 
economic situation and the current reality facing Ford.  Ford 
Motor Co., Martinez said, is struggling to survive in an 
aggressively competitive global market.  In order to do this, 
he continued, the company has had to adapt and he pointed to 
the extensive cross training and increased level of 
outsourced functions presently in place at the Ford plant in 
Hermosillo.  Sosa, Martinez stated, is insisting on 
negotiating with Ford on the basis of individual workers 
doing specialized jobs and only those jobs.  This inability 
to adapt to Ford,s current reality, Martinez concluded, 
would only put the company and all of the workers, jobs at 
further risk. 
 
¶8.  Within the larger organization of the CTM the formation 
of the new Progressive Workers Union is producing high levels 
of ambivalence.  At the national level the CTM is aware that 
Sosa was officially recognized as the leader of the union of 
all Ford workers throughout Mexico.  However, it soon became 
clear to them that at the state level, the Sonora offices of 
the CTM sees Ricardo Martinez as the legal representative of 
the workers at Ford,s Hermosillo plant.  The national level 
of the CTM knows Sosa does not have the support of the 
workers in Hermosillo but is reluctant to challenge the 
STPS, recognition of him; fearful that doing so would set 
bad a precedent undermining the legitimacy of GOM union 
leadership recognition.  The national CTM is also hesitant to 
try and impose Sosa on its Sonora branch because that office 
increasingly uses secret ballots to determine union 
leadership issues.  Secret ballots are a relatively new 
phenomena to the CTM and there are many union leaders in the 
organization throughout Mexico who are opposed to them. 
 
 
MANAGEMENT,S VIEW OF THE UNION SITUATION IN HERMOSILLO 
--------------------------------------------- --------- 
 
 
¶9.  Ford,s management, at least in the Hermosillo plant, is 
largely supportive of union activities there.  In a 
conversation with AmConsul Hermosillo,s Labor Watcher and 
Mission Mexico,s Labor Counselor, Ford management officials 
there stated, &the union is considered part of the 
 
MEXICO 00005935  003 OF 004 
 
 
company.8  (Comment: This statement seems to reflect the 
perception of the company Ricardo Martinez related to Mission 
Labor Counselor.)  The Ford management officials state they 
are making every effort to accommodate the new local 
Progressive Union and SINTRAFORD, which are currently both 
representing the Ford production workers in the plant.  At 
this time management is hosting 5 national CTM 
representatives and 11 local union representatives in the 
Hermosillo production facility.  Management acknowledges that 
there has been some disagreement between SINTRAFORD and the 
local Progressive union that are contending to represent the 
workers, but management is willing to work with both.  The 
next contract negotiations are to be completed by Feb 2008. 
According to management the biggest issue being discussed is 
the power struggle over union representation.  Management is 
refraining from taking sides while making themselves 
available to representatives from both sides. 
 
 
HOW FORD VIEWS THE DISPUTE BETWEEN THE TWO UNIONS 
--------------------------------------------- ---- 
 
¶10.  According to Ford,s Labor Director in the Mexico City 
area, The company is well aware of ongoing competition 
between SINTRAFORD and the Progressives.  This awareness is 
based on a number of factors; one of the most prominent of 
which is the fact that Hermosillo is Ford,s largest plant in 
Mexico with about 2800 workers whereas Chihuahua and 
Cuautitlan (Edomex) each have about 700 workers.  Ricardo 
Martinez, the Ford Labor Director said, ultimately petitioned 
the STPS to have the National Progressive Union recognized as 
the union for the Hermosillo and the Cuautitlan plant. 
Martinez did not attempt to extend his union to Ford,s 
Chihuahua plant, which is probably recognition of where Sosa 
has his stronghold 
 
¶11.  The Labor Director opined that if a vote were held at 
each of the plants, that Martinez would get near 100 percent 
support in Hermosillo, Sosa would get near 100 in Chihuahua 
and, Cuautitlan would be about 70/30 in favor of Sosa. 
(Comment: According to various media reports there appears to 
be a consensus that an actual vote in Cuautitlan wouold 70/30 
in Martinez, favor.)  Ford is well aware that Martinez has 
the support of the workers in Hermosillo, as well as the 
governor and the Sonora CTM.  Ford knows that under Mexican 
law it is possible to have separate unions in different 
plants, but the 50 1 rule applies for voting on union 
representation.  Assuming that the Labor Director,s 
assessment of the situation Cuautitlan is correct, this would 
mean that even if 30 percent of the workers there support 
Martinez, SINTAFORD would still be the bargaining unit. 
¶12.  To date there has only been stoppage for one shift 
nationwide so far - in Hermosillo.  The Labor Director 
described it as Martinez, way of saying that he controls the 
workers in Hermosillo no matter who the STPS recognized as 
the leader of Ford,s unionized workers in Mexico.  The head 
of the national CTM, Joaquin Gamboa Pascoa, has refused to 
meet with Ford on the leadership dispute issue (see para 8 
above).  Consequently, Ford has been working through the STPS 
for a resolution of the union leadership dispute. 
 
 
GOM EFFORTS TO RESOLVE THE LEADERSHIP QUESTION 
--------------------------------------------- - 
 
¶13.  The GOM,s labor authorities, STPS, have scheduled an 
&audience8 on Nov 29-30 hear the case.  At that time the 
two competing unions will meet with STPS officials and try to 
work out settlement.  The most likely outcome of the audience 
will be an administrative recount of all union votes 
(including Hermosillo this time) to determine if a single 
union will represent all Ford workers in Mexico.   This 
recount would be supervised by the GOM. 
 
¶14.  Either party could file an Amparo (roughly equivalent to 
an injunction) if they don,t like the outcome of the 
audience or a possible recount.  This worries both the STPS 
and Ford because the yearly collective contract negotiations 
are scheduled for January in Chihuahua, February in 
Hermosillo, and March in Cuautitlan.  Ford by law has to 
negotiate with the current legal union leader, and if the 
issue isn,t solved by then, there,s a chance that workers 
 
MEXICO 00005935  004 OF 004 
 
 
in Hermosillo won,t abide by the contract. 
In a recent meeting between Mission Mexico,s Labor Counselor 
and high level STPS official it was made clear that the GOM 
is fully aware of the consequences of protracted union 
leadership dispute at Ford and is working hard to make sure 
such a fight does not happen. 
 
COMMENT 
------- 
 
¶15.  The STPS is very much aware of problems this leadership 
dispute could cause Ford and is working to resolve the matter 
before separate collective bargaining contract renegotiations 
begin in the company,s three plants in during the first 
three months of 2008.  Ford is a major investor in Mexico and 
its plants create thousands of jobs in its three production 
facilities and many thousands more in the operations of 
related supplier companies.   The STPS will not quietly 
accept a situation that might put these jobs at risk.  One 
way or the other the GOM will do everything it can ensure 
that the November 29-30 meeting between the two competing 
unions produces some positive results. 
 
¶16.  This message was jointly drafted by Embassy Mexico City 
and AmConsul Hermosillo. 
 
 
Visit Mexico City's Classified Web Site at 
http://www.state.sgov.gov/p/wha/mexicocity and the North American 
Partnership Blog at http://www.intelink.gov/communities/state/nap / 
GARZA