Reports

July, 01 2005 |  Share

Lear in Honduras

 

Violation of Workers' Rights and Below-subsistence Wages
CAFTA will only reward this model

Lear became one of the first auto parts companies to relocate production to Central America when, in 1994, Lear set up five plants in Honduras, in the rural province of Santa Barbara.  By that time, the government had extended Free Trade Zone status to the entire territory of Honduras, thereby granting Lear a permanent tax holiday.  Lear remains exempt from all corporate income, provincial and municipal taxes, as well as from all import and export tariffs.

Early on, Lear used the two-week paid training period to try to convince its new employees that Lear was the best company in Honduras.  The workers were told that working for Lear, they "would be able to own two pairs of pants, and not just one."  There would be free lunches; parties at Christmastime, Mother's and Father's Day; free transport and a cooperative where the workers could purchase goods on credit.  At any rate, as there are few other job options, especially in rural areas like Santa Barbara, the factories were welcome.

 

Lear factory, Santa Barbara, Honduras

 

Today, Lear has nearly 5,000 workers in five plants—Copan, Esperanza, Cortez, Lempira and Santa Barbara—producing wire harnesses, which are the electrical systems for cars, trucks and trailers.  The workers say their harnesses go to Ford and GM, including for the Ford Ranger, Dodge Durango and Dakota.  The harnesses are sent to a plant in Mexico for inspection and then on to Warren, Michigan.

A little over half a year ago, in October 2004, in a joint venture with Hyundai, the Lear Kyunshin company opened another large wire harness plant in San Pedro Sula. Currently there are 1,000 workers employed there.  But when the plant is up to full production, there will be a total of 3,500 workers.

All these years later, and despite the boom in production, just about all the workers have to show for it is the two pairs of pants Lear promised them.

Hours and Wages

These are modern, high-tech plants producing parts for some of the largest auto companies in the world.  The Lear factories operate around the clock, 24 hours a day, five days a week, with three shifts.

"Shift A" is from 6:00 a.m. to 2:50 p.m.;  "Shift B" is from 2:50 p.m. to 11:15 p.m., and "Shift C" is from 11:15 p.m. to 6:00 a.m.  Workers have to be at their workstations ten minutes before their shift officially starts.  There is one 20-minute meal break during each shift.

The base wage at the Lear factories is 545.10 lempiras, or $29.00 a week, which comes to 66 cents an hour.  With an attendance bonus, known as the Seventh Day's pay, a Lear worker can earn 80 cents an hour and $35.04 a week.   This, of course, means that they cannot miss a day or even arrive a few minutes late during the week.

Lear Wages in Honduras

Base Wage 

Base Wage plus benefits

$ 0.66 an hour 

$ 0.80 an hour

$5.28 a day (8 hours)

$6.40 a day (8 hours)

$29.00 a week (44 hours) 

$35.04 a week (44 hours) 

 

    

After a small deduction for Social Security health care, a Lear worker takes home 77 cents an hour and $33.82 a week.

These are well-below subsistence wages, leaving the Lear workers trapped in deplorable living conditions.  The Honduran government itself (through the Ministry of Labor) sets the minimum food basket cost for the average-sized family at 3,814.80 lempiras a month, which is $202.95—or $46.83 a week.  This is based on a diet of 2,200 calories per day per person.  Many independent non-governmental organizations, and the workers themselves, place the real costs much higher.  However, even using the government figure, we see that the wages at Lear fall 28 percent short of even meeting a family's basic food needs.  And, this does not take into account rent, utilities, clothing, medical needs, daycare and other daily necessities.

Base Wages in Honduras fell 33 percent between 2000 and 2004

In 2000, the Honduras government set the legal minimum wage for garment workers at 63.3 lempiras per day, or $4.09 given the exchange rate at the time, and 51 cents an hour.  By 2004, the daily minimum wage had increased to 89.7 lempiras, or $4.88 a day, and 61 cents an hour.  This ten-cent-an-hour increase amounted to nominal 19.3 percent increase in the minimum wage. 

However, over the same period, the compounded inflation rate in Honduras totaled 53 percent, far outstripping any nominal wage gains.  Honduras workers have actually lost 33 percent in terms of the real purchasing power of their wages over the last four years.  

 

 

Lear Wages Fall 28 Percent Short of Meeting Even a Family's Basic Food Needs

A brief review of some typical expenses the workers shared with us clearly demonstrates how inadequate wages are at Lear and the other maquila export factories, failing to provide for even a small family's most basic needs. 

These expenses are based on a family of three people:  a mother, a father, and a two-year-old son.

