Essential – and Expendable – Labor, in Mexico, for the US

Yves here. I’m old enough to remember when US and Japanese automakers along with other manufacturers started moving production across the Mexico border to maquiladoras, not just to lower labor costs but also to escape from workplace safety regulations. As this article explains, the latter remains an ugly motivation in the days of Covid-19.

The US is now effectively exporting Covid-19 deaths through considerable official pressure to keep the maquiladoras running, despite high infection rates. By contrast, in US workers are having some success striking workplaces with Covid-19 outbreaks.

By Mateo Crossa, a researcher based in Mexico City and James M. Cypher, an emeritus professor of economics in the doctoral program in Development Studies, Universidad Autónoma de Zacatecas, Mexico . From the July/August issue of Dollars & Sense

Lear Corporation—one of the world’s largest auto parts manufacturers—rose to position 148 on Fortune magazine’s famous list of the 500 largest firms in 2018. It operates with roughly 148,000 workers spread across 261 locations. Its largest presence is in Mexico, where approximately 40,000 low-paid workers make seats and labor-intensive electronic wiring systems to be used, primarily, by the U.S. auto giants in auto-assembly plants on both sides of the border. The largest share of these workers slog away in three huge Lear plants located in the notoriously dangerous border town of Ciudad Juárez in Mexico.

On April 10, 2020 a worker named Rigoberto Tafoya Maqueda died from Covid-19, which had swept in from the north. He had been diagnosed in Lear’s clinic with a mild allergy and was forced to continue working without a face mask, gloves, or hand sanitizer. A short time later, he went to the government’s Social Security hospital, on foot, where he died. Four days later, according to Lear, 13 more workers at the plant had died—but the workers’ labor union claimed that the actual number of work-related deaths from the pandemic was 30. Lear claimed it was not responsible in the least, while offering hollow condolences to surviving family members.

As of late May, no investigation of the workplace had been conducted and no legal charges of negligence had been raised against Lear or any of the other 320 maquiladoras—also known as maquilas, or more recently, by outraged workers, as “makilladoras”—that employ approximately 230,000 in Juárez where workers have sickened. By early May, 104 of these workers had perished. By early June the estimated number of worker deaths was above 200. In all of Mexico, this city, with the largest concentration of low-wage assembly plants, had the highest incidence of pandemic deaths—a mortality rate 2.5 times the national average.

Tijuana is the city with the second largest number of maquilas in Mexico. There, one in four “formal” sector workers (workers with registered jobs and certain rights to health care) work as low-wage laborers producing components for automobiles and many other industries. Tijuana is located in the state of Baja California in Mexico, where the highest number of pandemic deaths—519—had been recorded as of May 15. Of those deceased, 432 were maquila workers. By June 4, Tijuana had the highest number of Covid-19 deaths, 671, of any city in Mexico.

U.S. Business, U.S. State Department Demand: The Maquilas Must Open

Ciudad Juárez and Tijuana are tangible symbols of the imposed power structures under which transnational corporations operate throughout the global South, most particularly in Mexico. In these two border cities, 1,000 miles apart, we find nearly one-fifth of the maquila workforce—500,000 out of a total of 2.6 million workers.

Here, in response to corporations’ treatment of workers during the pandemic, the scene has included bitter strikes, social outrage, and numerous well-attended protests all aimed at imposing plant closures and paid leave. The plant owners have refused to assume any responsibility whatsoever for their negligence, insisting that the work must go on. Instead, they have pressured local and federal governmental agencies to ensure that, in spite of an unsanitary environment, no new safety and health regulations of the workplace will be imposed. After reopening in late May, the plants have taken some measures to reduce health risks among the workers, including the use of masks and plastic dividers at workstations (see photo of seat assembly) and in company lunchrooms.

At the same time, plants have increased the pace of production exponentially. Even with the measures taken, there have continued to be outbreaks of Covid-19 at the assembly plants.

Indeed, the long-powerful U.S. National Association of Manufacturers (NAM) has used every opportunity to ensure that no sustained period of plant closures be implemented—including sending an unprecedented letter to Mexico’s president on April 22, signed by 327 corporate titans who enjoy the lucrative benefits of sweating Mexican workers. Signatories included the heads of 3M Corporation ($32 billion in sales in 2019), Arcelor/Mittal USA ($15 billion in sales 2019), and Caterpillar ($54 billion in sales 2019).

Using a lot of imagination, and no small amount of chutzpah, these captains of industry demanded that President Andrés Manual Lopéz Obrador (or AMLO, as he is known)—who had declared at the start of his presidency that the neoliberal era that had defined Mexico’s economy since 1986 was over—declare that Mexican autoworkers were engaged in an “essential activity.” The letter demanded that the president assure that “all interruptions in the North American manufacturing supply chain would be minimized in these critical moments.” AMLO responded immediately by stating that Mexico and the United States would come to an agreement and that “there were exceptional questions” to resolve with the United States.

Has there ever been an occasion when a president of a sovereign nation has been told that its populace—beset by a vicious pandemic—would have to march into poisoned plants in order to maintain the profit margins of foreign-owned corporations?

