There were several sources of opposition to the government's privatization program,
including bureaucrats from import substitution era,
management of state owned enterprises, and labor unions.
We will look at all three,
but spend the most amount of time on unions,
since privatization really changed the relationship between state and labor.
The secretary of mines, energy, and parastate industry, or SEMIP,
was the ministry in charge of the largest block of industrial public companies.
It was also the biggest bureaucratic component of privatization.
Ministry didn't directly attack privatization because
no one wanted to be on record as opposing the president's plan.
What the bureaucrats did instead is pretend to be on board,
while at the same time, thwarting implementation.
As Judith Teichman writes,
"they claim to want to go slower in order to provide more time
to modernize public enterprises,
to improve their productivity and financial situations,
and to make them profitable, in order to sell them at a good price."
That is, the government was emphasizing short-term budget problems
over long run efficiency.
Bureaucrats argue that they were totally fine with selling the enterprises,
just as long as they were sold at the appropriate price.
The management of state owned enterprises fought privatization more openly,
especially in the cases of mining and steel.
They tried to thwart reform by not providing the information necessary
to effectively sell the firms,
or sometimes by providing misinformation.
That actually worked on a couple of occasions in 1984,
when the government had to back down from
its promise to sell particular enterprises.
I've mentioned before that the type of relationship that
labor unions had with the state worked best when
the government was flush with money, and the economy was growing.
When money got tight, however, the system started to break down on
numerous fronts.
First, there was more division within the labor movement,
which made control through a single nation labor organization
virtually impossible.
Labor overall was unhappy with the government's reforms,
but they were divided about whether to strike or not.
The C.T.M. was in a no-win situation.
If they took the government's side,
they would have no credibility with union workers,
but if they stood by their workers and were unable to change the economic program
then they would lose credibility as well.
In the end, the C.T.M. ended up siding with the government's program,
even after it was obvious that there would be large layoffs involved.
In a previous video on labor unions in Mexico,
we talked about a phenomenon called charros,
and in this context charros means corrupt labor union leaders
put into place by the government.
And outside of Pemex, most charro leaders sided with the government,
thus losing credibility with their workers.
The result was often local uprisings against union leadership,
and in some cases, against the state as well.
For example, when the fundadora monterey was going to be closed,
and lead to 46,000 workers being unemployed,
workers occupied federal offices and participated with their families
in five demonstrations of around 40,000 to 50,000 people.
Both presidents de la Madrid and Salinas took a very hard line
against labor opposition.
From 1985 on, Teichman notes,
the government unilaterally decided labor policy.
There was no longer even a facade of dealing with official labor leaders.
So what kind of tactics did they use to deal with labor opposition?
Well first, both governments used a government-friendly
board of conciliation and arbitration to deal with strikes.
The government argued that they needed, quote,
"the elimination, attenuation, or adaptation
of the norms of collective labor law, with the objective of
increasing investment and international competitiveness."
So the board was able to declare strikes illegal in some cases.
If it was declared illegal, this allowed employers to
discharge workers at will, or call for the armed intervention of
the police or the armed forces if workers continued to strike.
The board could also deem a strike nonexistent,
which meant that workers had to return to work within 48 hours,
or less often, they could declare it legal.
The government often used these tactics before privatizing the firm,
or sometimes just to raise productivity among state-owned enterprises.
In general, the government would work first to convince
recalcitrant union leaders that these reforms were both, quote,
"necessary, and inevitable."
If they failed to convince them,
then they threatened to bankrupt and close down the enterprise.
Let's talk about the example of Pemex during these years,
which is one of the best illustrations of the new relationship
between the [pre?] and labor unions.
The labor union leaders at PEMEX had a lot of power.
Judith Teichman writes that they would march
into top administrator's offices and make demands.
One official noted, quote,
"We had created a monster over which we had lost all control."
To decrease the power of these union leaders,
the [pre?] first stated to eliminate some of their privileges,
including the ability to subcontract at at work to their own firms
without bidding out projects.
In 1989, though, Carlos Salinas went after the top labor leader at Pemex,
a man by the name of Joaquin Hernandez Galicia,
nicknamed Joaquina.
The government was not only worried about labor opposition to their contract,
but also a hard line against privatization.
Joaquina ran the union like his own personal fiefdom.
He had a paramilitary group of 3,000,
and he used violence when leaders failed the co-op workers
with promises of material goods.
Salinas called in the military, probably smart given the paramilitary
organization that was there,
and sent Joaquina and 40 of his top men to jail.
The government replaced Joaquina with one of his long-time enemies,
someone who was also corrupt, but on the other hand,
was willing to toe the government line.
So from 1989 to 1992,
the number of workers at Pemex dropped from 212,000 to 150,000,
a situation which the replacement leader failed to protest.
When his workers did, however, the government used him as a scapegoat
and forced his resignation.
So in sum, this was a period when the relationship between
the state and labor unions was in flux.
Previously, union leaders had worked in tandem with the government,
but economic austerity and privatization meant that things had to change.
Government no longer cared what labor unions thought about
their economic program, and in the case of Salinas,
often wielded the threat of privatization to keep labor in line.
All of the information presented here comes from
Judith Teichman's excellent book, called
Privatization and Political Change in Mexico,
published in 1996.