 

Average expenses
per week
 

*RENT
 (one room without indoor plumbing, using an outhouse and cooking with wood)

$6.75
 
   

*ELECTRICITY  

$0.86
   

*WATER
 (not potable, meant for washing)

$1.33
 
   

*DRINKING WATER 
 (one five-gallon jug of potable water)  

$0.90 
   

*MILK FOR A TWO-YEAR-OLD SON
 (least expensive powdered milk)

$6.12
 

*DAY CARE
 (least expensive day care with a close family relative)

$5.32
 
   

*BASIC FOOD NEEDS
 (relying almost exclusively on rice, beans, tortillas and occasionally eggs)

$47.88
 
  $69.16 




 
If a close relative were unavailable, even the least expensive outside informal day care would cost $18.62.  A more adequate diet including chicken once a week and some fruit and vegetables would cost approximately $69.16 per week.

So even these most basic essentials for a small three-person family range from $69.16 to $103.74 per week.  This means that the minimum wage of $28.60 a week meets just 28 to 41 percent of even these very limited expenses.  Even the highest wage of 86 cents an hour and $37.84 a week—including the base wage, attendance and production bonuses—would meet just 36 to 54 percent of these weekly costs.

And we have not even begun to speak of other essential necessities such as transportation, clothing, medical expenses, and the myriad of other daily needs, let alone savings or even the most modest entertainment.

No worker can save money on her current wages, not even someone who is single.  Many workers resort to borrowing in order to survive, repeatedly running up debts of 400, 500 or 1,000 lempiras, which has to be paid off at an interest rate of 10 percent a week.  So just the interest rate on a small 400-lempira loan is $2.13 a week.

Many, if not the majority of workers, look for second jobs to survive, in construction, cutting hair, making deliveries, providing day care or selling small things such as sweets on the informal market.

Workers told us that just in the last year, the price of rice and tortillas rose 50 percent, while a tank of propane gas was up 25 percent.

Even the cheapest four-burner "Atlas" stove must be purchased on credit, costing 400 lempiras a month, stretching out over 15 months.  This means a deduction of $4.91 a week for the worker's wage.

The workers in Honduras know their country is poor and they do not expect to live like the middle class does in the U.S., but they are seeking wages which will at least allow them and their families to live with a modicum of decency, albeit far below the standards of the people who buy the products they make. 

Visit to a Lear Worker's Home in Santa Barbara

Esperanza—we will use a fictitious name so she is not fired in retaliation for having spoken with us—is married and in her late twenties.  She has worked at Lear for the last three-and-a-half years.  Her husband is a construction worker.  They have no children. Esperanza showed us around her one-room home.  The walls were made of crude cinder-block without plaster or paint, and the roof was corrugated tin—which leaked until her husband blocked the holes with plastic.  The floor was concrete.  In addition to the door, there was an opening for a window, but since they could not afford glass, the opening was covered with cloth.  The room was very hot and stuffy, and noisy since it was located just yards from a major highway and there was a constant roar of buses and trucks.  The traffic caused a lot of dust, but the house was immaculately clean.

 

Esperanza in her home

 

The kitchen was a makeshift oven put together of mud and concrete, fueled with any wood they could scavenge.  The "shower" was a 30-gallon drum of water in an area surrounded by cardboard, where one used a cup to douse oneself with water.  The bathroom had no door; it was really just a hole in the ground with a toilet bowl over it.  There was no indoor plumbing.  We asked if they had a phone.  She looked surprised and asked, "how could we ever afford that?"  Her husband had built an extension onto the house using cardboard, plastic and scrap wood from his construction site.  The household vehicle was a bike.

 

Makeshift oven

 

The rent for the room was 500 lempiras a month, or $26.60.  Each 30-gallon drum of water cost $1.33—but that was just to wash with.  Drinking water cost 90 cents for each five-gallon jug.  Electricity cost them $2.13.  To stretch their money, they ate mainly rice and beans with tortillas, only occasionally indulging themselves by sharing an egg.  Even this bare-bones diet cost 600 lempiras a week, or $31.92.

 

shower

 

After working for Lear for the last three-and-a-half years, Esperanza had no savings, and no prospect that her life would improve.  It was quite the opposite, she explained.  She was worse off now than three years ago and was falling further behind every day as prices were rising faster than her wages.

Every Lear worker told us the same thing.

"The wage is not enough.  We have to pay rent, our children get sick sometimes, and it's not enough.  I bought a refrigerator on credit, to start a tiny business so my wife could sell refreshments to help our home, because the wage is not enough.  They don't know how we live, they say they pay too much.  They don't realize that there are workers who pay rent, that have children, one or two.  They don't want to think that they sell our products for a good price.  They should pay us a production bonus—that would be fair."