If that was not enough, Christopher Landau, the U.S. ambassador to Mexico, gave himself a pat on the back in late April by declaring via Twitter, “I’m doing all I can to save supply chains between Mexico, the United States, and Canada.” Immediately joining the fray, the employers’ and manufacturers’ “peak business organizations”—long the real rulers of Mexico—began to lobby and orchestrate political pressure to guarantee that maquila output would not be interrupted. The large owners associations included the Consejo Coordinador Empresarial (CCE), which is comprised of the largest Mexican firms, and the arch-conservative Mexican Employers Association (COPARMEX), which was formed in 1929 by the anti-union oligarchy based in industrial Monterrey, echoed the arguments presented by the NAM. Also joining in was the Association of the Mexican Auto Industry (which was founded in 1951 by Chrysler, Ford, General Motors, Nissan, and Volkswagen, and lists no Mexican-owned companies as members).

A National Security Issue?

At this point, an unexpected actor entered the scene: The Undersecretary of Defense of the United States, Ellen Lord, declared to reporters in late April, “I think one of the key things we have found out are some international dependencies…” adding that “Mexico right now is somewhat problematic for us.” In her remarks, Lord said nothing about Mexican workers becoming deathly ill, or worse, that toil in the maquilas, now located throughout the country (not just on the U.S.-Mexican border). She also added the “National Security” argument to her framing of the pandemic’s impact on U.S.-Mexico supply chains: “these companies are especially important for our U.S. airframe production.” And, indeed, over the past 20 years the United States has outsourced a modest amount of aerospace production: in Mexico this consists of labor-intensive components that are used by the U.S. civilian aviation firms, along with some Pentagon military contractors, and are typically manufactured in maquilas. One example of this minor sideline of maquila manufacturing—and the conditions that workers face at these factories—is a Honeywell plant in Juaréz where, on April 22, workers engaged in a three-day wildcat strike after learning that Covid-19 had spread into the plant, killing at least one worker.

One protesting worker summarized the situation:

They do not want to give us [sick] days, we are worried because of the pandemic, management does not listen to us, they only tell us [to keep working] and they will give us a bonus of $18-$31.50 [dollars per week] but they will not respond to our demands, we have been on strike three days but the truth is that they are paying no attention to us.

Inaugurating the USMCA

The U.S. pressure game got quick results. On May 12, the Mexican government declared that the aerospace maquilas (which, as of 2020, had only 57,000 direct employees) and the very large auto parts and auto assembly industry—which employs nearly 960,000 workers and is a mainstay of the “export-at-all-costs” neoliberal model—were “essential” industries. With this decree the alarm bells ceased in the United States.

Further, the Mexican government set June 1, 2020 as the date to return to full operation in the auto industry, which ensured that the beginning of the NAFTA-II Agreement (officially the United States-Mexico-Canada Agreement, or the USMCA) was still on track for July 1, 2020. President Donald Trump will undoubtedly use the official launch of the USMCA to maximum effect as he hones his electoral strategy. AMLO supports this new agreement to “help stop the fall of the economy” and promote new foreign investments.

The list of transnational firms that are already in production—or will shortly resume— where Covid-19 has spread is a long one, and includes such companies as: Lear Corporation, Honeywell, Syncreon Borderland, Foxconn, Plantronics, Leoni, Rockwell, Mahle, Electrocomponentes de México, Electrolux, Hubbell, Commscope, Toro Company, Ethicon, Cordis, Syncreon, Flex, Keytronic, Optron, TPI, and APTIV. In April, shutdowns affected approximately 60% of all maquiladora workers in Juarez—a situation that was probably representative for the entire industry—suggesting that as many as 3,000 of the 5,162 maquiladora firms operating in April temporarily closed.

The companies that are reopening are doing so without regard for the deaths of hundreds of their plant workers (some registered, some not). These firms have been the most enthusiastic advocates of restarting production as they have sought to drown out the resistance of their workers.

On May 10, the maquilaassociation (Index) reported 55% of the maquilas in operation. On May 19, as a great number of plants reopened, maquila workers in Jauréz and Matamoros marched to demand the closure of many plants, including those operated by Foxconn in Santa Teresa (where there were six Covid-19-related deaths, according to the workers), Electrocomponentes de México (10 deaths), Lear (30 deaths), Electrolux (seven deaths), Toro (two deaths), and Regal (13 deaths). The workers asserted that none of these operations—which make a range of products, from snow removal equipment to home appliances —were essential and that none of them had met the sanitation requirements as mandated two months earlier. In Juaréz, 66 maquilas that make neither auto parts nor aviation parts (i.e., those never categorized as “essential”) have remained in operation throughout the health crisis.

All across the borderland, from Tijuana (with an estimated 1,000 maquilas) through Mexicali in Baja California to Nogales, Sonora (with 70% of maquilas in operation on May 18), and on to Juaréz, Chihuahua, and then to Ciudad Acuña, Cohauila (where 23,000 workers returned to their plants on May 20) and to the other end of the border in Matamoros, Tamaulipas (where the hospitals were full of dying workers) these states, and 269 municipal governments, had capitulated to the pressure from the United States to reopen. Meanwhile, the Mexican federal government refused to impose its own hygienic measures.

