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Home> CFO in the Media 2001
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Dignity Is the Reward

La Jornada
Histories of Maquilatitlán
Sunday July 1, 2001

By Ricardo Hernández

Today, Carrizo Manufacturing no longer exists, although it once employed 900 workers. Juany Cázares and Paty Leyva were two of them.

They used to sew Disney children’s pajamas and men’s pants for Carrizo, working at break-neck speed. By February 1999, however, they noticed that production was decreasing. Entire shifts were sent home for days, which then stretched into weeks.

Juany and Paty live in Piedras Negras in the Mexican state of Coahuila. They have three children each, and their husbands have also worked for many years in maquiladoras like Carrizo. Maquiladoras are foreign (primarily U.S.) owned plants located on the Mexican side of the border with the United States. They assemble finished goods for export, also mainly to the United States. The maquiladora industry is a cornerstone of the Mexican economy, particularly since the implementation of the North American Free Trade Agreement (NAFTA), and the Mexican government is the industry’s very enthusiastic supporter. Today there are more than 3,000 maquiladoras, 80 percent of them located in Mexico’s northern border states. Together, these firms employ almost one-and-a-half million people. Maquiladora production represents approximately 45 percent of the country’s total exports. In 2000, 89 percent of that total went to the United States, amounting to 148 billion dollars.

Carrizo was a wholly owned subsidiary of New York–based Salant Corp. Facing an extremely competitive environment as a result of the global dismantling of trade barriers, apparel and textile producers are constantly restructuring their operations — buying and selling businesses, licensing new brand names and discontinuing others, outsourcing most of their manufacturing, moving from one country to another, repositioning themselves in global markets, and focusing their product lines. At the time this story began, Carrizo made John Henry and Manhattan dress shirts, Disney and Warner Bros. blanket sleepers, and Oshkosh B’Gosh pajamas, as well as slacks for Sears & Roebuck’s Canyon River Blues label.

Workers Versus the Company, the Labor Authorities — and the Union

As the weeks went by in February 1999, Carrizo workers saw their hours cut back so much that they were taking home only half of their normal pay. Rumors circulated that the company was going to declare bankruptcy.

Juany Cázares, Paty Leyva and others at Carrizo began to mobilize, warning their fellow workers of what was undoubtedly coming: the closing of the plant and the consequent loss of 900 jobs. They challenged the leader of their union local, a woman who was urging workers to understand the company’s financial problems. Mexico’s principal labor confederation, whose affiliates include thousands of union locals all over the country, has historically been aligned with Mexico’s government and its economic policies, which have strongly supported a favorable climate for foreign investment.

Meanwhile, Carrizo managers had already come to an understanding with the local labor authorities and local union leadership. They hoped to avoid fulfilling the company’s legally mandated obligation to make substantial severance payments to laid-off workers. The powerful tripartite alliance of company, union and government was resolved to pay as little as possible. Workers were told that if they complained, they could lose everything, because the company would simply leave the country without paying anything at all.

Under Mexican labor law, severance payments are determined by adding various entitlements to the base salary then multiplying the sum by the length of service. At Carrizo, the company relied on manipulated calculations that eliminated many workers’ benefits.

For the Carrizo workers to derive their own figures was not easy. The workers were nonetheless able to figure out the amounts owed to them because previously, over the course of months or even years, they had participated in study groups organized by the Border Committee of Women Workers (Comité Fronterizo de Obreras or CFO), a grassroots organization of maquiladora workers. The CFO is a partner of the Mexico-U.S. Border Program of the American Friends Service Committee. AFSC helped initiate the CFO 20 years ago, becoming a pioneer in seeking concrete solutions to the problems associated with the integration of the two countries’ economies, a process which has had a considerable negative impact on the lives of women workers and their communities. Over the years, the AFSC and the CFO have learned a lot from their direct contact with the human face of globalization. Thousand of workers, supported by both organizations have achieved many benefits: correct payment of extra-hours; just severance payments; profit sharing; elimination of safety risks in the workplace; installation of extractors to extract hazardous fumes and dust; stopping of inappropriate behavior by supervisors; and wage raises in small and big companies.

On a world scale, the Mexico-U.S. border has served as a laboratory for free trade over the thirty-six years that have passed since the first maquiladoras opened. As far back as 1965, employers and government officials from both countries decided to facilitate the establishment of “twin plants” on both sides of the border, a job creation strategy designed to ultimately discourage Mexican migration to the United States. In fact, maquiladoras have never served as a disincentive to migration; the jobs have never been good ones. Nor has the “twin plant” concept ever become a reality.

