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July, 01 2005 |  Share

Alcoa's High Tech Sweatshops in Mexico & Honduras

The Race to the Bottom From NAFTA to CAFTA

by Charles Kernaghan

Ninety-eight percent of Mexico's Maquiladora Exports Go to the United States

  • There are 2,809 maquiladora factories in Mexico with 1.14 million workers. Three quarters of these plants are along the border.
  • There are 420,000 maquiladora workers in Mexico manufacturing $1.8 million-worth of auto parts each month for export to the United States.
  • In 2000, U.S. companies were the source for 90 percent of the components assembled in Mexico's maquila plants. By 2004, the U.S. share had fallen to 69 percent, while Asia's share jumped 28 percent.
  • There are 198,252 garment workers in 625 maquila plants sewing clothing for export to the U.S.
  • In 2004, the U.S. ran a $45 billion trade deficit with Mexico, importing $155.8 billion-worth of goods, while exporting just $110.8 billion.


The U.S. accounts for 82.5 percent of all direct foreign investment in Mexico. (Based on 2001 figures, DFI from the U.S. was $20.4 billion out of a total of $24.7 billion.)

 


 

"We can hire three Hondurans for every one of you Mexicans." 

 This is what Alcoa management is telling its over-12,000 auto parts workers in Acuña and Piedras Negras, Mexico, who manufacture automotive electrical systems for export to Ford, General Motors and Subaru in the U.S.  Conditions have never been good for Alcoa workers in Mexico, who—despite the fact that Alcoa refers to them as "associates"—still live in primitive one- and two-room cinderblock huts lacking windows and potable water.

The base wage in these high-tech Alcoa plants ranges from just 66 cents to $1.41 an hour.  The median wage is $1.04 an hour, which can rise to $1.22 an hour including the attendance, punctuality and food bonuses that make up what is known in Mexico as the "integrated wage."  The highest production wage we found in any of the plants was $2.45 an hour, which only a very small handful of Alcoa workers actually earn.  Upon hearing of a $2.45-an-hour wage, some people in the U.S. might think this is not too bad for the developing world.  The fact is, the cost of living along the border, where the maquila factories are located, is higher than it is in Mexico City, the capital.  Many products, like milk, eggs and gasoline, cost more in Mexico than they do in the U.S.  By a very conservative estimate, the cost of living along the Mexican border is at least 60 percent of that in the U.S., making that $2.45 the equivalent of trying to live on $4.08 an hour in Pittsburgh or Detroit.  The median wage of $1.22 an hour earned by the Alcoa workers in Mexico would be the equivalent of $2.03 an hour in the U.S.  This is why an estimated 20 to 30 percent of Alcoa workers in Piedras Negras cross the U.S. border twice each week to sell their blood plasma.  They receive $15 for the first transfusion and $30 for the second—almost equal to the base wage they earn at Alcoa.

Over the last three years, the "gratuity" paid by Baxter International for the workers' plasma has risen by 50 percent, while Alcoa's wages have remained stagnant.  Between October 2003 and April 2005, Alcoa workers received a nominal 10 percent wage increase, adding 11 cents an hour to their wages.  But this increase was completely wiped out by a combined inflation rate of 9.5 percent in 2003 and 2004.  Inflation for 2005 is running at 3.4 percent.

When we asked the Alcoa workers if they were better off now than they were three years ago, everyone responded, "no." At best, for a very few, living conditions had remained stagnant, while the vast majority said they were actually going backward and losing ground.

Alcoa is a $23.5 billion multinational corporation.  Yet, at its high tech plants in Mexico, wages have actually been falling behind other maquiladora plants in the area, including, for example Carolina Processing, where women scan and sort coupons for U.S. companies, a far simpler task, for which they are paid $1.88 an hour, which is more than 50 percent higher than the median wage paid by Alcoa.

