The Road to Ensenada
by David Bacon
ENSENADA (3/5/97) - There is no question that the port of Ensenada, the Mexican harbor closest to the U.S., needs to be modernized. When a barge comes in, to be loaded with containers destined for Long Beach, longshoremen mount to the top of each box in a cage lifted by a forklift. They attach by hand the hooks and cables connected to an old dockside crane, and carefully guide each container manually to its assigned location.
Men like Raul Peralta, the union delegate on a recent job, are skillful and experienced workers. It is a testament to their abilities that the work is done safely, and productively enough so that container traffic in the port is increasing.
Yet they face many obstacles. They have to baby old and obsolete equipment, coaxing the work from it. At the multiple-use terminal, just inside the breakwater and across the harbor from shipyards and seafood restaurants, barges, small container ships and cruise vessels all dock together. The city is tightly packed between waters edge and desert mountains, offering little room for expansion. And only two-lane roads, and no railroad, link Ensenada to the industrial plants mushrooming on the border to the north.
When the Mexican government proposed privatizing the country's ports, including Ensenada, it told longshoremen that this was the route to attracting foreign investment. And that investment, it said, was the key to modernization, higher productivity and more employment.
Yet when the port of Ensenada was privatized a year ago, and Estibadores de Ensenada took over cargo operations, more than half the city's longshoremen lost their jobs. Some 70 dockworkers used to work ships calling here. They belonged to a local union whose jurisdiction extended over the entire harbor.
With privatization, however, the government required the creation of a new union, with jurisdiction only over the private concession. Just 30 longshoremen were enrolled as members when the new local was created.
"Most of our older members decided to retire," explains Francisco Pimentel Peralta, the new union's secretary, "because we knew there wasn't enough work for everyone."
The pay system was changed as well. Mexican longshoremen before privatization were paid by the ton of cargo handled. A day's labor loading tuna in Ensenada, for instance, was worth as much as 2-300 pesos (worth $27-40 at the current rate of exchange, and twice that before the 1995 devaluation. At present, 7.75 pesos = $1.) Estibadores de Ensenada, however, pays by the day, at a rate which is the equivalent of 3 times the minimum wage, or about 75 pesos. If a crew is called out, it's guaranteed at least a half day's pay.
Ensenada was hit hard by the U.S. tuna boycott, imposed in 1992 over accusations that dolphin were being caught in the nets. Since the early 1980s, container traffic in Ensenada has consisted mostly of refrigerated boxes of seafood for export. When the boycott hit, the number of TEUs fell from 20,000 a year to less than a thousand.
"There was so little tonnage by the time privatization happened," Pimentel explains, "that we weren't really getting the high wages of the past."
Before privatization, the union was paid an additional 10% of workers wages, distributed to members at the end of the year or in case of emergencies. That arrangement doesn't exist with the new, private employer. In Mexico, however, workers get health benefits through the national social security system, which wasn't affected.
Privatization has come at a great cost for longshoremen in all the Mexican ports.
When an ILWU delegation visited Manzanillo and Lazaro Cardenas three years ago, a crane driver made 3-500 pesos/day. At that time, prior to the peso's devaluation, this was the equivalent of $100-160/day. Those were very good wages in Mexico at the time, but by contrast, a crane driver under the current ILWU contract makes over $25/hour in wages alone.
The new per-day wages in Ensenada are about the same as those in other ports. They conform to an agreement negotiated nationally between the Pacific coast longshore union federation and the government before the privatization process started. Older union members have been encouraged to retire in other ports as well, leaving a younger (and to employers, more productive) workforce.
The Federation of Stevedores, which is affiliated to the CROM labor federation, represents workers in all Pacific coast ports and Progresso in the Yucatan. Atlantic coast dockworkers in Altamira are organized into a cooperative, and in Veracruz, the government disbanded the old longshore union and troops occupied the port in 1991. Since then, three new unions have been organized, which correspond to different companies holding concessions. They are affiliated to the CTM union federation.
Both CROM and the CTM have close relations with the government. Cecilio Lepe Bautista, head of the Pacific coast longshore federation, was formerly mayor of Manzanillo. He is now a deputy in the federal parliament from the ruling Party of the Institutionalized Revolution.
Since privatization, Servicios Portuarios, the old government agency which used to employ all the country's longshoremen, no longer exists. In its place, private contractors now hold concessions for the loading and unloading of cargo in all ports. Formerly public entities, the ports themselves are now operated by bodies which include both government and business representatives.
These changes have seriously undermined the union strength and economic welfare of the country's longshore workers. Both those new, lower conditions and the development plans for the ports themselves are a source of increasing concern to the ILWU, President Brian McWilliams believes. "In the long run, we think that shipping companies want to create an integrated, intermodal system from Alaska to the Guatemala border," he explains, "and in the process pit longshoremen of each country against each other, depriving us of the leverage we need to defend our jobs and economic future."
Mexico's Pacific coast ports have historically been plagued by low capacity, and inadequate transportation routes to the country's interior. Atlantic coast ports, by contrast, especially Veracruz and Altamira, were containerized years ago, and served as the main ocean link to the country's industrial heartland.