Worker after worker wanted to speak out.  "Our wages are not fair.  After all that you have to do.  And it's not enough.  I think we should receive more because these products go abroad and I think that the product is well paid there.  It's not fair that with just one harness, they can pay the whole production line.  They should think about the fact that we are human beings and we work hard."

 

 
bathroom

 

We were shocked when the Lear workers told us that women sewing basic T-shirts in nearby apparel factories were earning up to twice as much as they were.  With production bonuses, an experienced sewer could earn up to $69.17 to $79.80 a week—which is more than double the $35.04 that the Lear workers are earning.  It does not make sense that auto parts workers in high-tech factories, working for a giant corporation like Lear should be earning less than workers sewing simple T-shirts.

In the United States, Lear is a good company, perhaps even ranking among the top best employers in the country.  In Honduras, Lear workers have no voice.  Their every action is minutely controlled by a system of rewards and punishments.  There are guards in the factories.  Management has cultivated and bribed some "confidence employees" to spy on their co-workers.  Freedom of association is absolutely denied.  In fact, anyone who is outspoken in seeking his or her rights is targeted for constant harassment in an attempt to get them to quit.  If that fails, they will be fired under the pretext of low efficiency.

Working for Lear:  Humiliation and Abuse

  • "Bend Over":  Job applicants must first go to the Lear clinic and see Dr. Orellana.   The first thing he asks the men to do is to lower their pants and underwear and bend forward with their face to the floor and to grunt, exerting all the physical force they can.  The doctor then feels around their groin area, checking for signs of a possible hernia.  Anyone with a hernia is not hired.

The workers say this is humiliating and they feel like slaves being sold at market, where their strength is the only thing that counts.  They comment that they have seen on TV how similar things happened hundreds of years ago.  They told us, "Maybe the next step is putting chains on our feet."

  • Pregnancy tests:  Women applicants also go to the Lear clinic for a urine analysis and mandatory pregnancy test.  Anyone testing positive during the first two months of employment is terminated.
  • Body searches:  Lear workers are patted down and searched as they enter the factories.  Guards search for snacks such as candies or chewing gum, which will be confiscated from the workers, since this is a violation of company rules.
  • Mandatory overtime:  Though excessive overtime is not a problem at Lear, when there is overtime, it is mandatory.  For example, on Saturday, April 9 and again on Thursday and Friday, April 21 and 22, Shift A was required to work overtime—eight hours on Saturday and three hours—till 6:00 p.m.—on Thursday and Friday.

If a worker cannot stay, they are sent to the Human Resources office and given a written warning.  With three such warnings a worker can be fired.  Each warning also brings a 500-lempira deduction from the severance pay legally due a worker when they stop working at the factory.  This penalty equals the loss of almost a full week's base wage.

  • Arrive five minutes late and lose four-and-a-half days' pay:  Lear rewards perfect attendance and punctuality with a 150-lempira ($7.98) a month attendance bonus, which is the equivalent of a one-and-a-half days' wages.  However, there is a catch.  Lear only pays the bonus every three months.  This means that in a three-month period, if a worker misses a single day or arrives five minutes late even a single time, they will lose their attendance bonus for the entire three-month period, amounting to a loss of 450 lempiras, or $23.94, which is the equivalent of four-and-a-half days' base wages.

The same evidently holds true for sick days.  A worker missing a day, even with a written note from a doctor at the Social Security clinic confirming the illness, will be docked for the sick day as well as for the Seventh Day's attendance bonus.  This means the loss of two days' wages.  If the attendance bonus is also taken away, this means that for taking a single sick day, a Lear worker could lose more than a week's wages.

The workers also note that if they arrive five minutes late, company security guards take them to the Human Resources office, as if they were criminals.

Nor do the workers fully trust the company doctor.  One worker told us, "The company doctor will never ever say I am sick.  Why?—Because he is on the side of the company, so he will never say a worker is sick."

  • Constant speed-ups and pressure to meet goals:  "There's too much pressure for that wage":  Every Lear worker spoke of the constant pressure they face at work.

"The engineers are only interested in production, they aren't interested in the workers."

"It doesn't matter if you are sick.  They want you programmed like some sort of machine.  They don't care how.  They just tell you to get it done.  Then if you reach the production goal, they increase it the following week."

"All the managers say is 'hurry-up, hurry-up."

The Lear workers also spoke about recent speed-ups on the production line.  If in the past there were 20 people in a production unit, "they are laying people off, but still expect 10 people to do the work 20 did before."

