SME: "Don't Pay Your Electric Bill!"

Supporters Argue that the Closure of Luz y Fuerza is an Affront to Taxpayers, Electricity Customers, Workers, and Subcontractors

The Mexican Electric Workers Union (SME) is keeping the pressure on the federal government leading up to negotiations between the union and the government over the fate of 18,000 SME members who have still not accepted their severance packages.

The SME is still fighting for a reversal of Calderon's October 10 executive order that shut down the government-owned electric company Luz y Fuerza del Centro, which supplied Mexico City and several central states. The fight to reverse the executive order continues to play out in the courts. This past December, the Mexico City metropolitan region’s First District Court ruled against the SME's petition to reverse the executive order that put 44,000 union members out of a job literally overnight. The SME has appealed the court's decision.

SME’s Secretary of External Relations, Humberto Montes de Oca, informed Narco News that the SME will enter negotiations with the government with an alternative option: that the 18,000 SME members who have still refused their severance packages return to work, that this return to work be under the terms of the collective contract that the SME negotiated with Luz y Fuerza, and that the SME represent those 18,000 former Luz y Fuerza workers when they go back to work. Regarding its demand that its members return to work, the SME continues to fight for the re-opening of Luz y Fuerza. However, union officials have also mentioned to the press that they would accept rehiring with the CFE as long as the CFE complies with the other two demands regarding representation and the SME’s contract.

The federal government put the CFE in charge of Luz y Fuerza's infrastructure and territory, essentially absorbing Luz y Fuerza into the CFE.

The federal government originally estimated that the CFE would rehire about 10,000 laid off Luz y Fuerza workers. It used that empty promise to encourage Luz y Fuerza workers to accept their severance packages: if workers accept their severance package by a certain deadline (a deadline which has been repeatedly pushed back) then the government will do its best to find them new jobs in the CFE, or so the official story goes. In reality, few—if any—Luz y Fuerza workers have been rehired. Given this reality, 18,000 SME workers are holding out for a better deal.

SME workers have also been reluctant to accept (albeit false) promises of rehire with the CFE because CFE workers are represented by the Union of Electrical Workers of the Mexican Republic (SUTERM). The SUTERM´s leadership is notoriously pro-government—a dangerous bias when ¨the boss¨ is the government, as is the case with the CFE workers it represents. The SUTERM has been ruled by the same family for the past 29 years, further calling its degree of democracy and independence into question. The SUTERM´s collective contract with the CFE provides its members with significantly fewer benefits than the SME’s contract with Luz y Fuerza.

Mexican independent labor considers Calderon's decision to shut down Luz y Fuerza to be a direct attack on the SME and independent (not government-controlled) unionism as a whole.

The SME's proposed alternative to the re-opening of Luz y Fuerza would leave the SME—one of Mexico’s few independent (not government-controlled) unions—and its collective contract intact.

The SME's strategy going into negotiations is to focus on grassroots political pressure, namely through mobilizatio ns. “We are combining mobilization with negotiation,” Montes de Oca told Narco News. “Mobilizations strengthen the union’s position at the negotiating table.” The union has also initiated a consumer strike by encouraging electric customers to refuse to pay their bills.

Consumer Strike

At a recent assembly that officially kicked off the consumer strike, La Jornada columnist Pedro Miguel argued that Calderon’s decision to shut down Luz y Fuerza, a government-owned company, is an affront to taxpayers.

At that same assembly, participants agreed to a proposal from Congressman José Antonio Almazán González, a retired electrician and tireless defender of what’s left of Mexico’s nationalized energy sector, that the consumer strike take up three demands that reflect the SME's demands at the bargaining table:

1. That SME members who haven’t accepted their severance packages go back to work
2. That their collective contract that they had with Luz y Fuerza be respected
3. That the executive order that shut down Luz y Fuerza be reversed

The "Electric Bill Strike Committee," which coordinates the consumer strike, argues that Luz y Fuerza customers should refuse to pay their electric bills (which are now issued by the CFE) for the following reasons:

