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Saturday, October 1, 2022
MEXICO CITY, Mar 4 2009 - Mario Verdugo heard the bad news after finishing an exhausting 12-hour shift making Jettas at the sprawling Volkswagen plant in central Mexico.
Due to declining global demand for cars, his foreman told him, his job no longer existed.
“It was like a slap in the face with a machete,” said Verdugo, 40, waiting outside the factory gates in the scorching heat for a severance-pay check.
“There is no unemployment benefit for me here in Mexico, so how am I going to feed my wife and three children?”
Auto industry suffers
Verdugo is one of half-a-million Mexicans who have lost jobs since November as the nation’s auto industry and other manufacturing sectors take a nosedive amid the tumbling global economy.
The vast majority of these exports – from cars to cameras – travel across the nation’s 2,000-mile northern border to the biggest economy and market in the world: the United States.
But as the credit crunch becomes a global recession, Mexicans are remembering the warnings many raised about over-dependence on the seemingly invincible economy of their northern neighbour.
When the United States gets the flu, Mexico gets pneumonia, they said.
Recent statistics indicate that the Mexican economy is indeed suffering. Mexico’s car production for January was down by 51 percent compared to the same month in 2008, mostly due to a sharp drop in exports.
“We are experiencing the worst year in the last five decades,” Eduardo Solis, president of the Mexican Auto Industry Association, told Al Jazeera. “While our principal competitors have created strategies to kickstart their internal markets, Mexico is paralysed.”
In Puebla, home to the biggest Volkswagen plant in the continent, the effects are hitting residents hard.
The factory and its part providers laid off 1,400 workers and gave many employees forced holidays – on half-pay.
Trade unions complain about the tactic – known in German as a kurzarbeit – but say they are powerless to fight it.
“We have no room to maneuver,” said Gilberto Martinez, a member of the Authentic Worker’s Front, a union federation. “Some leaders say we should go on strike. But that would be doing a favour to the companies, not the workers. All we can do is try and keep our jobs.”
The slump has also walloped many communities in northern Mexico, such as “Mexico’s Detroit” – an area with Ford, General Motors and Chrysler factories over the border from Texas.
American autoworkers had complained bitterly when their jobs went south of the Rio Grande in the 1990s. However, many of the Mexicans who took those jobs are now finding themselves unemployed.
Things are even worse to the west in Ciudad Juarez, a border city with thousands of assembly plants – known as maquilas – in which multinational corporations churn out duty-free goods for American shops.
While many of the jobs pay as little as six dollars a day, they have been plentiful and have provided a steady source of income for millions of Mexicans.
But amid massive layoffs, a TV newscast showed hundreds queuing up at dawn for a single job opening on a production line.
Officially, unemployment in Mexico stands at 4.3 percent, or some 1.7 million of its 40 million-strong workforce.
However, many say the real number is much higher, as the government counts anyone working one hour a week as employed, and fails to take into account millions scraping by selling goods on street corners for want of better work.
Furthermore, every year some 400,000 young workers have been heading north to the U.S. to sweat in fields, restaurants and construction sites and wire the dollars home to their loved ones.
But that option too is drying up, with fewer jobs and more deportations north of the border.
Remittances sent from the U.S. to Mexico fell by almost one billion dollars in 2008, the first drop since the Central Bank started keeping records.
The most dire prediction of economic instability came from Mexican billionaire Carlos Slim, the telecoms tycoon of Lebanese descent who is the second richest man on the planet after Warren Buffet.
Last week, he warned that “unemployment will rise as we have never seen in our personal lives [and] companies small, medium and large will go bankrupt.”
Mexican President Felipe Calderon rebuked the mogul as being “alarmist.”
Many worry that the pressures of unemployment will also push Mexico’s degenerating security situation further over the edge.
Amid a widespread breakdown in law and order, there were more than 5,000 drug-related killings and thousands of kidnappings for ransom last year.
Felipe López, a migrant worker and activist who recently returned from the U.S. due to lack of work, predicted that many of the newly jobless will turn to crime.
“There are some desperate people who will not sit back and watch their families go hungry,” López said. “If they cannot get money by working then they will take it by any means necessary.”
* Published under an agreement with Al Jazeera.
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