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RR RUEHCD RUEHGA RUEHGD RUEHHA RUEHHO RUEHMC RUEHMT RUEHNG RUEHNL
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DE RUEHME #1800/01 1641658
ZNR UUUUU ZZH
R 121658Z JUN 08
FM AMEMBASSY MEXICO
TO RUEHC/SECSTATE WASHDC 2207
RUEHC/DEPT OF LABOR WASHINGTON DC
INFO RUCNCAN/ALL CANADIAN POSTS COLLECTIVE
RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEAHLA/DEPT OF HOMELAND SECURITY
RHEHNSC/NSC WASHINGTON DC
RHMFIUU/CDR USSOUTHCOM MIAMI FL

UNCLAS SECTION 01 OF 03 MEXICO 001800 
 
SIPDIS 
 
DEPT FOR DRL/AWH, ILCSR, AND WHA/MEX, DOL FOR ILAB 
 
E.O. 12958: N/A 
TAGS: ELAB ECON PGOV PINR MX
SUBJECT:  PUEBLA ONCE AGAIN THE SITE OF INTENSE DISPUTE 
BETWEEN COMPETING WORKER GROUPS 
 
REF: (A) MEXICO 0324 (B) OTTAWA 0767 
 
¶1.  Summary: The central Mexican state of Puebla is once 
again the site of a bitter dispute between two labor groups 
competing for control of a collective bargaining contract at 
&Mexmode8, a sport clothing manufacturer.  In this latest 
instance of conflict between workers, groups the competing 
parties are each affiliated with Mexico,s two main 
opposition political parties.  A previous inter-union type 
dispute in Puebla (Ref A) was occasionally tense but rarely 
were there any serious concerns over a potential outbreak of 
violence.  This new row, occurring at a factory that mainly 
produces merchandise for international sporting goods company 
Nike, has shown clear signs of being potentially violent. 
Moreover, are accusations that the political affiliations of 
the parties involved in this disagreement have prompted local 
labor authorities to act in ways inconsistent with their role 
as neutral arbiters.  In 2003, the Mexmode factory, which is 
owned by the Korean &Kuk-Dong8 corporation, was the subject 
of a submission (formal complaint) under NAFTA,s labor side 
accord, the North American Agreement on Labor Cooperation 
(NAALC), for alleged labor rights violations.  End Summary. 
 
 
The Dispute 
----------- 
 
¶2. Starting in January 2008 a long simmering dispute at the 
&Mexmode8 clothing manufacturing company in the central 
Mexican state of Puebla began to take on a new level of 
intensity.  Mexmode employs nearly 700 workers who mostly 
produce sports apparel for the Nike brand.  In 2001 the 
workers at Mexmode voted to change union representation away 
from an older, more established and rather complacent labor 
union to another that they viewed as more willing to take on 
management with regard to defending labor rights.  The losing 
side in that contest for control of the Mexmode workers, 
collective bargaining contract was a member union of the CROC 
(Revolutionary Confederation of Workers and Peasants), the 
third largest labor federation in Mexico.  It appears that 
the larger CROC realized that its affiliate had lost the 
support of the workers but the local member union (FROC ) 
Regional Front of Workers and Peasants) never fully accepted 
its defeat.  Instead, the FROC formed a dissident group 
within the winning union and has continually used regularly 
scheduled annual assembly meetings to criticize from within 
in hopes of returning to power. 
 
¶3.  In March of this year these criticisms began to take hold 
when the current union leadership decided to support company 
management in implementing a productivity enhancement 
program. The program was portrayed by the dissidents as an 
attempt to make Mexmode,s staff work harder but without any 
commensurate increase in pay.  The dissidents also partially 
succeeded in portraying the union leadership, currently 
headed by Secretary General Josefina Hernandez, as being too 
cozy with company management.  Hernandez and the other 
Mexmode union leaders were scheduled to hold an assembly 
meeting to conduct normal union business and brief the 
members on overall situation of their organization this past 
April but failed to do so. 
 