• Consumers in Mexico City and surrounding states signed a service contract with Luz y Fuerza, not the CFE, and therefore the CFE has no legal right to charge Luz y Fuerza customers.
• Thus far, it appears as though the CFE does not have the capacity to read Luz y Fuerza customers' electric meters. Therefore, the CFE electric bills that Luz y Fuerza customers receive are, according to the SME, estimated and not based on actual meter readings. Given the fact that the CFE also lacks the capacity to keep Luz y Fuerza's grid in working order, blackouts constantly plague the region. This means that many Luz y Fuerza customers are consuming less electricity than normal, because the service is simply unavailable. For example, in the week prior to the declaration of a consumer strike, this reporter experienced at least three blackouts, each one lasting hours--one lasted at least eight hours. The SME reports that some areas have gone days without electricity. This reduced consumption is not reflected in the CFE's estimated bills; on the contrary:
• According to the SME, consumers report receiving CFE bills that are double or triple their normal Luz y Fuerza bills, and that higher rate is being charged monthly, not bi-monthly as was the case with Luz y Fuerza. In other words, consumers are paying twice the amount of money in half the amount of time.
• One reason the CFE's electric bills are higher is because when Calderon did away with Luz y Fuerza, he also did away with the subsidy it received from the federal government in order to make electricity more affordable.

The SME assures striking consumers that the CFE has no legal power to shut off their electricity if they do not pay their bills. In order to provide striking customers with legal protection, as well as to officially register consumer unrest with the government, the Lawyers Front in Defense of Consumers of Public Services is assisting customers in filing legal complaints against the CFE and the federal government for unlawful charges. The Electric Bill Strike Committee has set up tables in public plazas and shopping malls to help customers file their legal complaints.

SME's Counter Offensive

The SME has launched a counteroffensive against the Calderon regime. The counteroffensive consists of defending the union from the federal government's smear campaign, vocalizing and publicizing popular discontent with the Calderon administration, and mobilizing workers and allies in support of the laid off Luz y Fuerza employees.

The Calderon administration's official reason for closing Luz y Fuerza was because it was "inefficient"--it operated year after year with a deficit that the government made up for with public funds. The Calderon administration has justified the middle-of-the-night federal police operation that threw 44,000 unionized electrical workers out onto the street (in some cases, literally) by blaming Luz y Fuerza's insolvency on the SME.

The Mexican filmmaking team Canal Seis de Julio refutes these claims in a damning new documentary entitled "Let There Be Light" ("Que Se Haga la Luz"). SME members now can be found on the streets and at public events distributing burned copies of the DVD in exchange for spare change--they ask for enough money to keep burning more copies.

"Let There Be Light" points out that a union, by definition, works to improve its members' wages, benefits, and working conditions. A union does not run the company. In Luz y Fuerza's case, it was government-appointed administrators who ran Luz y Fuerza and made key policy decisions. Moreover, federal law--not the union--dictates how electricity is generated and sold.

"Let There Be Light" notes that the federal government and its appointed administrators set up Luz y Fuerza to lose money. Mexico's Constitution mandates that electric companies be government-owned. Undeterred, the federal government found an ingenious way to circumvent the Constitution: it provided almost no funding for the construction of government-owned generating plants and forced the government-owned electric companies to purchase the majority of their electricity from foreign companies at a rate of over 90 Mexican cents per kilowatt-hour, while government-owned plants can produce electricity at a cost of 60 Mexican cents per kilowatt-hour. Mexico's version of the Internal Revenue Service (known as the Hacienda), which sets electric rates, then mandated that Luz y Fuerza sell that same expensive, privately produced electricity to industrial consumers at a preferential rate--a rate that was lower than the price Luz y Fuerza originally paid for it. In other words, the government intentionally created Luz y Fuerza's deficit. Specifically, Calderon created Luz y Fuerza's deficit: "Let There Be Light" notes that it was Calderon that approved this backhanded and--as he calls it--"inefficient" scheme when he was the Secretary of Energy.

Not only did Calderon set up a system in which Luz y Fuerza operated at a loss, his administration turned its back a potentially lucrative proposal from Luz y Fuerza and the SME to exploit Luz y Fuerza's fiber optic network. As Narco News reported this past October, Luz y Fuerza and the SME solicited the government's permission to provide the triple play service (television, internet, and telephone) over its fiber optic network. The Calderon administration responded by shutting down Luz y Fuerza and busting the SME, which opened the door to a Spanish company and Calderon's fellow party members to exploit Luz y Fuerza's taxpayer-funded fiber optic network for private profits.

