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FM AMEMBASSY MEXICO
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INFO RUCNCAN/ALL CANADIAN POSTS COLLECTIVE
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RUEAHLA/DEPT OF HOMELAND SECURITY
RUEATRS/DEPT OF TREASURY WASHDC
RHMFIUU/CDR USSOUTHCOM MIAMI FL

UNCLAS SECTION 01 OF 03 MEXICO 000302 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR DRL/AWH AND ILCSR AND WHA/MEX, DOL FOR ILAB 
 
E.O. 12958: N/A 
TAGS: ELAB ECON PROV PHUM EIND PINR MX
SUBJECT: NEW LEADERSHIP AT VOLKSWAGEN UNION 
 
REF: 07 MEXICO 5935 
 
¶1.  SUMMARY: In early January a new leadership team took 
formal control of the union at the Volkswagen automobile 
assembly plant in the central Mexican state of Puebla.  The 
Puebla Volkswagen plant employs approximately 11,000 workers 
and is one of, if not the, single largest employers in the 
state.  The Volkswagen auto workers union does not belong to 
any of Mexico,s traditional national labor federations and 
is instead affiliated with the National Workers Union (UNT) 
which has very close ties to the PRD, the country,s main 
opposition political party.  During the campaign the group 
which eventually won the union,s election held late 2007 had 
considered leaving the UNT which would have had a significant 
negative impact on that national labor federation and by 
extension on the PRD.  Because of the size and importance of 
the union many feared the possibility of violence as the 
competition for union control intensified.  In the end, 
perhaps because of a significant police presence by state 
authorities, the union election and ultimate transfer of 
power took place peacefully.  The main issue in this election 
was a struggle between an established union leadership 
perceived as being overly concerned with its own pay and 
perks, and a newer group of union leaders willing to 
challenge management on issues such as major changes in work 
rules that could affect productivity.   End SUMMARY. 
 
 
OUT WITH THE OLD 
---------------- 
 
¶2.  During the last weeks of 2007 the Independent Automobile 
Workers Union of Volkswagen of Mexico (SITIAVW) in the 
central Mexican state of Puebla held internal elections to 
choose a new leader and a new executive committee.  The 
winner of the election and his leadership team will serve a 
four year term of office.  The Volkswagen assembly plant in 
Puebla employs about 11,000 workers of whom some 9,500 are 
unionized.  Volkswagen is one of, if not the, single largest 
employers in Puebla and its impact on the state,s economy is 
considerable.  In addition to the potential economic affects 
of the outcome of the SITIAVW election, the ballot vote also 
had significant implications for both the state of Puebla and 
for organized labor in Mexico at the national level. 
 
¶3.  The SITIAVW is affiliated with the second largest labor 
federation in Mexico, the National Workers Union (UNT). 
Unlike many older and more traditional labor federations in 
Mexico, the UNT has no formal ties to any particular 
political party and describes itself as an &independent8 
labor organization.  However, informally, the UNT is closely 
linked to Mexico,s main opposition party, the Party of the 
Democratic Revolution (PRD).  Control of the SITIAVW is an 
important source of strength for the UNT and by extension for 
the PRD.  During the campaign leading up to the election, one 
of the leading groups contending for control of the SITIAVW 
indicated that if elected it might well withdraw the union 
from the UNT. 
 
¶4.  As in other parts of Mexico, politicians in Puebla often 
campaign on topics related to job creation and or job 
retention.  Anything that potentially touches on employment 
issues, particularly with regard to one of the state,s 
largest employers, is closely watched by the authorities. 
Consequently, the state government of Puebla, which is 
controlled by Mexico,s former ruling party, the 
Institutional Revolutionary Party (PRI), was particularly 
vigilant in monitoring, and ultimately policing the SITIAVW 
election both for economic and political reasons.  With 
regard to economic reasons, Puebla,s government wanted to be 
prepared for a possible change in the business environment if 
control of the union changed to a group intent on being more 
confrontational with Volkswagen management.  In political 
terms, the authorities wanted to be ready to take advantage 
of a change in leadership that might leave the UNT and 
thereby sever union,s ties with Mexico,s main opposition 
party. 
 
 
IN WITH THE NEW 
 
MEXICO 00000302  002 OF 003 
 
 
--------------- 
 
¶5.  At the height of the SITIAVW election there were eight 
different factions vying for control of the union but in the 
end only two of these groups had any real chance of winning. 
The two main contenders were named &21st Century Labor 
Justice8 headed by Jose Luis Rodriguez Salazar and &Union 
Power8 led by Victor Jaime Cervantes Rosas.  This was the 
second time these two power group competed for control of the 
SITIAVW.  In the previous election in 2003, the group lead by 
Rodriguez Salazar defeated Cervantes Rosas, Union Power 
group by winning 20 percent, as compared to 11 percent of the 
vote.  That 2003 victory was the second win for Rodriguez 
Salazar, thereby allowing him to serve as the SITIAVW,s 
Secretary General for a total of eight years.  Rodriguez 
 
SIPDIS 
Salazar and his group had hoped to win a third four year term 
of office but it was not to be.  In the 2007 vote Cervantes 
Rosas, group defeated Rodrigues Salazar,s with 34 percent 
of the vote compared to 15 percent of the vote. 
 
¶6.  The main focus of this last election appears to have been 
a struggle between the established union leadership that had 
clearly benefited directly from its eight years in power and 
a challenger prepared to take on management more 
aggressively.  The challengers, Cervantes Rosas, Union Power 
group, made a great deal of the fact that while Rodriguez 
Salazar started out as just a senior worker he had now moved 
to an upscale house, been featured on CNN as one of the ten 
most powerful labor leaders in Mexico and had been invited to 
serve as a PRD opposition party city councilman in the PRI 
dominated administration of Puebla,s state capital. 
 