NAFTA: Myth of Development, Reality of Deindustrialization

The destructive impact of the pandemic on Mexico reveals further the direct consequences of 26 years of neoliberalism under NAFTA, which exacerbated inequality and largely destroyed the nation’s public health system, while imposing a new regime of food precarity as once nationally-produced grains sold at controlled prices are now imported. This shift away from producing staple foods in Mexico has resulted in the displacement of millions of peasant cultivators—many of whom eventually migrated to the United States to work in the dirtiest, hardest, most unstable, and unrewarded jobs available.

What’s more, despite the increased prosperity that NAFTA promised, throughout the NAFTA era average workers’ wages—measured in terms of their purchasing power of basic goods—have generally declined. Over the past nearly three decades, exports have surged (especially in auto and auto parts manufacturing), and Mexico has been forced to de-industrialize as the domestic market has drowned in a sea of cheap imports.

As a result, the industrial share of the GDP fell from 36.2% in 1993 (the last year before NAFTA took effect) to only 29.6% in 2017 as manufacturing ceased to be the driving force of the economy. In the period from 2003–2016, national content (with value originating in Mexico) across Mexico’s broad manufacturing export sector averaged only 41%. Using cheap labor to process imported inputs (59% of the value of manufacturing exports does not originate in Mexico) into goods that are largely exported to the United States now defines Mexico’s ever-plodding economy. A large portion of the millions of manufacturing sector jobs that were lost in the United States after 1993 were transferred to Mexico where an enormous army of impoverished wage workers crowded into the maquiladora firms—which, as mentioned, now directly employ 2.6 million throughout Mexico.

As was the case in 1992–1993, when the business and political elites of Mexico opened the road to NAFTA—portraying the agreement as a much-needed lever to promote development—these same forces are now eagerly awaiting the USMCA. This delusionary enthusiasm found its way into an essay written by AMLO and published by the office of the president on May 16, 2020:

To be the neighbor of the most powerful economy in the world under the current circumstances of global recession will help us to drive forward our productive activities and create new jobs. It is a fact that the agreement will attract more foreign investment to our industrial export sector.

But the rage of the maquila workers has further unmasked this myth of economic development, despite the fact that, after some attention received in April, the media has largely ceased coverage of labor strife on the border.

On the first of May, International Workers Day, the streets of Ciudad Juárez woke up to graffiti proclaiming “STOP MAKILLAS.” In this manner a diverse collective of workers began a campaign to raise awareness about perilous workplace conditions—announcing that “el virus es la makilla” (the virus is the maKILLa) and that “la makilla te aniquila” (the maKILLa will annihilate you)—and to demand new protections centered on Salud, Trabajo y Dignidad (Health, Work, and Dignity). Through these protests, they were able to communicate to the nation the completely arbitrary and unaccountable manner in which the transnational firms were operating along the border and throughout the country.

The current policy is for these firms to force workers into the plants (lest they literally starve) on the pretext that they are involved in “essential” activities. Firms expect workers to continue doing their jobs without sanitary protections, given that distancing in these factories is impossible. Indignant workers have drawn attention to those who have been summarily fired, without justification as required by the labor law, when they resisted being forced into the deadly plants. These workers were then denied their indemnification for losing their jobs. (The labor law requires that employers pay workers fired without cause three months of salary plus 20 days of pay for every year of service, and a number of other smaller payments.)

“STOP MAKILLAS!” was also the cry heard on May 12, when the Mexican government declared that maquila workers in the aerospace and the auto industries were “essential” (essential to the United States) and had to be forced to work, regardless of the utter absence of health and safety protections for workers. The workers responded by demanding they be put on leave at full pay (as well as that all necessary sanitary measures be taken).

But workers’ concerns and their demands are clearly unimportant to the U.S. government and hundreds of U.S. companies operating in Mexico. U.S. Ambassador Landau was blunt in his advocacy of reopening in his widely circulated statement:

We have to protect [people’s] health without destroying the economy. It’s not impossible. … I’m here to look for win-win solutions. On both sides of the border, investment = employment = prosperity.

And so, only four weeks after shutting their doors, the maquilas were open without any clear information as to which, if any, measures had been taken to protect the returning workers. Most workers were forced back onto the shop floor (although some large export firms delayed until June 1). The agencies of the Mexican government (at all levels) and the company-controlled unions had fallen over backwards to ensure that the profits would soon again be flowing, primarily to the United States. In the border state of Chihuahua, for example, 93% of the 122 “essential” workplaces inspected were approved for operation by June 1. However, two weeks later, additional plant inspections resulted in the closure of 44 out of 208 maquiladoras for lack of compliance with sanitation requirements.

In Part 2, the authors examine how Mexican workers on the U.S. side of the border have been pressed into “essential” work in meatpacking plants through Trump’s invocation of the Defense Production Act.