Juany and Paty had worked for thirteen and five years, respectively, for Carrizo Manufacturing. They liked working there, partly because that maquiladora had better wages in comparison to others in town. These better conditions existed not because Salant executives in New York were unusually compassionate people, but because the rank and file had struggled persistently to improve working conditions and ensure the implementation of their collective bargaining agreement, with or without the support of union officials.

Juany and Paty were part of that collective and largely invisible effort. For more than a month, they and many other members of the CFO set out to meet with hundreds of their coworkers, one by one, to make them aware of the deceit that was being practiced against them.

Corporate Chicanery

Since my office is based in the United States, the CFO asked me to obtain more information about the finances of Salant Corp. Salant does not have a web site; even if it did, it would not include the information needed by the workers. It was by checking documents filed with the U.S. Securities and Exchange Commission (SEC) that I learned that Salant had decided to focus on its Perry Ellis line of men's apparel and to sell its Children’s Apparel Group as well as other licenses and distribution centers in the United States, including one in Eagle Pass, a small Texas town that lies just across the border from Piedras Negras. Both cities are two-and-a-half hours south of San Antonio, Texas.

I searched through hundreds of pages to find the information that would best serve the workers and translated it into Spanish, adding written summaries that the CFO used in its meetings and vigils outside the plant. In several phone consultations, we discussed the implications of this information and possible scenarios for Salant’s restructuring plan. Part of the CFO’s campaign to expose the company’s actions involved making daily phone calls to a popular radio talk show in Piedras Negras. One day I myself called the talk show from 2,000 miles away in Philadelphia, Pennsylvania, to provide information about Salant. Together the workers and the AFSC were able to counter the misinformation spread by management and union officials.

Carrizo Manufacturing closed its doors in March 1999. The true motive for the closure was neither bankruptcy nor relocation to a place with cheaper labor. Under its restructuring plan, Salant was simply selling all operations unrelated to Perry Ellis. Its financial problems would be solved by an $85 million line of credit approved by a commercial services group. Official documents filed by Salant with the SEC clearly stated that Salant’s restructuring would not affect its ability to meet its obligations to clients, suppliers or employees.

A few days later, the workers’ suspicions were confirmed. At the entrance to the plant was posted a list of their names along with the amount of their severance payments as determined by Carrizo management. The amounts posted fell as much as 75 percent below what the workers were legally entitled to. Things came to a head as the workers were informed they had only a few days to pick up their severance checks. Some 400 workers sought to convince the other 500 not to pick up their checks, in order to preserve their right to demand the full severance payment required by Mexican law. Some of the workers did not understand their legal rights; others desperately needed the money after two months of taking home only half of their normal pay.

It was a moment of great tension. All of the workers agreed on the importance of resisting, but they were also afraid that the company would leave the country without paying them anything. In the end, all 900 agreed to accept the payments, while resolving to continue their movement through other means. When the workers picked up their checks at the offices of the local labor board, they were asked to sign a sheet of paper listing their names and the amount of each check. This list, labor officials explained, was supposed to keep track of disbursements.

Their Own Best Advocates

In the succeeding weeks and months, the extent of Carrizo’s duplicity was revealed. For example, Antonia Figueroa, who had worked for Carrizo for twenty-seven years, received a severance payment of $3,900. According to the CFO’s calculations, she was legally entitled to $15,806. Many other workers were in the same situation. The company’s arithmetic was especially prejudicial to workers with the most seniority. Furthermore, at the local labor board, Juany and Paty found out that a cover letter had been added to the lists signed by all the workers. This letter stated that by signing they were resigning from Carrizo and waiving their right to pursue any further legal action against the company.

The workers decided to sue Salant Corp. in the Mexican courts. They assembled documentation for 185 workers and consulted with several Mexican experts in labor law. As strategy for the case was developed, CFO representatives, especially Julia Quiñonez, the group’s coordinator and a former maquiladora worker herself, ended up explaining to the lawyers how to interpret Mexico’s labor code as well as the scope of the law. Among other things, this case demonstrated that the CFO’s knowledge of labor rights in the maquiladoras is the most sophisticated in all of Mexico. Most important, the people who hold that knowledge and who communicate it best are maquiladora workers themselves: they are their own best advocates.

By mid-1999, the Carrizo workers decided they had to go to New York City to meet with Salant’s top management. AFSC’s task was to arrange the meeting. The company totally refused to meet with us, but Juany, Paty and Julia set off nonetheless on a speaking tour of Washington, Philadelphia and New York.

