September, 01 2007 |  Download PDF |  Share

The Wal-Martization of Alcoa

A Major Challenge to CAFTA

A Joint Report of The National Labor Committee & COMUN (Community Communication)-Honduras


Workers leaving El Porvenir Free Trade Zone in Honduras.


The Wal-Martization of Alcoa

"They call us associates.  We say we're exploited."

by Charles Kernaghan

One thing is for certain:  Alcoa has taken what were high-tech, good-paying auto parts manufacturing jobs and reduced them to the lowest rung sweatshop production, replete with gross human rights violations, starvation wages and total lack of respect for workers' legal rights.  At least this is the case at Alcoa's four wire harness manufacturing plants in the El Porvenir Free Trade Zone in Honduras.

Alcoa claims it pays the best wages anywhere in the world where its facilities are located.  Alcoa also claims it is not anti-union and insists it is a very ethical company.

The truth is, Alcoa did not arrive in Honduras under the best of circumstances.  After years of worker unrest and blocked organizing attempts left hundreds of workers fired, Alcoa began pulling some of its wire harness production-removing machinery from entire assembly lines-from its plants in Acuña and Piedras Negras, Mexico, and relocating them to Honduras.  In the process, local Alcoa managers told the workers, "we can hire two or three Hondurans for every Mexican."  In mid-2004, when Alcoa arrived in the city of El Progreso in rural Honduras, the workers had never even heard of the company.

One of the first things prospective Alcoa "associates" were told during their training sessions was that quality production was critical since they were "no longer sewing cheap t-shirts,"-but rather would be manufacturing important auto parts for export to the U.S.  What a shock it was for the wire harness workers when they found out that garment workers sewing cheap t-shirts and underpants in sweatshops adjacent to Alcoa were actually being paid wages 60 percent higher than they were!

The base wage of 74 cents an hour at Alcoa's plants meets just 37 percent of a small family's most basic survival needs.  In the last three years, real wages have actually fallen by 13 percent at Alcoa.  Like Wal-Mart employees, Alcoa associates in Honduras have to rely upon charity to survive.  The workers dress their children in clothing and shoes donated to the poor by local churches.  Many Alcoa workers live in small one-room homes that were built by international aid organizations.  Most Alcoa workers borrow money each week to survive.  If an Alcoa worker buys a pair of shoes, they can only afford to do so on an installment plan, paying $2.65 a week.

The workers refer to their small homes, which are constructed with cinderblock walls and corrugated metal roofs, as "microwaves," because with the tropical sun beating down, the rooms quickly heat up like an oven, reaching temperatures of 100 degrees or more.

Even if the wages are below subsistence levels, perhaps decent working conditions and benefits at Alcoa will make up for it?  Unfortunately, it is quite the contrary:  Alcoa is actually lowering standards in Honduras, undercutting even the low end garment sweatshops.

Banner: Stop ALCOA's repression against the workers.

At Alcoa, it is not uncommon for workers to have to urinate, or even defecate, in their clothing after repeatedly being denied permission to use the bathroom.  The bathrooms are also dirty, lacking lights and toilet paper.  Workers who take "too long" may be pulled from the toilet by guards.  There have even been cases of women being made to disrobe and lower their underpants to prove they were having their period so they could use the bathroom more than twice a day.  Workers arriving 15 minutes late can be punished with the loss of two-and-a-half or three days' wages.  With as little as ten minutes notice, workers on the night shift can be ordered to remain working for another six hours, keeping them at the factory from 4:15 p.m. to 6:00 a.m.-nearly 14 hours.  All overtime is obligatory and those who object can be fired.  Many lines work this mandatory 13 ¾ hour shift five nights a week, putting them at the factory 68 ¾ hours a week.  Especially in Plant III, where the air conditioning has been broken for nearly a year, fainting is common as factory temperatures often reach 104 degrees.  Supervisors yell at the workers, "Hey, Donkey, move!" or "Work, you prisoners!"  Security guards patrol the shop floor and if they see someone resting for even a few seconds, they will poke that person with their baton and order them to keep moving.  Especially at night, workers take strong caffeine pills to stay awake and race to meet their high production goals, as well as pills for muscle pain, and later sleeping pills in order to sleep during the day.  Production speed-ups are routine and arbitrarily set by management.  In June, workers were told they had to increase their production from nine harnesses a day to 12.  This was a 33 percent increase in production, with no wage increase.

Under Honduras law, factories are required to provide free transportation to their workers, provide daycare and pay for break time.  Alcoa refuses.  Whereas low-end garment sweatshops in Choloma provide free daycare for their workers' children, Alcoa does not.  While Korean t-shirt sweatshops just a stone's throw from Alcoa provide free transportation to their workers, Alcoa does not.  Alcoa is even blocking access to healthcare for the children of its "associates," despite the fact that these parents are paying for it.  There are also strong unions at some of the garment plants, like the Korean-owned Han Soll factory, which produces for Reebok, and at the U.S.-owned SETISA factory, which produces for Sean Combs.  But Alcoa will use slightly veiled death threats, mass illegal firings, blacklists and threats to close the plant to block workers daring to exercise their legal right to organize.