The workers explain that the rotary table carrying the harnesses is in constant motion, and that they are on their feet all day, walking back and forth in a five- to six-and-a-half foot area as they assemble the harness.  They are given about a minute to complete each operation.  Then they have to race back to the starting point to keep up with the rotary, which is bringing another harness to be assembled.  This goes on all day.

Workers told us of the following cases: 
  • "We have the case of one of our co-workers who died in the plant.  He went to the doctor all the time, and the doctor would send him back to the production line saying, 'come tomorrow and I'll give you a sick day then.' He went to the doctor the following day, and he told him the same thing again and sent him back to work.  Finally, they allowed him to go to the Social Security hospital.  He had stomach cancer and was bleeding.  He died three or four months ago.  He was a multi-functional worker whose name was Wilmer Orlando López, just 22 years old.  He had worked at Lear for three years."

Lear factory in Santa Barbara, Honduras


  • "Three months ago, a pregnant woman lost her child at work.  The supervisor said it wasn't his problem.  Her name was Delsia.  She worked on Line #17 in the Santa Barbara factory.  This happened in December 2004.  When she came back to work, they fired her on March 4, making up a story that it was for low productivity.
  • "Last fall an operator crushed three of his fingers working on the press."
  • "Someone was sick all last week [week of April 11] but the supervisors wouldn't listen to him.  On Friday [April 15], he suffered a brain hemorrhage and is now in the Social Security hospital."

 

  • Lear workers must get permission to use the toilet:  Lear workers have to get permission from their team leaders to use the bathroom.  Often this means a long wait, since a multi-functional worker must be freed up to take the worker's place on the assembly line.  By the afternoon, the bathrooms are always out of toilet paper.  This means the worker has to go to the Human Resources office to ask for toilet paper.  Armed security guards in the factory stop the workers asking them where they are going.  At the Human Resource office the workers are scolded, "You shouldn't be using so much toilet paper.  It's costing the company too much money."    Eventually they dole out a little bit of paper and the worker has to walk through the factory holding the toilet paper in his hand.  The workers say the whole process is humiliating.  "It's as if you were in prison.  The guards walk around watching.  'No you shouldn't go there.  Go there.'"

On the assembly lines or units, the workers are on their feet all day.  If a guard sees a worker even trying to half sit down to rest for a few seconds, they race over telling the worker to get up.  "You're a pure prisoner.  Nobody is allowed to sit down."

  • Spying on the workers:  Lear uses a system of team leaders to oversee the production modules.  Unlike supervisors, Team Leaders are not part of management.  They report to the supervisors.  This accomplishes two things for Lear.  It keeps the supervisors (and management) at arm's length from the workers, while at the same time pitting worker against worker in the constant pressure to produce.  Team Leaders get paid a little more than the production line workers do, and Team Leaders are evaluated every six months for wage and benefit increases.  Management tries to pick as team leaders those employees they have the most confidence in.  It does not always work, but with encouragement from management, some Team Leaders spy on their co-workers, reporting back to Lear management what the workers are thinking, saying and feeling.  The goal is to weed out any troublemakers or workers who are too outspoken.  One woman explained it like this:  "They treated me as a bad worker.  I'm counted among the worst because I claim my rights, and that's happening with a lot of operators.  When we claim our rights, then they begin to harass you.  Even going to the extreme of making you quit."  

Of course, anyone even suspected of wanting to organize a union will be fired.  The workers told us that "Team Leaders are the biggest frogs [meaning, spies] there are.

  • Total suppression of the right of freedom of association:  There is no right to organize at Lear factories.  As already mentioned, Lear has a history of firing workers who are outspoken in defense of their rights and who stand up to the company.  This is even more the case with union activists.  If management suspects a worker is involved in organizing, that person will be targeted for constant harassment, with the goal being to drive them to quit.  If pressure does not work and they will not quit, then they will be fired on trumped-up charges, like low productivity.

Such was the case with three activists who were fired in early March.

Doris Jeaneta Cartegena was fired on March 4, 2005, along with Roberto Alirio Gonzales.  Then, on March 6, Maria Cristina Cartegena was also fired.  These illegally fired workers are fighting for reinstatement.

This is how the system operates.  Doris Jeaneta Cartegena was taken to the Human Resources office where she was asked whether or not she was in a union.  Ms. Cartegena replied, "No."  The Human Resources chief, Carolina de Arriba said, "No.  We know you are.  But that isn't the reason we are firing you." Miguel Ortega, a manager who came out of Lear's Mexican plants, was also there and told Ms. Cartegena that he had "seen her, along with some others, going into a union office."  Ms. Cartegena's termination letter stated that she was being fired for "low output in realizing assigned work"not working well"and causing delays in production."  It was all fabricated.  Ms. Cartegena was a multi-functional worker and was always on her feet moving, running to cover for missing people, getting supplies or taking over for the team leader.  "In truth," Ms. Cartegena said, "I never rested even for a minute."  Sometimes the plant managers were very blunt, telling the workers, "We're not going to allow a union.  Never." The managers threatened the workers, "if we find you are a unionist, you will be fired and will never be able to get another job"If that is how you are, you'll never get work."