All that is due to change.
Sealand, CSX, APL and American Stevedores all have operations now in Veracruz.
In Manzanillo, the largest port on the Pacific coast, a joint venture between the Mexican company Transportacion Maritima Mexicana and American President Lines, won the concession for operating the multiple-use terminal a year and a half ago. Since then, the port has been extensively modernized, and its container capacity increased substantially. Manzanillo already is the shipping point for automobiles manufactured in the Nissan plant at Aguascalientes.
In Lazaro Cardenas, the concession to operate the multiple use terminal was awarded to Sersinsa, a company set up by the owners of the local Sicartsa steel mill, the largest in Latin America. Sicartsa accounts for 70% of the 10 million tons of cargo, mostly steel, moving through the port. Iron ore destined for the mill is also the largest single cargo handled in Manzanillo - about one and one-half million tons per year.
Lazaro Cardenas longshoremen move 40,000 containers a year, just slightly less than Veracruz' 44,000. The road from the city to the interior is only two lanes, however, and rail tunnels can't accommodate double-stacked containers. The government, which plans to privatize all the country's railroads, would like to sell it to private investors, who would then invest in lowering the railbed.
The biggest changes, however, seem to be in store for Ensenada, which has until now been one of the smallest Pacific coast ports. In the days when Tijuana was a wild border town of honky-tonks, Ensenada was a quiet fishing port a hundred miles south. Today, however, Tijuana looks much more like Detroit, and is one of the largest industrial centers in the country. Ensenada is destined to become a much larger port serving the growing needs of the maquiladoras on the border, and eventually a transportation hub for cargo coming to and from the east.
In the new port development plan, Ensenada's cruise terminal is being moved across the bay, away from container operations, and expanded. Behind the breakwater, part of the harbor will be filled, creating enough space for three container ships to dock simultaneously.
Since the 1992 tuna boycott, port authorities began boosting container operations by offering services to maquiladoras to the north as a feeder to the ports of Long Beach and Los Angeles.
Many Tijuana maquiladora factories belong to Korean, Japanese and Taiwanese companies. Rather than putting their containers on trucks for Los Angeles, where they're often delayed in the traffic bottleneck at the border, they began putting them on barges in Ensenada, crossing the U.S./Mexico border at sea with no delays. Once in LA/Long Beach, the containers are put on ocean-going vessels, or rail cars bound for the east.
Port director Pablo Medina hopes that eventually those ocean-going ships will call at Ensenada directly. "We hope to boost our status to become a major port over the next year, increasing capacity annually to 70,000 TEU's."
Port privatization is part of a package of economic reforms which the Mexican government has implemented over the past decade. From the end of the Mexican Revolution in 1920 through the early 1970s, the Mexican government encouraged economic development by Mexican producers, producing products for sale in Mexico. Foreign investment was strictly limited.
But under pressure from the World Bank, the International Monetary Fund and an accumulating foreign debt, the government's policy began to change. National enterprises were sold to private investors, at the cost of thousands of layoffs. U.S. companies were allowed to own land and factories anywhere in Mexico, without having to have Mexican partners. Prices on basic goods were decontrolled, and government subsidies on tortillas and other food and services for workers were cut back or ended altogether.
The North American Free Trade Agreement was part of that process, designed to make it easier than ever for foreign companies to move money and goods across the border. But relying on foreign investment didn't produce a stable economy. Panicked U.S. speculators began selling off Mexican government bonds at the end of 1994, when, instead of producing growth and prosperity, NAFTA led to an armed uprising and more poverty. The government devalued the peso, trying to prevent a flood of money back to the north.
President Clinton found $25 billion to bail out the bankers. In return, Mexican President Ernesto Zedillo announced that privatization, especially of the ports, would be pushed further in order to pay rising debts. The government hoped to get $200 million from selling port concessions, to help pay off a foreign debt of $150 billion. When the process is complete, foreign companies are expected to capture over 70% of the concessions. There is no financing available for Mexican businesses to make bids.
When Mexican President Ernesto Zedillo devalued the peso in January 1995, prices for groceries and basic services started to climb steeply for workers. Milk, for instance, went from 7 pesos to 15 in 1995 alone, and now costs 17.50, or two hours of work on the Ensenada docks. A chicken costs 10 pesos, an hour's work.
Falling wages have meant big profits for companies with operations in Mexico, especially the maquiladoras on the border. Peso devaluation meant they could pay the same wages using only half as many dollars. As a result, there's been a building boom all along the border, where 10 factories, employing an average of 10,000 workers, opened each week during the first three months of 1996. In Tijuana alone, 11 new plants started up just in the month of March. Some 900,000 maquiladora workers now pass through the doors of 2000 border factories every day.
With production growing so rapidly, especially in Tijuana, moving raw materials into the plants and finished products out is becoming more and more of a problem. Tijuana is the only major city in Mexico unconnected to the country's rail network.
That too, is about to change.
According to Ensenada port director Medina, when Ensenada reaches a capacity of 70,000 TEUs per year, the government will open up bidding for the construction of a rail link between the harbor and an existing line which runs along the border.
