Mine giant Grupo gains upper hand in Sonora

CANANEA, Sonora – The Mexican conglomerate that owns Tucson-based Asarco LLC is winning a long labor conflict south of the border, a victory that could reverberate across North America.

More than three years after a miners strike broke out in Cananea, Grupo Mexico is producing copper again at the huge mine about 50 miles south of Sierra Vista. And it’s doing it without union labor.

The subsidiary that runs the mine is using 3,000 workers hired primarily as lower-paid contractors to restore the mine and resume full copper production. While the apparent outcome is a boon to Grupo Mexico and its Southern Copper subsidiary, it is a worry to the more than 1,000 union Asarco workers in Arizona, who went through a bitter, five-month strike in 2005 and have supported the Mexican union.

Not only do Asarco’s 2,500 total employees work for the same overarching conglomerate, Grupo Mexico, but a proposed merger of subsidiaries would bring the company’s Mexican, Peruvian and American mines under the same direct management.

“For the American and Canadian unions, what’s happening in Mexico is part of their own erosion,” said Graciela Bensusan, a labor researcher at the Metropolitan Autonomous University in Mexico City. “The deterioration of the Mexican unions is a threat to the American unions.”

However, many Cananea residents say Sección 65 of Mexico’s National Miners Union, known as the Mineros, has only itself to blame. They point out that from 2005 to 2007, each worker received huge profit-sharing bonuses, culminating with a payment of more than $30,000 to each worker in 2007.

“To me it was the mine’s golden age,” said Ignacio Borbón, who was a union mine worker for 25 years but opposed the strike in July 2007. “I was very happy.”

Now Borbón has crossed the picket line and is working the same mechanic’s job he used to have – for half the money and no benefits.

Broad Support

The United Steelworkers, which represents Asarco workers in Arizona, has given broad support to Mexico’s National Miners Union, support that stretches from Cananea to Canada.

Pointing out the sites of early-September street battles between union mine workers and replacement workers, striker Guillermo Villa said the United Steelworkers’ support is one of the elements that sustains him. He said a portion of the 1,100 pesos (about $90) he receives weekly comes from the Steelworkers, and the rest comes from his own union.

Although Mexico’s courts have officially ruled the strike illegal and allowed Grupo Mexico to terminate the Mineros, the union is still pursuing other avenues of appeal, and a political settlement still could occur.

Arizona-based Steelworkers leader Manny Armenta, who travels frequently to Cananea, acknowledged Arizona union members occasionally make donations to the Cananea strikers, and that the Steelworkers national office has also made donations. But he said they don’t make regular payments to the Mineros.

“They’re not getting a particular stipend or a paycheck from the Steelworkers directly,” he said.

The Steelworkers also give moral support, and office space, to the general secretary of the National Miners Union, who lives in exile in British Columbia. The general secretary, Napoleón Gómez, fled Mexico in February 2006 after being criminally charged with misdirecting $55 million in union money.

Union loyalists say the accusation was trumped up because Gómez has been fiercely independent, refusing to follow the dictates of the government and the mining companies. The charges were filed soon after he accused Grupo Mexico of “industrial homicide” in the deaths of 65 miners due to a methane gas explosion at a coal mine in Coahuila state.

“We consider him a great leader,” Armenta said by telephone from Mexico City. “He never followed (Mexico’s) government-union buddy-buddy system.”

Like Gómez, top leaders of Sección 65 are also in hiding from Mexican authorities now. The local’s secretary general, Sergio Tolano, said in a telephone interview that he’s being persecuted by state and federal authorities. One of the local’s leaders who is not in hiding, Carlos Esquer, said investigators seem to be trying to pin the acts of early-September rioters on Tolano.

He’s Seen as Hero

The mustachioed image of Napoleón Gómez hangs over Tolano’s unoccupied desk at the Sección 65 offices, and his specter hangs over Cananea, dividing the townspeople.

The dwindling union loyalists – the ranks are down by about 23 percent to 980 since the strike began- consider Gómez a hero. He put in place the profit-sharing payments that soared to about $16,000 per worker in 2005 and doubled in 2007 to an amount that more than tripled the annual wages of many workers.

But townspeople point to him as the hidden force behind the disastrous 2007 strike that robbed the town of its normal source of income for three years.

“He wanted this strike to happen,” said Borbón, the former union mechanic. “We lost a lot.”

The union pointed to a litany of complaints, mostly regarding mineworker safety, as the reason for the strike. But many in Cananea don’t believe it.

Merchant Raquel Taddei, the owner of a stationery store next to the town’s central square, remembers the beginning of the strike as a “time of bonanza in Cananea.”

In her 43 years living in the town, she said, she’s been through many strikes.

“Usually when there was a strike, we were for it. We thought it was just. But this isn’t,” she said. “It’s a shame, this strike, because it was for nothing.”

The town is so divided over the strike that radio reporter Joan Gerardo Pacheco has had to plot a careful course through the news in his morning reports. After the Sept. 8 riot, in which one replacement worker was shot and severely wounded, Pacheco gave four versions of the events over the air: the state’s, the union’s, the company’s and his own firsthand account.

“There are families fighting families,” he said. “There are sons inside (the mine) and sons outside.”

Production boost

Grupo Mexico has taken advantage of its victories over the Mineros in Mexico’s courts by starting a five-year, $3.8 billion investment campaign in the Cananea mine. The conglomerate announced plans to increase production from 180,000 tons per year to 450,000 tons.

Already it has restarted a small solvent-extraction /electrowinning plant, said Rodrigo Heredia, an analyst at IXE Casa de Bolsa in Mexico City. Full production is scheduled for February.

Arizona mining contractors, such as Tucson-based Modular Mining Systems, are benefiting from the re-opening of the massive mine by making sales there. And the benefits are also spreading to other Mexican states.

From her home office near Cananea’s city hall, Norma Brasea has hired many of the people working to reopen the mine. When contractors need workers, they ask Brasea to find them. She said she has hired some people from Cananea, but has chosen many from out of state, in part to avoid local workers with “terrible attitudes who don’t want to work.”

This outsourcing of labor tells Bensusan, the Mexico City researcher, that Grupo Mexico is winning in its effort to undercut independent unions. Since the National Action Party took Mexico’s presidency in 2000, it has worked to squelch labor activism, she said.

Indeed, federal police by the hundreds are acting almost as a private security force at the mine, escorting workers out at shift-change and monitoring the vast property.

Armenta, of the Steelworkers, and others point to the differences between Mexican and U.S. law and politics as evidence that Grupo Mexico won’t necessarily be able to use the same union-breaking tactics in the United States. However, it doesn’t mean they won’t try when the current contract runs out in June.

Arizona union members, he said, “fear that they might want to take the same approach when we go into negotiations with them.”

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