By early 2007, the Alcoa workers had suffered enough abuse and started a clandestine organizing drive, meeting in small groups of just 20 workers at a time in secret locations.  By April, they had 74 members, and despite the constant fear of mass firings, they had reached 120 members by June.  Then on June 2, 2007, the workers held their constitutional assembly, formed their union and elected their new leaders.  Three days later, after receiving veiled death threats, the fiery woman union leader who had led the assembly was fired.  On June 12, all of the newly-elected union leaders were fired and removed from the factory by armed guards.  On June 15, the mass firings began and by July nearly 90 percent of the union's founding members-the vast majority of whom had seniority-had been fired.

Local Alcoa management told the workers they were completely unaware that there had ever been any attempt to organize a union at Alcoa, and therefore it was impossible for them to have targeted the union members for firing.  Management said that these were just run-of-the-mill layoffs made necessary by fluctuations in production levels.

Alcoa thought it could get away with the firings without a word being raised.  After all, as a Fortune 500 company with over $30 billion in annual revenue, Alcoa is 13 ½ times larger than the Government of Honduras and 1,565 times larger than the Honduran Ministry of Labor.  With the stature of a giant transnational, Alcoa believed it had the right to treat the Honduran government like a Banana Republic.  For Alcoa, this was going to be a walk in the park.

But this time Alcoa may have badly miscalculated.  Alcoa was not counting on so many of the new union's leaders and activists-especially the women-being so fiery, smart and determined.  They were not going to be so easily rolled over.  The fired unionists peacefully occupied the local Ministry of Labor offices for two days, chaining the gates shut.  They held demonstrations blocking the front of the Free Trade Zone.  The workers were able to get support from independent human, women's and worker rights organizations from across Central America, who demanded that the fired unionists be immediately reinstated and who pledged solidarity for their just struggle.

 Charles Kernaghan at a press conference in San Pedro Sula.


Alcoa was not counting on the fired union leaders organizing a joint press conference in San Pedro Sula, with the local worker rights organization COMUN, the National Labor Committee, the United Steelworkers Union (USW) and Central American Human Rights organizations-which was covered nationally on five television stations, radio and in two newspapers.

Nor did Alcoa count on a USW-NLC delegation traveling to Honduras in early August to meet with the illegally fired Alcoa unionists and visit their homes.

Least of all did Alcoa expect that at the request of the United Steelworkers, 15 members of the U.S. Congress would write to Alain Belda, Alcoa's CEO to urge him:  "to reinstate the more than 50 Alcoa employees who were fired in June...days after organizing a labor union to protest low wages, compulsory overtime hours, substandard working conditions and frequent maltreatment... The dismissal of these workers infringes upon the rights established in Honduran labor law and in the U.S.-Central American Free Trade Agreement.  The right to organize a union is also protected by the labor standards upheld by the UN and the International Labor Organization.  Alcoa's employees should not fear dismissal for exercising the rights that are promised by law and recognized by the international community."

Moreover, the USW and NLC are now providing solidarity and support to the fired Alcoa workers in their struggle for justice and to win their legal rights.  And just last week, the Hispanic Caucus of the Teamsters passed a resolution in support of their Alcoa brothers and sisters in Honduras.  The AFL-CIO Solidarity Center may also provide support.

What is happening at Alcoa-Honduras is not how the global economy is supposed to work.  We were told that when companies like Alcoa, with their higher tech jobs, enter the developing world, wages, benefits and working conditions would all improve, notching up standards across the country.   Certainly this has not been the case with Alcoa's auto parts production in Honduras, which is actually lowering standards and even undercutting low-end garment sweatshops.

USW representative Tim Waters and Alcoa workers.


This is a critically important test case.  If Alcoa-a Fortune 500 company-can step on Honduran law and treat the government like a Banana Republic, then the race to the bottom in the global sweatshop economy will have reached new lows.  If Alcoa can so blatantly ignore the U.S.-Central America Free Trade Agreement and ignore the treaty's worker rights provisions as just so many words on useless pieces of paper-then we need to revisit and renegotiate CAFTA, for something is seriously wrong.

Local Alcoa management in Honduras is threatening the workers that if they continue to struggle for their rights, Alcoa will "close the plant and relocate to Nicaragua where labor is cheaper and the workers don't make so many demands or cause problems."

These brave Alcoa workers in Honduras need and deserve our solidarity.



Download the full report

More on CAFTA abuses:  Two additional reports on gross worker rights violations in apparel factories in Guatemala