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Alcoa Sweatshops in Honduras

July, 02 2005 Share

Alcoa Pits Auto Parts Workers in Mexico
Against Its Employees in Honduras.

CAFTA Accelerates the Race to the Bottom

July 2005

In July 2004, Alcoa slowly began operations at its three new wire harness plants in Progreso, Honduras, exporting automotive electrical systems to Ford in the U.S. 

Alcoa's three plants, with a total of 2,800 to 2,900 workers (approximately 1,300 workers in Plant I, 1,300 workers in Plant II, and 300 in Plant III--maintenance) are located in the ZIP Porvenir Export Processing Zone.  Alcoa is exempt from all income, provincial and municipal taxes, as well as all import and export duties.  The plants are not yet running at full production capacity.  The overwhelming majority of workers are young and have been hired in the last three or four months.  Alcoa has sent supervisors and maintenance staff from Mexico to Honduras to train the Honduran workers and to help set up the production lines.

The young Honduran workers are from rural areas, and they know nothing about Alcoa other than its name.  Local plant managers have told them that Alcoa is very powerful and wields a lot of influence, but the workers have no idea if Alcoa is a U.S. company or not, and similarly could not even guess where it was headquartered.

New women workers at Alcoa must submit to a mandatory pregnancy test after their first two months, at which point, if they test positive, they are fired.

The standard shift is nine hours a day, 7:00 a.m. to 4:00 p.m., Monday through Friday.  There is a night shift from 4:15 p.m. to 11:45 p.m.  The workers have been told that a third shift will also be added.  In total, the workers get 45 minutes in breaks each day—a half hour for lunch and another 15-minute break in the afternoon.

A small production module of nine workers currently produces 304 wire harnesses per shift, but this mandatory production goal is being increased each week.

Before the Honduran government decreed a minimum wage increase in April 2005, Alcoa workers earned a base wage of 61 cents an hour and $26.75 for a standard 44-hour work week.   With the attendance bonus, known as the Seventh Day's pay, an Alcoa worker could earn 77 cents an hour and $34.05 a week.

Wage before the April 2005 Wage Increase

 Base Wage

Base Wage plus benefits

61 cents per hour

$0.77 per hour

$4.86 per day

$6.19 per day

$26.75 per week

$34.05 per week

 

Following the 12.5 percent government wage increase in April, Alcoa workers now earn a base wage of 68 cents an hour and $30.10 a week.  With the attendance bonus—if the worker does not miss a day or arrive even a few minutes late—an Alcoa worker can earn up to 87 cents an hour and $38.31 a week, which is the highest wage they can earn.

Wage after the April Wage Increase

Base Wage

Base Wage plus benefits 

68 cents per hour 

$0.87 per hour 

$5.47 per day 

$6.96 per day 

$30.10 per week 

$38.31 per week 

 

Alcoa charges 10 lempiras a day—53 cents—for bus transportation.  A modest lunch at the factory cafeteria costs 15 lempiras, or 80 cents.

The workers explained that almost everyone—the great majority—had to work a second job in order to survive.  Some worked in construction, others made deliveries, cut hair or sold sweets.  Alcoa's wage does not meet the workers' subsistence level needs.

In startling contrast, maquila workers in a nearby t-shirt factory are earning, with production bonuses, nearly twice what the Alcoa workers are earning.  Yet, Alcoa's plants are equipped with the most sophisticated machinery, employing the most modern technology to produce auto parts for export to the U.S.   One would think that this higher-end production would pay more than the assembly of a basic t-shirt, not the other way around.

 


 

Denied the Right to Freedom of Association

One thing the workers were very clear about was that they did not have the right to organize.  When asked, the workers immediately responded:  "They don't permit it."  ZIP Porvenir, where Alcoa is located, is union-free.  Not one of the 8,000 workers in the free trade zone has the right of freedom of association.  As the Alcoa workers explained,"Look, there's a whole mountain of workers who have been fired over the last few years for trying to organize in the industrial park.  They don't allow it.

 Alcoa — More Job Cuts on the Way

Alcoa, the world's largest aluminum producer, announced on June 23, 2005 that it will be closing more plants and laying off 6,500 workers in the second quarter, on top of 1,800 layoffs in the first quarter.  No doubt many of these job cuts will be in the U.S. and Mexico, as Alcoa shifts more work to lower wage Central America and China.

 

 In Mexico, Alcoa Increases its Threats

Meanwhile, in Mexico, Alcoa is increasing its threats.  At Alcoa's Plant II in Piedras Negras, Luis Alberto Treviño, Chief of Personnel, is walking the shop floor taunting the workers, telling them to just put up with conditions a little while longer, since Alcoa is planning to shut down the factories, perhaps within the next few months.  This started in the first week of May.

The workers in Mexico are now wondering if Alcoa really does intend to shut down the remaining plants in Piedras Negras, which would mean a loss of another 3,500 jobs.