A Tale of Free Trade and Labor and Money and Power in Mexico By JOHN M. McCLINTOCK

THE BALTIMORE SUN

Matamoros, Mexico. -- The 286-pound Mexican Big Daddy spits on the floor, oblivious to the little girls who snatch lollipops from a plastic bucket underneath his desk.

Agapito Gonzalez is both magnanimous and callously rude, a big-bellied throwback to Faulkner and Tennessee Williams.

At 77, Agapito sits at the pinnacle of power, defying his president and America's major corporations.

He is, in the words of an American executive, "The biggest son of a bitch I ever met."

And yet, within a few days, he will be broken across the knee of forces far larger than himself, with names like General Motors and Zenith.

His is the story of big power in Mexico, of big money and the "modernization" of the Mexican labor movement.

This is the story of Agapito Gonzalez, a union leader who had won some of the highest wages in Mexico and who was opposed to a free trade agreement with the U.S. and Canada.

Last week President Bush and Mexican President Carlos Salinas de Gortari met in San Antonio to praise the free trade agreement, saying it would benefit Mexican workers.

There was not a peep out of Agapito Gonzalez.

/# He was a prisoner of the state.

"Atomic Ant"

In Mexico City, 700 miles from this sleazy border town, sits a

diminutive man so energetic that he is called the "Atomic Ant."

The bald, 43-year man has a different perspective than Agapito Gonzalez, who quit the third grade to work in the cotton mills in Matamoros.

When Agapito was doing labor organizing in American businesses in Matamoros, "the Atomic Ant" was filling out an application for Harvard.

The world of "the Atomic Ant" was that of the Mexican political elite, of good schools that led to powerful jobs controlled by the Institutional Revolutionary Party (PRI).

The one thing Agapito and the "Atomic Ant" had in common was that they were part of the PRI's ruling coalition of labor, farm workers and government employees.

The "Atomic Ant" wanted to modernize Mexico and open its borders to investors through a free trade agreement.

But Agapito was opposed, fearing a free trade agreement would lead to the domination of Mexico by American companies and the loss of union gains embodied in the Mexican Constitution and its labor laws.

Above all else, he believed the agreement would lead to the exploitation of Mexican workers and to the gutting of tough union contracts such as his own.

By the time of his downfall, Agapito was the most powerful man in Matamoros, the head of a union that represented 35,000 workers in 77 companies, most of them American.

Agapito was proud of his accomplishments. He had the won a 40-hour work week and the highest industrial wages on the border, if not the country.

But to the employers, Agapito's power was so great that they felt he infringed on their rights as managers and that he was a pompous man who wouldn't listen to reason.

Specifically, they wanted to submit contract disputes to binding arbitration, rather than be forced to endure Agapito's perennial strikes.

Under the modern manufacturing system the plants kept small inventories and thus could not endure work stoppages of any length. Every year there were Agapito's quick strikes followed by companies settling for 20 to 25 percent increases.

And so, beginning in 1988, they started a campaign to get rid of Agapito, eventually going directly to the "Atomic Ant" in Mexico City.

The "Atomic Ant" was none other than the president of Mexico, Carlos Salinas de Gortari.

Fighting the Unions

When Mr. Salinas took office in 1989, Mexico was being strangled by unions that had become too powerful and in many cases too corrupt.

The powerful oil workers' union had made impossible the running of Pemex, the state petroleum company. Workers inherited "positions" that allowed them to receive salaries, even though they never worked a day for the company.

Longshore unions had made a nightmare of the ports, requiring kickbacks that ran into the millions of dollars.

If Mexico was to become a modern country suitable for investors, it could no longer countenance union featherbedding and corruption.

Within three years of taking office, Mr. Salinas had tamed or broken the unions representing the oil workers, teachers, longshoremen, brewerymen and autoworkers.

The administration also made it clear it would not tolerate strikes that hindered labor modernization.

A 1990 strike at the Ford Motor Company's plant near Mexico City was broken by goons from the Confederation of Mexican Labor (CTM). The confederation is Mexico's equivalent of the AFL-CIO except that it is part of the PRI's ruling coalition that has kept it in power for 63 years.