But for Alcoa, in the global economy, the already below-subsistence wages they are paying in Mexico are now too high, and the deplorable living conditions too extravagant.  There would have to be cuts.  This was the point of the local Alcoa managers threatening the workers in Piedras Negras and Acuña that: "We can hire three Hondurans for every one of you Mexicans."  In its new plants in Honduras, Alcoa pays its workers a base wage of 68 cents an hour, and a fully integrated wage of just 87 cents.  So it is almost true that Alcoa can hire three Hondurans for every one of its highest paid Mexican workers, who earn $2.45 an hour.  Alcoa thought imposing cuts would be easy.  Alcoa workers in Piedras Negras and Acuña have never been allowed a voice.  In 2001, when the workers in Acuña attempted to exercise their legal right to organize a union, Alcoa responded by firing over 250 workers, and to date, not one single worker has been reinstated.  When the workers in Plant II in Piedras Negras caught Alcoa off guard in early 2002 and organized an independent union, Alcoa responded by cutting off all dues money to the new union and refusing to meet with them.  Within eight months, the union collapsed when it became obvious to the workers that Alcoa would never tolerate an independent union and would make them suffer as long as it remained in existence, even if in name only.

 



The Race to the Bottom:  Alcoa tries to impose wage cuts

Alcoa thought it would be easy.  On Wednesday morning, February 9, 2005, Alcoa management called a meeting at the Subaru plant in Piedras Negras to brief the workers on their new wage contract.  The workers were told that they would receive a four percent wage increase, but that there would have to be some "modifications" regarding their benefits.  Alcoa would no longer contribute a matching fund of 45 pesos a week ($4.18) to each worker's savings account.  Transportation would no longer be free.  Workers would now be charged 35 pesos ($3.25) a week.  Those living further away would have to pay $1.50 more.  Vacation pay and "13th Month" bonus would now be calculated on workers' base wage rather than their fully integrated wage, which would cut these benefits by at least 25 percent.  The attendance and punctuality bonuses would remain the same, but would now be paid out every two weeks rather than every week.  Of course this meant that if a worker were late during this two-week period, even once and just by five minutes, they would now lose the attendance bonus for both weeks.  The cutbacks in Acuña were even more draconian.  There, the attendance and punctuality bonuses were now to be paid every three months, meaning that if a worker missed a single day during the three-month period, they would lose their entire three-month's bonus.  Alcoa was calculating that if approximately 80 percent of the workers were currently earning their attendance and punctuality bonuses, under the new structure and extended timeframe, Alcoa could hope to drop the number of workers receiving the bonuses to just 30 or 40 percent.  In the past, Alcoa provided a small stipend for student aid to parents with children in primary school.  It amounted to the equivalent of just three days' wages, but this money for notebooks and pencils was also now being cut.  Further, the workers were told that there would be no wage increase for the next 18 months, despite a 24 percent increase in food costs during the previous 16 months. 

 

 

 The most minimal food needs for an average sized family cost 383 pesos, approximately $35.56, a week in October 2003.  By March 2005, 16 month later, a family's minimal food costs had risen to 473 pesos, or $43.92 a week, which is a 23.5 percent increase.  Rising food costs had far outstripped any nominal wage increase the workers may have won.  It is important to note that the above food costs do not include the purchase of milk, chicken, vegetables, fruit or juice.  Purchasing such goods would nearly double a family's food costs.  The cheapest powdered milk for an infant costs $10.40 a week—more than a day's base wage at Alcoa.  A better-quality powdered milk would cost $14.86.

The workers were stunned and angry.  A flood of hands went up waving to ask questions, but no questions or dialogue were allowed, and everyone was ordered back to work.  When the workers returned to their lines, many started commenting that what Alcoa was proposing was not good.  After some quick calculation, some estimated that they could actually end up losing about 40 to 50 percent of their current wages.  At that moment, the Subaru workers decided to go out on a work action.  The workers described it as a "wave," moving from line to line until everyone stopped.   Some used their cell phones and called workers in Plant I, which also went out.  By 3:00 p.m. that afternoon, Plant II was also out.  All 1,500 dayshift workers in Piedras Negras had joined the spontaneous work stoppage.  It was completely peaceful.  In fact, Plant II was out for just an hour, from 3:00 to 4:00 p.m., but went right back to work and even reached their production goal for the day.

The workers could not tighten their belts any further.  "As it is," they explained, "we are already working just to eat, and to eat poorly."