¶7.  Fairly or not, Rodriguez Salazar,s group was blamed for 
the fact that total employment at the Volkswagen plant had 
dropped from 15,000 to 11,000 jobs during the eight years 
that &21st Century Labor Justice8 had control of the union. 
 The clear message of the ultimately successful campaign of 
Cervantes Rosas, group was that the Rodriguez Salazar was 
more interested in the pay, perks and politics that 
leadership of the union gave him than he was in the welfare 
of the workers.  With such a sharp focus on how well 
Rodriguez Salazar had personally done by serving as SITIAVW 
leader, the authorities in Puebla feared the possibility of 
violence as the competition between the two leading groups 
intensified.  Consequently, state law enforcement and labor 
authorities took steps to closely monitor the entire election 
process and to deploy a substantial police presence at 
polling places well in advance of actual voting.  In the end, 
the election took place without violence and without any 
significant public disturbances with a large margin of 
victory won by Victor Jaime Cervantes Rosas and his &Union 
Power8 groups. 
 
 
SITIAVW,S NEW UNION LEADERSHIP HIGHLIHTS ITS POSITIONS 
--------------------------------------------- --------- 
 
¶8.  &Union Power8 group led by Cervantes Rosas is composed 
of a  team of 42 workers who represent the eight different 
industrial divisions at the Volkswagen plant in Puebla. 
Although the winning Union Power group focused the majority 
of its campaign efforts underscoring how much Rodriguez 
Salazar and his group had directly benefited from their years 
of union leadership, they highlighted two other themes during 
the course of their electoral campaign.  One of these themes 
was openly political and the other more specifically related 
to the production operations of Volkswagen,s Puebla facility 
and management,s plans to change current work rules. 
 
¶9.  In discussing political plans, the Union Power group 
repeatedly stated its intention to review SITIAVW,s long 
standing affiliation with the UNT to consider whether the 
time had come to withdraw from this national level labor 
federation because it did not see any clear advantage to 
being associated with this national federation. Specifically 
being part of the UNT did not get SITIAVW members anything 
they would not have gotten on their own. At several points 
during the campaign Cervantes Rosas pointedly refused to rule 
out the possibility that the SITIAVW might join one of 
Mexico,s other national level labor federation.  In order to 
retain the SITIAVW within the UNT,s ranks its national 
leader, Francisco Hernandez Juarez, personally lobbied 
 
MEXICO 00000302  003 OF 003 
 
 
Cervantes Rosas, urging him not to take the Volkswagen 
autoworkers union out of the national labor federation.   In 
the end, Cervantes Rosas agreed to remain in the UNT for an 
additional year at the end of which the SITIAVW would review 
its relations with the national federation and make a 
definitive decision at that time. 
 
¶10.  The other prominent theme of Union Powers, campaign was 
its complete rejection of Volkswagen,s management,s plan to 
implement what the union groups saw as a significant change 
in work rules. According to the Union Power group, Volkswagen 
management wants to institute a policy of greater labor 
flexibility. From Union Powers, perspective this increased 
flexibility is viewed as a way to increase the amount of work 
employees are required to do without any meaningful increases 
in salary.  Volkswagen,s management,s position is that the 
increased labor flexibility is simply an expansion of what is 
already being done in some division of the company,s Puebla 
operations.  This change in work rule flexibility would 
provide significant cross training to Volkswagen employees as 
a way of increasing their productivity.  Post notes that 
changes Volkswagen wishes to expand upon are already being 
implemented in at least two of the three Ford assembly plants 
in Mexico (Reftel) and that Ford copied these work rule 
changes from several Japanese auto manufacturers as a way to 
boost not only productivity but also competitiveness. 
 
¶11.  The Union Power faction has publicly stated its wish to 
have a productive relationship with Volkswagen management but 
indicated that such a relationship must be based on mutual 
respect.  The new union leadership says it is prepared to 
negotiate with Volkswagen on any other subject, except change 
in work rule flexibility.  The new union leadership says, 
although with presenting any evidence to support its 
assertion,  that labor costs in Mexico are already the lowest 
at any of Volkwagen,s operations worldwide  and it sees no 
reason to take steps (like work rule flexibility) that would 
further reduce costs without greater compensation for 
workers.  Interestingly Cervantes Rosas has indicated to the 
press that the union will not seek any substantial increase 
in worker compensation at his time nor in the immediate 
future. 
 
 
COMMENT 
------- 
 
¶12.  The change in leadership of the Volkswagen autoworkers 
union offered a demonstration of something that is rare in 
Mexican labor politics --  namely workers democratically 
choosing who will represent them.  The leadership group that 
lost the election gracefully accepted its defeat and 
efficiently handed over power to its successor.  The PRI 
controlled state government of Puebla, which has a reputation 
for often seeking to obtain a partisan advantage, remained 
neutral during the electoral process.  This neutrality 
reqiired notable restraint on the part of the state 
authorities given that the faction that won the election had 
signaled a willingness to at least consider changing the 
union,s labor and political affiliation.  At the national 
level, the UNT lobbied hard to hold on to the SITIAVW union 
and for the moment it appears this PRD linked labor 
federation was successful.  Now that the new SITIAVW has 
taken office it remains to be seen what type of relationship 
it will establish with company management and what 
compromises it will make to help Volkswagen follow American 
and Japanese automakers practices that have proven effective 
in increasing productivity. 
 
 
 
 
 
 
 
 
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