One manager had heard rumors going around the factory that a union was being formed.  "If a union is formed," he stated, "we will close the factory."  He went on to add, "In Mexico, a factory was closed because it had a union and if it can happen there, it can happen here."

  • Lear workers want the right to organize:  We asked, what would happen if the workers' legal rights to freedom of association and to organize were in fact respected?  At once, the workers said that if their co-workers did not have to fear being fired, everyone would want a union.
  • Firing older workers:  A policy seems to be developing at Lear to force out or fire "older" workers so they can be replaced with younger, more energetic workers.  One worker described what is happening:  "When they give you a job, its because one is good for work, but once you have been working for five years, they say you are no good any more.  In truth, it's not like at the beginning when you went in to work with great desire.  The thing is, you still have the same desire to work, but after three or five years, and you are still at the same wage, you feel disillusioned."  Evidently, Lear does not want to keep experienced people around, who over the years have learned their rights and who know they deserve a fairer wage.  It is more convenient for Lear to bring in another crop of inexperienced young people who are eager to work, who will not ask questions, and who may even work for less pay.
  • Cheated even at the end:  When management forces workers to quit, or if that does not work fabricates charges to fire union activists, outspoken and "older" workers, these workers then have to fight and negotiate with Lear over how much severance pay they will receive.  These workers never receive 100 percent of what is legally due them, and more often than not have to settle for 60 percent of what is owed them.

Lear, a proud company in the U.S. with a well-deserved reputation, has become something quite different offshore in Honduras.  Perhaps this is what happens to companies that are no longer legally held accountable to respect fundamental labor laws, and no longer have to deal with unions to negotiate wages, benefits and democracy on the shop floor.

 

Lear worker's kitchen

 


CAFTA, with its weak and unenforceable worker rights protections, will only reward and exacerbate Lear's current abuses in Honduras, clearing the way for this to become the standard model of labor-management relations.  Tied to this is the standard, flippant corporate response—that if it were not for Lear and the other companies, the Honduran people would be worse off, forced to turn to drugs and prostitution.  According to the corporations, if we try to defend the rights of Lear workers in Honduras, we will only be hurting the very people we intend to help.  If Lear's business model in Honduras is challenged, Lear will have no choice but to cut and run, shutting down the plants and moving elsewhere.  This corporate logic only leads downward, with no end in sight.  More than 40 percent of the world's population, 2.74 billion people, are trying to eke out an existence on less than $2.00 a day.

The only way to raise wages and protect workers' rights around the world, is to fight for them.

 

ADDENDA

 

Worker Pay Stubs:

 

worker pay stubs

 

 

  

Lear Plant Documents:

 

Lear plant documents

 

 

Based on U.S. Customs Documents:

 

Shipper 

Consignee 

LEAR AUTOMOTIVE EDDS HONDURAS S.A. 

LEAR CORPORATION 

KM 23 CARRETERA A OCCIDENTE 

2000 WALTER GLAUB DR 

NACO, SANTA BARBARA HONDURAS C.A. 

PLYMOUTH, IN 46563 

 

ATTN. WALTER WILDS 

 

574-935-6237 

 

 

Packaging Information 

Shipment Detail 

Weight: 14000 KG 

Country of Origin: HONDURAS 

Quantity: 12650 PIECE 

US Port: 2002 NEW ORLEANS 

 

Estimated Value: $172,040.00 

 

Arrival Date: 11/17/2004

 

 

Description: HARNESS 

 

 

 

Shipper 

Consignee 

LEAR AUTOMOTIVE EDDS HONDURAS S.A. 

LEAR CORPORATION 

KM 23 CARRETERA A OCCIDENTE 

2000 WALTER GLAUB DR 

NACO, SANTA BARBARA HONDURAS C.A. 

PLYMOUTH, IN 46563 

TELEPHONE: 504-5451800 

ATTN. WALTER WILDS 

504-6721461 

574-935-6237  

 

 

Packaging Information 

Shipment Detail 

Weight: 14000 KG 

Country of Origin: HONDURAS 

Quantity: 16068 PIECE 

US Port: 2002 NEW ORLEANS 

 

Estimated Value: $172,040.00

 

Arrival Date: 11/02/2004 

 

 

Description: HARNESS