 The four percent wage increase Alcoa was proposing would amount to an increase of just $2.33 a week—less than five cents an hour.  On the other hand, the cuts in  transportation and savings stipends alone would cost the workers $7.43 a week, resulting in a net loss of nine percent.  And this does not take into account that many workers had not seen a wage increase for over a year, despite inflation of 4.7 percent in 2004 and an expected rate of 3.4 percent in 2005, further eroding the real purchasing power of the Alcoa workers' wages.

Alcoa tried to soften the cutbacks saying that these "modifications" were just temporary.  But that was the same thing Alcoa had said in 2002 when they did away with seniority-based wage increases and instituted in their place, a merit-based system based on evaluations.  At the same time, Alcoa took away the blankets they had always provided as a Christmas bonus (which the workers badly needed, since their homes lack heating, despite the freezing winter temperatures), as well as a year-end transportation bonus so the workers could afford to travel home to see their families.

 


 

 

 Inflation Outstrips Nominal Wage Increases

The compounded consumer inflation rate in Mexico from 2000 to 2004 was 34 percent.

 CONSUMER INFLATION RATE

 

Year

Rate of Inflation

2000

9.495%

2001

6.363%

2002

5.031%

2003

4.548%

2004

4.700%

 Mexico's inflation rate is expected to be approximately 3.4 percent in 2005.

 

 

A Single Mother in Piedras Negras Walks Through Her Basic Expenses 

A single mother of two young children, who worked at Alcoa, walked us through just some of her basic weekly expenses.

*Rent

$27.86

*Electricity

$1.61

*Water

$2.23

*Propane gas for cooking

$2.66

*Food (for 3 people) 
(This was without chicken, meat, vegetables, fruit or juice.)

$37.14

*Babysitter

$12.07

 Subtotal for week:

$83.57

These figures do not include other necessary expenses, such as transportation, healthcare, clothing, children's school expenses, etc.  This woman's weekly income from Alcoa came to approximately $74.28.

 

 Minimum Weekly Expenses for a Family in Acuña

A mother with three children, whose husband has worked for Alcoa for more than a decade explained her family's weekly expenses to us.

*Rent
(for a primitive, two-room, cinderblock house, lacking plaster or windows, with a roof of corrugated metal.)

$19.26 

 

 

Utilities
*Propane gas for cooking

$3.96 

*Electricity 

$2.95 

*Water / trash collection

$2.36 

 

 

*Food
(For a family of five—two adults and three children.  This comes to 46 cents per person per meal for a minimal diet of beans, rice, flour, cooking oil, eggs, coffee, sugar, tortillas.) 

$48.56

 

 

*Household & Personal Hygiene Costs
(Soup, toilet paper, toothpaste, detergent, etc.)

$6.43 

 Even these most basic expenses total:

$83.52

BUT

If this family ate a more nutritious, well-balanced diet including milk for the children and some amount of chicken, meat, vegetables, fruit and juice, this would add $47.90 a week to their food costs.  This would bring the family's expenses to $131.42.

Transportation and weekly school expenses for notebooks, pencils and other supplies at the local public school can add another $9.57 a week per pupil.

This mother estimated that she spent $97.85 a year on used clothing for each of her children, which would come to an average of $1.79 per child per week.

She wanted to purchase a toaster oven, but in Mexico the cost would be $25—far more expensive than it would be in the U.S.

Working at Alcoa, her husband earned less than $72 a week.

 

 

 


 

Alcoa responds—with more repression

Alcoa responded by firing 22 workers and giving written warnings to 74 others.  The 74 who received the warnings were told that if they ever participated in another work stoppage, they would be immediately terminated.

On Friday morning, February 18, the 22 workers who had been targeted for firing were called, one at a time, to attend what they were told was going to be a quality control training session.  When they arrived at the "meeting," management informed them that they were fired, at which point security guards led them out of the factory, "as if we were prisoners."  They were prevented from going to their lockers to retrieve their personal belongings.

There was no discernable rhyme or reason as to why Alcoa had chosen these particular people for termination. The work stoppage was a spur-of-the-moment reaction, neither planned nor led by anyone.