¶4.  While the purpose of the cancelled April meeting was to 
discus routine union business it could also have been used to 
launch a no confidence vote in the present leadership. 
Consequently, Hernandez and her supporting union leaders 
decided not to hold the scheduled assembly in April stating 
that they feared an outbreak of violence.  Media reports 
covering the events at Mexmode certainly described an 
extremely tense situation and it is very possible that there 
could indeed have been violence between the competing groups. 
 
¶5.  Whatever the merits of the choice not to hold the 
previously scheduled April meeting, the decision itself 
rapidly became the focus around which the dissidents rallied. 
 As relations between the competing groups deteriorated the 
decision not to hold the April assembly became the basis for 
which the dissidents affiliated themselves with a mass 
organization of questionable background know as &Antorcha 
Campesina8 (Peasant Torch).  Shortly after the dissidents 
obtained Antorcha Campesina,s (AC) support they filed a 
 
MEXICO 00001800  002 OF 003 
 
 
formal complaint with the Puebla labor authorities over the 
current union leadership,s failure to hold the scheduled 
assembly.  This formal filing was followed up with protests 
outside of the Mexmode factory, wildcat strikes, physical 
abuse and intimidation by AC supporters and in mid-May an 
impromptu assembly that &elected8 a new leadership slate. 
This new leadership, with AC,s support, is demanding that 
the Puebla labor authorities recognize them as the legal 
representatives of the Mexmode workers. 
 
 
The Players 
----------- 
 
¶6.  There are a number of different elements involved in the 
ongoing dispute at the Puebla Mexmode factory.  First and 
foremost is the fractured union itself, Sitemex (Independent 
Union of Mexmode Workers).  As noted above, the current 
leader of Sitemex is Secretary General, Josefina Hernandez. 
Sitemex is a member of the National Workers, Union (UNT), 
the second largest labor federation in Mexico.  The UNT 
describes itself as being &independent8.  However, in the 
Mexican context, independent labor organizations are actually 
those entities that have no formal link with any of Mexico,s 
political parties.  Although not officially linked to any 
political party, by any measurement that matters, these 
independent organizations are closely tied to the PRD (Party 
of the Democratic Revolution Mexico,s, main opposition 
party.  The national leader of the UNT has been very public 
in his support for Josefina Hernandez and Sitemex,s current 
leadership slate. 
 
¶7.  The leader of the dissident group within Sitemex is led 
by Enrique Puente.  Some labor observers and several media 
reports have linked Puente and his supporters to the Puebla 
FROC, and by extension to the larger national CROC labor 
federation. Post notes that while the CROC officially lists 
the FROC as a member of its broader organization it has long 
been at odds with many of its associate members in Puebla and 
has little effective control over these affiliates.  For all 
practical purposes Puente and his supporters have no real 
connection to the CROC beyond a link on paper and in recent 
weeks have fully taken on the mantle of Antorcha Campesina. 
 
¶8.  The Antorcha Campesina organization began in the 1970,s 
as a student movement in Puebla dedicated to promoting the 
interests of peasant and agricultural worker groups.  Over 
time AC expanded from its original focus on agricultural 
issues and now also includes a broad range of labor issues on 
its agenda. This expanded focus has enabled the AC to grow 
into a national level organization.  Concurrent with its 
growth in size the AC acquired a reputation for using 
aggressive protest tactics to the point where some Mexican 
academics describe it as a paramilitary organization.  The AC 
claims it is formally linked to Mexico,s former ruling 
party, the PRI (Institutional Revolutionary Party).  The PRI 
is one of Mexico,s two main opposition parties and is 
currently the governing party in Puebla.  Some international 
groups who monitor labor issues in Mexico claim that the AC 
is controlled by the PRI.  There seems little doubt that for 
its own reasons the AC works closely with some PRI 
politicians in Puebla but, based on currently available 
information it would be a stretch to assert that it is 
controlled by the PRI. 
 