Another strike at a Mexico City brewery was similarly broken -- this time with the aid of the police.

Maquiladoras

The situation on the U.S. border was different.

The border industries grew out of the government's need to find jobs for a million Mexicans who illegally sought work in the U.S. every year.

And so in 1965, it created the "maquiladora" system which allowed foreign companies to establish factories that manufactured products for export from imported parts. The companies were taxed only on the value added in Mexico before being shipped back to the country of origin.

The system was a raging success. By 1991, the maquiladoras had become a major segment of the economy. Its 1,880 plants employed over 450,000 people and contributed about $1.5 billion to the economy.

One of the reasons for the success was the near total absence of organized labor.

A 1990 study by the U.S. Department of Labor suggested that the employers' anti-union attitude and their use of company unions helped contribute to the low rate of organization.

The same report cited allegations that the government and Confederation of Mexican Workers had agreed to avoid organizing drives in the maquiladora plants.

If such a tacit agreement existed, the confederation's secretary general in Matamoros never got the word.

( He was Agapito Gonzalez.

"A Different Attitude"

In the fall of 1990, things had become intolerable for the Matamoros Association of Maquiladoras.

The association included some of the biggest names in American business: General Motors, Zenith, AT&T;, ITT and Trico. (General Motors is the largest foreign employer in Mexico with more than 50,000 workers.)

The companies provided Agapito's union members the highest wage and fringe benefits on the border, about $3.25 an hour.

And Matamoros was beginning to lose plants to lower paying areas of the country. In nearby Reynosa, they were paying $1.80 an hour.

Paul Blanco, the association's former president, said in December: "We want someone [in the union] with a different attitude. Someone who is more forward looking."

Just days after association representatives met with President Salinas in September 1990, Agapito Gonzalez was stripped of his post as secretary general of the Confederation of Mexican Workers in Matamoros.

But Agapito still was president of the maquiladora union, the position that counted the most.

"Those guys [in the association] tried to get me but I am still here," he boasted in December.

Agapito was not getting the message.

When contract talks reached an impasse on Jan. 27, Agapito began a series of brief strikes at eight plants, including two General Motors factories.

For the maquiladora association, Agapito needed to be cut down to size, said one of its members.

Two days later, President Salinas had lunch with a group of 200 businessmen, including senior executives of General Motors and Zenith. Once again they told the chief executive that Agapito was being unreasonable.

Meanwhile, the association had published ads in local newspapers and a Mexico City daily asking for presidential intervention.

Word was also spread that the U.S. consul in Matamoros was worried that the strikes might hurt the chances of the free trade agreement.

The boom fell New Year's Eve.

Thirty plainclothes cops surrounded Agapito's car as he was traveling to a party for his daughter. Without showing him a warrant they hustled him off to nearby Reynosa, then to Monterrey and finally by air to Mexico City.

Agapito was charged with evading his income taxes in 1988. But the judge threw the case out of court, noting that the union leader had already paid the taxes.

The government then found a second judge who ordered him held on another tax charge. (Mexican judges essentially serve at the whim of the president).

Today Agapito Gonzalez is under police guard at a Mexico City hospital. (He has had several heart bypass operations). And his son is trying to find "an honest judge" who will grant the labor leader an injunction.

The union has appealed his arrest to Mexico's National Human Rights Commission, and the AFL-CIO executive council says the case "shows the attitude of U.S. employers toward Mexican workers who seek to improve their standard of living."

As for President Salinas, a spokesman denied the arrest had anything to do with pressure from the maquiladora association and big American corporations.

"It's a simple tax case," said Leonardo Ffrench, the foreign press spokesman. "This is a brouhaha over nothing."

A spokesman for the maquiladora association called the arrest: "a bizarre coincidence."

With Agapito languishing under arrest, the union had already begun to lose ground in the contracts negotiated after his departure.

"You might say Agapito has got the message," said his son, Gonzalo Gonzalez.

John McClintock is The Baltimore Sun's Mexico City correspondent.

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