Gerardo Ramón Andrade Duque was one of those fired.  But he was actually at lunch when the work stoppage began and it was not until he returned to his line that he became aware that there was a work action in progress.  Another of the fired workers, Georgine Villaseñor Ríos had just attended a meeting with Alcoa's Automotive Division President, Robert Alexander in Del Rio, Texas, on February 2, just over two weeks before she was fired. Alexander told the workers and religious shareholders at the meeting in Del Rio that Alcoa's plants in Piedras Negras were "his treasure," "his jewel," since they had the best quality.  He extolled the work ethic of his Mexican employees.

Ana Patricia de Luna Duarte was also fired.  She was a coordinator in charge of four assembly lines, overseeing about 70 workers.

 

Alcoa worker, who was unjustly fired, with her disabled son

 

(Her position, making sure that materials arrived as needed and that the assembly lines functioned smoothly, was that of a supervisor in all but name, and pay.  It was a strategy Alcoa developed to pit worker against worker.  This way the supervisors would have little direct contact with the production line workers, and when they wanted to speed up the line, they turned to Patty and the other coordinators to turn up the pressure.)  Patty had an excellent work record over the last seven-and-a-half years, and like the other fired workers, she had in no way led the February 9 work action.

Alcoa was employing a method they had used in the past.  Whenever workers in Piedras Negras stood up to defend their rights, Alcoa retaliated by firing the most outspoken workers, even if there was no direct link between them and the protest.   Getting rid of those workers whom the others looked up to and liked, and who could become leaders, was the best way in management's mind to spread fear and take the wind out of the sails of any potential workers' movement.  Alcoa hoped that by firing these potential leaders, they could cause the rest to bend in submission.

In human terms, corporate strategies like this can have cruel consequences.  Patty's son, José de Jesus, was struck with meningitis as an infant.  He cannot walk without the help of leg braces and a walker.  His legs are pencil thin and bent.  He has a hard time controlling his head and arms.  But José de Jesus is a bright and spirited kid, who won third top honor in his fourth grade class for his excellent grades.  His grandmother stays with him at school because if he drops his pencil he cannot retrieve it.

When we visited José de Jesus in April of this year, he had just returned home after 20 days in intensive care following the removal of a section of his intestine.  José needs physical therapy.  He needs special food and supplements.  He needs care if he is to survive to live a decent life.

Alcoa had no right to fire Patty de Luna, to punish and make an example of her for something she did not do.  We have asked Alcoa to immediately reinstate Ana Patricia de Luna Duarte to her former position, with back pay.  But to date Alcoa has failed to do so. 

At the same time, Alcoa management started threatening the workers.  Director of Human Resources for Plant II, Luis Alberto Trevino, told the workers that if they did not accept the wage proposals, "Alcoa could pick up and leave, and go to Honduras like Levi Strauss did."  This was no idle threat, given that Alcoa had already laid off more than 3,500 workers in Acuña and Piedras Negras over the last three years.

 


 

Alcoa gives the workers a secret ballot

Following the firings, warnings and threats to relocate their plants, Alcoa felt confident enough to allow something they never had in the past—namely to grant the workers a secret ballot to vote on Alcoa's wage proposals.  (Alcoa workers in Mexico had never been allowed a secret ballot vote to express their choice for or against forming an independent union.)  This was going to be Alcoa's trump card.

Right down to the last minute, the threats continued.  The ballot itself, which was presented in late February, read:  You have the opportunity to tell us if your job is worth the trouble"You will decide the future road of Macoelmex [Alcoa's local factory name], your work and your family's sustenance."

The workers were given two options.  A "Yes" vote for Option I indicated that the worker would accept the "temporary" benefit cuts.  A vote for Option II opposed the wage cuts, and in doing so affirmed that "I prefer that the jobs be lost rather than the benefits being modified temporarily."   Alcoa made sure that the options were stark and loaded.

An amazing thing happened—the workers rejected Alcoa's race to the bottom.

In a secret ballot, eighty-eight percent of the workers voted for Option II!  This included both the day and night shifts—more than 3,000 workers in total.  Essentially, the workers told Alcoa, "You are not cutting our wages and benefits any further, and if you insist on pulling your factories out of Mexico, so be it.  But we are not willing to stoop any lower."

A single mother with two children, who voted against the cutbacks, explained to us: "One earns only a little, and they were trying to take about half away.  The truth is, I can barely survive now.  If they take this money out, it is not worth it."