That line, built ages ago by Southern Pacific and the Spreckels sugar family, runs from the port of San Diego south into Mexico. It crosses back into the U.S. again in Tecate, and winds down through the Carrizo Gorge into the Imperial Valley. It meets the existing trunk line in El Centro and Niland, heading east from there through the southwest to New Orleans.
That line, owned since 1976 by San Diego's Metropolitan Transit Authority, was operated by a contractor, Kyle Properties, until mysterious fires simultaneously burned two tunnels and a trestle bridge in Carrizo Gorge in 1984. Since then, the line has been cut.
Repair work started last year, however, under a new contractor, Rail Tex, operating as the San Diego and Imperial Valley Railway. When it is completed, containers unloaded in San Diego can be put on railroad cars and sent directly east, without having to move north through Los Angeles. In the short term, that will mean increased traffic in the port of San Diego, especially when line improvements are eventually made, with room enough in the tunnels for double-stacked containers.
A new line from Ensenada to Tecate, however, will change the flow of cargo substantially. In the short run, it will allow maquiladora factories in Tijuana, Tecate and Mexicali to move containers directly onto ships in the port of Ensenada, without entering the U.S. That prospect is apparently of special interest to Hyundai Corporation, which owns a big Tijuana plant manufacturing shipping containers. Baja California state authorities have already held discussions with the company about building the rail line, a $300 million project. Hyundai is not only interested in the construction and operation of the line itself, but in heavy industrial development on the land next to it, including a possible auto assembly plant and basic steel mill.
The Tecata/Ensenada railroad project is part of a whole new transportation infrastructure Mexico is developing in cooperation with U.S. and other foreign shippers. Ports are being modernized all along the Pacific Coast, and intermodal links developed with railroads with increased carrying capacity, which will eventually be privatized as well. This transportation grid will serve not only growing industry in Mexico itself, but the U.S. as well, as NAFTA has eliminated much of the bureaucracy at the border.
This will have an impact on the bargaining leverage of U.S. longshore unions. If a labor dispute were to close U.S. Pacific coast ports, for instance, that grid would make shipment through Mexican ports much more feasible than it is today.
That, in turn, makes relationships between Mexican and U.S. longshore workers and their unions much more important than they have ever been before. Only solidarity with Mexican unions, and eventual arrangements for close cooperation, will be able to keep longshoremen from being whipsawed against each other across the border.
With that perspective in mind, a number of longshore delegations have visited Mexican ports in the last five years, including Veracruz and ports along the Pacific. Longshore delegations have shown interest in finding out more as well about the political opposition, which has criticized government's policies of encouraging foreign investment at the cost of declining incomes and working conditions. A recent delegation returned from a trip to Ensenada, to investigate the situation of the longshore union and plans for port expansion. (see sidebar)
These recent effort to develop ties with Mexican unions have roots in past close relations between rank-and-file Pacific coast dockworkers from both countries. During the late 1960s, the ILWU organized a program to train Mexican longshoremen from ports all along the Pacific Coast in modern port operations. In Ensenada, Manzanillo, Salina Cruz and Acapulco, it's not hard to find older dockworkers who remember the experience. "I spent two months working in San Pedro with my father in 1967," remembers Juan Gutierrez Martinez of Salina Cruz. "We learned how the work was done, and came to respect the traditions of the ILWU."
While U.S. immigration law has made work exchanges like this more difficult, ILWU Washington DC legislative representative Lindsey McGlaughlin thinks it might not be impossible to reinstitute them. [quote from Lindsey]
Recent developments in the Mexican labor movement also point to new possibilities for international cooperation. Prices have skyrocketed since NAFTA took effect, while the 94-year old head of the CTM, Fidel Velazquez, has refused to organize any protest. For two years, he's called off the traditional May Day march, fearing it would become a massive demonstration against government austerity policies.
In 1996, however, despite his threats, twenty-two unions organized a massive march in Mexico City, which brought out over half a million workers. They then formed a new organization, the Forum for National Unionism, to begin challenging the government's anti-worker policies, to democratize Mexican unions, and to fight against the declining living standards of Mexican workers. Some unions, like the Mexico City bus drivers' union, have defied government reforms and privatization programs, despite the imprisonment of their officers. An ILWU delegation visited that union's leaders in prison in 1996, and contributed $5000 to their defense.
Jose Delgado, an activist in the Tijuana branch of the opposition Party of the Democratic Revolution (PRD), hopes that "a new kind of labor movement will develop here, which will be more intelligent and move innovative. Already, people are building independent organizations along the border, making allies with neighborhood groups, with farmers and teachers, and with people on the other side [in the U.S.] Neither of our governments has an answer to the demands of our people. We will find the answer for ourselves."
PEACE & JUSTICE
WORKPLACE | STRIKES | PORTRAITS | FARMWORKERS | UNIONS | STUDENTS
Special Project: TRANSNATIONAL WORKING COMMUNITIES
HOME | NEWS | STORIES | PHOTOGRAPHS | LINKS
photographs and stories by David Bacon © 1990-1999
website by DigIt Designs © 1999