¶9.  The Mexmode Company is a maquiladora factory operated by 
the Korean owned Kuk-dong Corporation.  By all publicly 
available reports Kuk-dong/Mexmode, Sitemex and their main 
customer, Nike, have maintained a generally positive 
relationship.  Kuk-dong and Nike have remained publicly 
neutral with regard to which group controls the Mexmode 
collective bargaining.  That said, the Korean owners of 
Mexmode have sent high level executives to Mexico to try and 
help resolve the dispute between the competing labor groups 
within the factory.  Josefina Hernandez and the UNT have 
welcomed the involvement of Mexmode,s Korean owners. 
Enrique Puente and the AC have asserted that the involvement 
of Kuk-dong corporation executives is proof that the current 
leadership of Sitemex is controlled by company management. 
They seem to totally ignore the fact that at present Josefina 
Hernandez and union she leads are the legally recognized 
representatives of the workers at the Mexmode factory. 
 
 
MEXICO 00001800  003 OF 003 
 
 
 
The Puebla Labor Authorities 
----------------------------- 
 
¶10.  The labor authorities in Puebla are represented in this 
dispute by the state government,s Secretariat for Social 
Development, Secretariat of Labor and that office,s 
Conciliation and Arbitration Board (is roughly equivalent to 
Labor Relations Board in the US).  As in the case of previous 
labor disputes in Puebla (Ref A) the authorities there have 
been extremely deliberate in their handling of the Mexmode 
situation.  The authorities have done little to resolve the 
dispute, levied no penalties for wildcat strikes and taken no 
actions against those accused of physical abuse and 
intimidation of UNT supporters within the factory. 
 
¶11.  The authorities have declined to formally recognize the 
impromptu election in which Enrique Puente and the AC are 
claiming they won the right to represent the Mexmode workers. 
 However, the authorities have also failed to formally reject 
the results of that election which apparently failed to meet 
the minimum quorum requirements.  They did indicate their 
willingness to formally organize elections to determine which 
group would be the legal representatives of the Mexmode 
workers but said it might take another two months before 
these elections could be held. Some international NGO,s have 
claimed that the PRI government in Puebla is tacitly 
supporting Enrique Puente and AC against Josefina Hernandez 
and the UNT in order to gain their support for upcoming 
elections in 2009. 
 
 
Comment 
------- 
 
¶12. The situation at the Mexmode factory is characterized by 
varying degrees of mistakes and unacceptable behavior 
compounded by the relative inaction of less than vigilant 
arbiters.  The current leadership of the Mexmode workers 
union clearly misjudged the extent to which the AC supported 
dissidents would be able to portray their actions in the 
worst possible light.  Moreover, their failure to hold a 
previously schedule assembly meeting only served to validate 
many of the complaints against them.  That said, the strong 
arm tactics and alleged physical abuse of the current Sitemex 
union leaders employed by the dissidents cannot be justified 
under any circumstances.  All of this is being made worst by 
the overly cautious behavior of the Puebla labor authorities 
and their failure to even investigate the abuse allegations 
against the dissidents and their Antorcha Campesina 
supporters. 
¶13.  Post will continue to monitor the Mexmode situation and 
report as appropriate.  We note that labor problems in Puebla 
generally take an extended period to resolve.  For example, 
in 2003 Mexmode was in part the subject of a submission 
(formal complaint) under NAFTA,s labor side accord, the 
North American Agreement on Labor Cooperation (NAALC), for 
alleged labor rights violations. The basis of this submission 
centered around complaints of failure to observe such 
principles as freedom of association, occupational health and 
safety requirements, and minimum employment standards (with 
regard to payment of back wages or worked overtime).  A final 
resolution of this submission is still outstanding although 
as recently as this past April (Ref B) the governments of the 
US, Canada and Mexico renewed their commitment to using the 
NAALC to resolve these types of Labor disputes. 
 
 
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