It took enormous courage for the workers in Piedras Negras to stand up to Alcoa, in essence rejecting Alcoa's race to the bottom and refusing to allow themselves to be pitted against workers in Honduras or China.  They would not play that game in which everyone loses.  There are basic standards of human fairness and decency beneath which they would not let Alcoa go.  These workers need our solidarity.

Translation: Alcoa Worker Vote, Feb 2005

DECISION BALLOT 2005

As we have explained to you, the company is going through a situation of economic crisis.
You have the opportunity to tell us if your job is worth the trouble through your FREE, RESPONSIBLE & DIRECT vote.

We present you with two options which will decide the future road of Macoelmex, your work and your family's sustenance.  We ask that you mark with an X the one you choose.

OPTION I

1. I agree to receive a 4% increase in my daily wage scale.

That Temporarily
2. For 18 months, vacation pay, aguinaldo and vacation premium will be made based on my daily wage and not my integrated wage.

3. For 18 months, the savings fund will not be generated and I will not be deducted the 45 pesos a week in savings.

4. That the weekly attendance and punctuality premium will be every 2 weeks within the same rules, for 18 months.

5. To pay 3.5 pesos per trip for company transport when I use it.

6. To not receive the student assistance for the year 2005 and 2006

7. To suspend the system of promotions for 18 months.

OPTION II

I am in disagreement, and aware that the company could take economic decisions that could have repercussions on permanency, and I prefer that the jobs be lost rather than the benefits being modified temporarily.

 


 

Alcoa lashes out in anger

  • For the first time, security guards are inside the plants patrolling the shop floor:  Following the spontaneous work action on February 9, Alcoa stationed security guards inside the plants, for the first time.  The workers explain that, "the guards are inside the plant now watching us.  We are not allowed to talk.  It's like being in prison.   If they see us talking, the guards come over right away to watch us."  Everyone agrees that the tension and repression is worse than it has ever been.  The guards patrol the work areas, passing behind the backs of the workers.
  • Temporary workers hired at the Subaru plant:   Shortly after losing the vote on wage cuts, Alcoa created a new front company called "Arneses Plasticos" and began hiring temporary workers at the Subaru plant in Piedras Negras—on three-month contracts, with significantly lower wages and benefits.  Evidently the three-month contracts can be indefinitely renewed.  Though they enter the Subaru plant through the same main door, the temporary workers are isolated in a separate part of the factory, and guards keep them apart from the full-time workers.  The full-time employees are also forbidden to speak with the temporary workers.  In April, "Arneses Plasticos" was hiring about 20 temporary workers a day.

Of course, the full-time workers view this as a threat, explaining, "If we don't accept the benefit cuts, they'll bring in cheaper labor.  Eventually they will get rid of us."

 

worker neighborhood
  • Alcoa begins moving production lines to Honduras:  A year ago, Alcoa announced that it was opening a components plant in Honduras which, they claimed, would not compete with the wire harness manufacturing plants in Mexico.  That was a lie.

Two full lines of machinery have been moved from Plant I in Acuña and shipped to Honduras.  Plant V in Acuña has already been closed.  Team leaders, mechanics and supervisors from Piedras Negras and Acuña are now in Honduras helping to set up Alcoa's new plants in Progreso and to train the Honduran workers to manufacture the same wire harnesses that were made in Mexico.  To date, Alcoa has cut over 2,000 jobs in Acuña and 1,500 in Piedras Negras.  Rumors are everywhere on the shop floor, encouraged by supervisors, that Alcoa intends to  shift more and more work to Honduras in addition to the three plants and 2,500 workers Alcoa has already set up in Progreso, Honduras.

When plant managers want to speed up the production line, they threaten the workers, "If you don't want to produce, the plant will close and we will send the work to Honduras because there it is cheaper." The workers in Honduras earn a base wage of 68 cents an hour and a top wage of 87 cents.  Hence, Alcoa management's near-constant refrain:  "We can hire three Hondurans for every one of you Mexicans."  Like Alcoa workers in Mexico, any Alcoa worker in Honduras who is even suspected of wanting to exercise his or her legal right to organize an independent union will be immediately fired and blacklisted.  Another similarity is that the vast majority of Alcoa workers in both Mexico and Honduras are forced to work second jobs in order to survive.