To throw salt in the wound, Luz y Fuerza's government-appointed administrators further exacerbated the electric company's publicly funded deficit with exorbitant golden parachutes for its retired executives and free electricity for major corporations and government agencies. Amongst the beneficiaries of free electricity are: BBVA (a bank), Herdez (food products), Soriana (department store), Comercial Mexicana (a grocery store), and Reforma (a newspaper); dozens of government agencies such as the Federal Attorney General's Office and the Supreme Court; the president's residence, Los Pinos; and the United States Embassy.

Making Noise

Calderon should have known that the SME, one of Mexico's oldest, most respected, and most militant unions, wouldn't go down without a fight. Perhaps Calderon figured he had the upper hand. The corporate media unquestioningly parrots whatever his government says. He controls the police and the military--which, thanks to US funding under the Merida Initiative, have new equipment and training at their disposal. But Calderon seems to have underestimated the determination of 44,000 suddenly unemployed union members who have nothing left to lose.

The SME appears to be looking to expand its support base by opening its campaign to non-unionists. It hopes to achieve this goal by broadening its rhetoric and criticisms of the Calderon administration to include issues that affect unionists and non-unionists alike. Additionally, it is opening up a space within its campaign against Calderon's union busting for non-unionists' active participation.

Specifically, the SME has expanded its criticism of Calderon beyond his arguably illegal anti-worker behavior. Many SME members and supporters have publicly criticized Mexican lawmakers’ notoriously high paychecks and bonuses—a sticking point in a country where half the population survives off about $150 USD per month.

The SME's Secretary General Martin Esparza has publicly called upon Mexican social organizations to organize a recall of President Calderon. The SME is an active participant in the Campaign to Recall Calderon, which is largely driven by members of the center-left Democratic Revolution Party (PRD).

The SME is also pulling out more evidence to support its argument that Calderon's attack on the SME is an attack on organized labor. It points to a January 17 article in La Jornada that exposes the working conditions of the electricians who have been contracted to replace SME workers in three Mexico City delegations (similar to New York's boroughs). According to the article, the CFE (which readers will recall is now in charge of Luz y Fuerza's grid) has contracted eight private companies to subcontract 200 people who work under the worst imaginable conditions. The majority of the workers sleep in cots in a 10-meter by 20-meter tent. La Jornada published a picture of the tent: it is reminiscent of an emergency storm shelter. Despite a cold snap that caused Mexico City temperatures to plunge recently, the 200 workers share six showers that only produce cold water. They also share twelve portable latrines.

The private companies brought the subcontractors in from other parts of the country. The men rarely return home see their families, if ever. According to La Jornada, bus tickets home would cost the workers anywhere from a third to 70% of their weekly wages.

The SME's Secretary of External Relations, Humberto Montes de Oca, says the subcontractors are untrained and working under dangerous conditions. He says that many of them have been injured on the job: he cited one man who was reportedly electrocuted and another who fell from a tower. Montes de Oca says that there have been "multiple" deaths. "This is how the government wants to see all of us workers," he told a crowd at a recent assembly. "With miserable paychecks, in a tragic situation, without benefits, without a collective contract, and without a union."

The SME is looking to canalize the participation of non-unionists in its struggle. In addition to holding neighborhood assemblies regarding the crisis, the consumer strike is designed to get people who aren't already SME members involved in the campaign.

The SME is also benefiting from mutual aid. In recent years, the SME has supported other social movements and organizations—even those that aren’t directly related to labor. It mobilized to support the People’s Front in Defense of the Land (FPDT) in Atenco when the government laid siege to that peasant organization and put its leader, Ignacio del Valle, behind bars for life. The SME rushed to Oaxacan teachers´ aid in 2006 when the government brutally repressed their strike. The SME also supported National Autonomous University of Mexico (UNAM) students during their 1999-2000 strike against tuition increases. Now students, teachers, and peasants are mobilizing to defend the SME.

The SME is also making its presence known outside of its own events. In addition to its participation in the campaign to recall Calderon, it will send a large contingent to the January 29 "mega-march" in Mexico City against the Calderon administration's proposed tax increases on basic goods. The National Peasant Confederation (CNC), which is affiliated with the Institutional Revolution Party (PRI), is organizing the march. The mega-march could have originally been a stunt designed by the PRI, which ruled Mexico under a 70-year one-party dictatorship, but the SME's participation might be a sign that the march is taking on a life of its own.

Last week, Montes de Oca was in California rallying support for the SME from US labor unions such as the AFL-CIO.

Photo by Santiago Navarro.

Originally published in Narco News on January 26, 2010.