Some labor rights advocates in Mexico asked the CFO representatives why they wanted to meet with Salant executives, since they had already signed off on their own resignations. Carrizo workers had earned $90 a week, considerably more than the average of $35 earned by most maquiladora workers along the border — so why were they complaining? The women of the CFO responded that they wanted not only to obtain a just severance payment, but above all to let the executives know that the workers were fully aware of how the company had tried to cheat them. They also wanted to set a precedent in the overall struggle for workers’ dignity.

“Family” meeting in New York City

As we tried to obtain a meeting with Salant executives, AFSC and the CFO gathered expressions of support from the Interfaith Center for Corporate Responsibility, members of the U.S. Congress, the AFL-CIO, and the garment workers union, UNITE! When we arrived in New York City on October 18, 1999, however, Salant was still saying no.

The following day, with just a few hours notice, Salant finally agreed to a meeting. UNITE! officials had established contact with company executives the night before, and the firm had also received a fax from several members of the U.S. Congress expressing concern for the Mexican women. Salant was facing pressure on several fronts.

Perhaps to avoid any legal repercussions, the executives asked to meet us not at Salant’s offices, but at UNITE! headquarters in Manhattan. We were expecting to meet only with Louis Matielli, the company’s vice-president, who had already stipulated that he would listen to the workers but would not negotiate anything. Salant’s chief executive officer, Michael Setola, however, unexpectedly showed up.

At the meeting itself, Juany Cázares and Paty Leyva were a little nervous at first because of the confrontational demeanor of Setola and Matielli, who looked like they expected to meet with the lawyers of a rival corporation. As the meeting unfolded, however, not only did Juany, Paty and Julia not become intimidated, they also found the words to tell their story in a convincing and powerful way. Reflecting on her thirteen years in Carrizo, Juany commented, “the former American manager at Carrizo used to tell us ‘I want you all to feel comfortable here because we are all family’ and I believed him, and for that reason I used to reach 200 percent of my production quota for the company. That’s why I don’t think the severance payments we received were just.” Julia spoke about the many loyal employees who had dedicated a good part of their lives to the company and who were the ones most affected by the insufficient payments. As he listened to the women, Setola seemed to soften up. He said that he would investigate the case of the 185 workers and acknowledged receipt of the CFO’s petition for extra compensation.

In the end, however, Michael Setola — a corporate manager who in 2000 earned a base salary of $700,000 and received a $650,000 bonus (which together equal 271 times a year’s pay for Juany Cázares); who was provided with an automobile allowance of $680 a month, a housing allowance of $3,000 per month and stock options — did not compensate Antonia Figueroa and other Mexican workers with many years of seniority. The total requested by the workers was $800,000, which represents only 1.43 percent of Salant’s annual gross profit of 56 million in 1999.

From Disney to Dockers

The CFO’s legal complaint was ultimately filed with the Mexican labor board. Since labor boards have proven to be partial to business interests, it was not a surprise that after one year the labor authorities decided that there was not grounds to give the workers a favorable solution for their case against Carrizo. Still, what Juany and Paty learned about their power and own capacity was a very important lesson.

Today, two years after the closing of Carrizo Manufacturing, its 900 former workers are in one of three places: in Piedras Negras working for other maquiladoras; in the interior of Mexico struggling to find a job; or in the United States where they had to emigrate in order to provide for their families, as was recently the case for Juany. At least temporarily, Juany today lives and works somewhere in the middle of Texas.

Many of those who remained in Piedras Negras went to work for Dimmit Industries, a maquiladora making Levi’s Dockers. On June 28, 2000, after a series of stoppages, the 1,600 workers at Dimmit forced the union leader (and his supporters in management) to convene a union assembly, where the majority democratically elected a new general secretary for their local. Mixed among the Dimmit workers were the former Carrizo workers, back in action, including Juany and Paty, who were advising the workers from outside the plant.

How Do We Measure Success?

Progressive foundations and agencies for international cooperation would love the grant proposals they receive to include verifiable indicators of achievement and quantitative measures of success. We hear often that funders like visible results, such as the construction of a new irrigation canal, or the reform of a specific law. Sometimes, however, the enormous enterprise of challenging the unbalanced forces of global capitalism is not so tangible or so visible. It is seldom reflected in cyberspace. On a human level, though, such efforts reach deeper into the lives of those who are most affected by the negative impacts of globalization. Positive social change flows from a strengthened sense of dignity and self-respect.

Juany Cázares and Paty Leyva know that will never receive what was withheld from them and their people so dishonorably, but they are proud to have fought as best they could — and that in itself is a great triumph.

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Comité Fronterizo de Obrer@s (CFO)
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Piedras Negras, Coahuila
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