Mexico’s Oil Industry Slump Hurts Workers, Spotlights Union Practices

For Arturo Almeidra, the idyllic little town of Paradise is more like purgatory.

The laid-off welder has waited every day for 3 months outside the white stucco headquarters of the Oil Workers Union, hoping that the local union boss would bless him with a job.

But instead of work, Almeidra gets only more competition--from the several hundred other workers being let go by the state oil monopoly, Petroleos Mexicanos (Pemex).

“Pemex can play with our lives because it owns this town,” said Almeidra, who worked for 4 years at Dos Bocas, a nearby port handling 87% of all oil exported from Mexico. Union leaders told him that 60% of 4,000 workers would be laid off by Dec. 31.

If true, he said, “Paradise is lost.”

Throughout Mexico, a country that still depends on “black gold” for nearly a third of government revenues and 40% of its export earnings, oil workers are suffering a wave of dismissals.

Pemex officials and union bosses here say it is caused by a confluence of negative factors: the 6-year decline of the oil industry worldwide, the recent nose-dive in oil prices, and the peso-pinching transition period preceding the change in Mexico’s president.

A Bloated Work Force

Oil analysts say trimming some fat might be good for Pemex, whose bloated, 180,000-strong work force is a bastion of privilege and patronage. But for many angry locals, the crisis itself shines a clear light on the corruption and favoritism within the Oil Workers Union.

On the surface, Paradise still lives up to its name. Lush lowlands and a tropical climate make it an agricultural Eden and a leading national producer of chocolate beans, coconut, and bananas. And while other rural Mexican villages still lack clean water and electricity, this town boasts paved streets, modern buildings and a renovated public plaza.

But as Pemex tightens its belt, residents say corrupt union bosses are betraying their town by selling jobs to workers from outside Tabasco state.

“The real disturbing fact is that the natives of Paradise have always had a hard time getting jobs at Pemex,” said Lencho de la Cruz, a schoolteacher who himself tried and failed a few years ago.

Many local workers complain that their spots were given to privileged workers from union headquarters in Veracruz state. Dissident union leader Cruz Castillo Garcia said outsiders now hold 70% of the jobs in Dos Bocas.

One recently laid-off worker said that of the 72 men in his department, union bosses renewed the contracts of only 13 local residents. “They told me, ‘We’re sorry, there aren’t any jobs,’ ” recalls the young mechanic. “But then I turned the corner and saw them contracting some guy from Veracruz. How do you explain that?”

Denies Favoritism

Sergio Martinez, a union leader here who is from Veracruz, denies charges that he favors out-of-town workers. The simple fact, he said, is that jobs need to be eliminated because of falling oil revenues and Pemex’s exhausted budget.

“At the end of each 6-year political cycle, there are usually cuts in the work force,” said Martinez, who sports tinted glasses and a large, gold-and-diamond ring on his plump little finger. “The budget has been spent and we cannot afford to hire more people.”

Nobody can predict how far the layoffs will go or if the jobs will ever come back. But with a tight 1989 budget expected along with continuing low oil prices, the outlook is bleak for Paradise--especially for the generation of teen-agers loitering in the streets.

Three mornings a week, clusters of job-seeking teen-agers and laid-off veterans form outside the union headquarters, waiting for any kind of job.

Union chiefs not only dole out 95% of the Pemex jobs, but they control the mayor’s office, the business leaders, and the top posts of the ruling Institutional Revolutionary Party (PRI). With their flood of oil money, they have helped build the town.

Charges of Corruption

But the union has been plagued by charges of corruption, especially in the sale of its relatively high-paying jobs.

According to a number of other union members here, a permanent, full-time job runs around $2,000. A 90-day contract can normally be renewed for about $40. The least secure 28-day contract--which is now the most common--costs an extra $5 a month.

“Unfortunately, this kind of thing still happens,” said Juan Fuentes Dominguez, an 8-year veteran who said he still has to negotiate the size of his “donation” every 28 days. “They have no right to demand money, but it’s accepted. We have no choice.”

Two splinter groups, both formed out of the frustration with layoffs and union corruption here, hope to give their 400 members a choice.

Castillo, the leader of the Carlos A. Madrazo Workers Struggle, said his group has been able to slow down the selling of “plazas,” or union jobs. Instead of being forced to pay a bribe, he said, most workers now pay their “dues” in small deductions ($3-$4) from each 15-day paycheck.

Politically, oil workers are also beginning to show that they have a choice. In the Nov. 9 state elections, several dissatisfied oil workers said they voted against the PRI. It won by a landslide anyway, but its ironclad control over the union vote here was loosened.