But the workers have fought back against the arbitrary speed-ups.  As one worker explained, "First we had to do 13 harnesses an hour.  Now they have raised it to 18.  They speed up the line, but they won't pay us a production bonus." Everyone told us the same thing, that Alcoa was constantly increasing the goals, telling the workers they had to be more efficient and multi-functional.  "They want two of us to do the work three did before."

The workers are fighting back.  They call it "turtle-ism." "If they pretend they are paying us, we'll pretend we are working.  Instead of doing 30 harnesses, we'll do five."

  • Surveillance cameras on the shop floor monitor the workers:  The workers understand very clearly that Alcoa's surveillance cameras are meant "to monitor and intimidate us." One worker was taken into the office where the cameras are monitored. He was shown one of the video screens and told to, "look at the bald guy.  We can see every little hair on his head." He was then warned to be very careful.

Company rules prohibit bringing even a 12 ounce bottle of drinking water onto the shop floor.  If the camera monitors catch a worker trying to take a drink of water while she is on the shop floor, she will immediately receive a written warning.  Workers are also prohibited from bringing snacks, like a candy bar, onto the shop floor.  Alcoa workers are prohibited from forming groups and talking together anywhere in the factory.  Four such infractions caught on camera in a month will lead to a two-day suspension without pay.  A fifth infraction will result in immediate termination without any of the severance pay the worker is due.

  • Workers have to hold clandestine meetings as if they were in China:  As the Alcoa workers have said, the repression now is greater than it has ever been.

The group that over the years has consistently accompanied the Alcoa workers in Piedras Negras and Acuña in their struggle for justice has been the Quaker-backed CFO, Border Workers Committee.  It is an office in Piedras Negras, headed by a remarkable and dedicated person, Julia Quiñonez—herself a former maquiladora worker—has a staff of just two or three people.

Evidently local Alcoa managers feel threatened enough to send spies to monitor and photograph workers entering CFO office in Piedras Negras.  In fact, it is now impossible for the Alcoa workers and CFO to organize open meetings, since spies are always sent to report back to management on what was discussed and planned, and who said what.  Supervisors openly threaten the workers that if they are seen going to a meeting at the CFO, they will be fired.  The Alcoa workers are now trying to organize over the phone and in small, closed clandestine meetings, just as the workers in China need to do.

  • Alcoa workers need permission to use the bathroom:  Workers must seek permission from their team leader or supervisor to use the bathroom and often must wait half an hour or longer before a replacement worker arrives so they can leave.  Permission is typically granted just two or three times per shift.  A supervisor pins a badge on the chest of the worker noting the exact time they left for the toilet.  Their return time is also noted.
  • Alcoa strips the workers of their ergonomic exercise break:  Saying it took too much time, Alcoa management also recently took away the five-minute ergonomic exercise break the workers needed to stretch and change their positions, as well as the five-minute talks on health and safety issues.

A young woman explained the importance of such breaks.  She had to race to attach up to 3,000 circuits a day, constantly sitting bent over in the same awkward position, which affected her back, neck, kidneys and vision.  She needed those breaks.

  • Alcoa workers are prohibited from speaking: If the supervisors catch workers speaking, they warn them, "You can't do it." Caught again, they will receive a written warning.
  • The workers say Alcoa does not look at them as human beings.  "Managers and supervisors tell us, 'When you enter the plant, forget about the world,'—so even if your children come to the factory gate looking for you in an emergency, they won't let you know."
  • Alcoa workers in Acuña lose their night shift differential:  In Acuña, the standard night shift was from 5:00 p.m. to 2:00 a.m., with a half hour of overtime to 2:30 a.m.  This regular half hour of overtime each shift, at double pay, added 100 pesos ($9.30) a week to their pay, acting as a night differential.  Now, Alcoa has cut this half hour of overtime so there is no difference in pay whether you work the day or night shift.
  • Alcoa ignores flood victims:  In April 2004, a huge flood, damaging many workers' neighborhoods and threatening their homes, prevented many Alcoa workers from getting to work.  Alcoa responded by docking their wages.
  • Alcoa claims bankruptcy:  Much more than in the past, Alcoa is dealing in rumors, obviously meant to keep the workers off guard and frightened.  The workers were shocked when we told them that Alcoa was not going bankrupt and showed them Alcoa financial reports documenting that company profits grew by $372 million, to $1.31 billion in 2004—a 40 percent increase over the previous year.
 Alcoa's Profits Grow by 40 Percent

Alcoa's profits grew by $372 million in 2004, reaching $1.31 billion, a 40 percent increase over 2004 profits of $938 million.  Revenues increased from $21.504 billion in 2003 to $23.478 billion in 2004.

One young mother looked really shocked and hurt, stunned that Alcoa would be lying to them:  "Why do they say they are going bankrupt?  Why—if they are making a profit—are they telling us they are going broke?"

Another rumor Alcoa let circulate was that the Fujikura Corporation of Japan, Alcoa's joint venture partner, was about to obtain complete ownership of all the wire harness plants in Acuña and Piedras Negras.  In fact, the opposite was true.  It was Alcoa that was taking full ownership of the plants.

  • Labor relations at Alcoa's Mexican plants are worse than they have ever been:  Every worker we spoke with told us that 2005 has been the "worst year ever," and that the atmosphere at Alcoa is "very tense" and filled with uncertainty and fear.  The workers feel that Alcoa does not care about them anymore.  "We feel like we have water up to our necks, but they don't care about us at all."  All trust has broken down.  Other than Patty, none of the 22 workers unjustly fired by Alcoa on February 18 in retaliation for the spontaneous work stoppage are seeking reinstatement.  When we asked why, they explained that even if they could win their reinstatement after a long struggle, they knew that Alcoa would immediately fabricate another excuse to fire them again, and this time without paying any of the severance due them.  In fact, that is exactly what Alcoa did with over 250 workers the company fired in Acuña in 2001 to block an organizing drive.  Among all the workers who fought long and hard to win their reinstatement, only a handful actually succeeded, only to be re-fired a few hours after their return.  As mentioned earlier, not a singe one of those 250 illegally fired workers has been reinstated.
  • Alcoa blocks the Ministry of Labor from even having an office in Acuña:  Alcoa is by far the largest maquiladora export assembly company operating in the city of Acuña.  Out of a total of 32,000 workers, Alcoa employs 9,000 in its wire harness plants.

Seven years ago, the Mexican government's Ministry of Labor attempted to set up a local office of Labor Conciliation and Arbitration in Acuña.  The office was built and furnished.  But for seven years the building has sat vacant, with the paint peeling and the Labor Ministry insignia fading.

 

 

It turns out that the companies did not want the Ministry of Labor office in their town.  It was inconvenient for them.  So to lodge a complaint, workers from Acuña have to pay for a bus and travel over three hours round trip to Piedras Negras.

  • Falling wages, increasing repression—NAFTA has not helped:  The workers had already told us that they were worse off now than they were three years ago.  While wages have, at best, remained stagnant, basic food costs have risen 23.5 percent over the last 16 months, from October 2003 to March 2005.  "All the prices are going up," the workers explained. "We used to pay seven pesos for tortillas, now it is up to 10.  Conditions are bad."

We asked if NAFTA had helped them.  Their response was, "No.  It did nothing to help us.  The only ones who benefited were the companies.  The workers got nothing.  For us it's worse."  We mentioned that the multinationals like Alcoa frequently say that they are helping workers across the developing world.  That is not how the Alcoa workers in Mexico see it.  "On the contrary, we are the ones helping them.  They are the ones taking money away."

 


 

This report is a follow up to the NLC's June 2002 report, "Alcoa's High Tech Sweatshop in Mexico / Fighting for Worker Rights"  Click here to read it.

You can find a detailed history of this case and updates on the CFO's website:
www.cfomaquiladoras.org



 

 

 

Median wage at Alcoa:  Base wage of $1.21 an hour;  integrated wage of $1.95
A review of Alcoa pay stubs shows a median base wage of 626.88 pesos a week ($58.21, or $1.21 an hour.)  With the attendance and punctuality bonuses included, each worth 133.50 pesos ($12.04) and a food coupon worth 115 pesos ($10.68), the fully integrated median wage for an Alcoa production line worker was $1.95 an hour, or $15.59 a day.  For the 48-hour work week, this comes to $93.60. Given that the cost of living along the border in Mexico is at least 60 percent of that in the U.S., the $1.95 an hour fully integrated wage would be the equivalent of trying to live on $3.25 an hour in the U.S.   /  A second example shows an Alcoa worker earning $56 a week, for a base wage of $1.17 an hour. Including all bonuses, the fully integrated wage was $1.88 an hour and $15.02 a day.

 


 

 

 

 

 

Alcoa's top base wage was $1.41 an hour--$2.45 including all bonuses:  The very highest wage we found was 728.49 pesos, or $67.64 a week, for a base wage of $1.41 an hour.  Including two attendance bonuses (one a special and not paid every week), a punctuality bonus and a food coupon, this worker earned a total of 1,270.46 pesos for the week, or $117.96, which comes to a fully integrated wage of $2.45 an hour.  This worker also had deductions for Social Security health care and rent for her government-supplied house totaling 217.23 pesos, or $20.17, which would drop her take-home wage to $2.04.

 


 

 

 

 

 

A wage scale Alcoa presented the workers in January 2003 shows 11 different job classifications for assembly line workers with base wages ranging from a low of 56.81 pesos a day ($5.27 per day, 66 cents an hour) to a top wage of 105.32 pesos ($9.77 a day, $1.22 an hour).  The median base wage was 86.10 pesos, or $7.99 a day, $1.00 an hour.

 


 

 

 


Alcoa Company Profile

ALCOA Inc:

Alcoa Corporate Center
201 Isabella Street
Pittsburgh, PA 15212
Phone: (412) 553-4707
Fax: (412) 553-4498
Web Site: http://www.alcoa.com/

CEO:

Alain J.P. Belda
Principal occupation: Chairman of the Board and Chief Executive Officer of Alcoa since January 2001

Other directorships: Citigroup Inc. and E. I. du Pont de Nemours and Company. Mr. Belda serves on the board of trustees of The Conference Board, the world's leading business membership and research organization, and is a member of the board of trustees of the Brown University Corporation.

Compensation: In 2003, Alain J.P. Belda took in $9,413,809 in total compensation including stock option grants from Alcoa Inc. In 2004, he took in $5,016,078 in total compensation.

 

Financials: Income Statement Highlights

 2004 Revenue: $23,478,000,000

2004 Profits: $1,310,000,000

 2003 Revenue: $21,504,000,000

2003 Profits: $938,000,000

 

 

  
Alcoa Around the World:
Alcoa operates in 350 locations in 43 Countries

Africa

Australia

Venezuela

Spain

Egypt

Americas

Europe

Switzerland

Ghana

Canada

Belgium

UK

Guinea 

Costa Rica

Czech

 

Morocco

Honduras

France

 

Asia

Jamaica

Germany

 

Bahrain 

Mexico

Hungary

 

China 

US

Iceland

 

India

Argentina

Ireland

 

Japan

Brazil

Italy

 

Malaysia 

Chile

Netherlands

 

Nepal 

Colombia

Norway

 

Philipines 

Peru

Portugal

 

Singapore 

Suriname

Romania

 

South Korea 

Trinidad and 

Russia 

 

 

Tobago 

 

 

Alcoa in Mexico

Alcoa first established a presence in Mexico more than two decades ago. Today, the company has three businesses operating in Mexico that serve the automotive, telecommunications, and packaging and consumer goods markets:
 
The automotive and telecommunications markets are served by Alcoa Fujikura. AFL Automotive bases a key part of its manufacturing operation in Mexico, covering six cities and employing tens of thousands of people. Primary products manufactured by AFL Automotive in Mexico include electrical wiring harnesses for cars, trucks, motorcycles and other vehicles.

In December 2004, the Company signed a letter of intent with Fujikura Ltd. of Japan, in which Alcoa will obtain complete ownership of the AFL automotive business and Fujikura will obtain complete ownership of the AFL telecommunications business. Alcoa and Fujikura hold a 51-49% respective ownership of both through the AFL joint venture. The transaction is expected to be completed in the first half of 2005.