Workers in 2009: Refusing to Pay the Price of a Crisis Not of Their Own Making

December 30, 2009
The Situation and Struggle of Workers in 2009

The global economic crisis has brought the Philippine economy to the brink of recession. At the onset of the global crisis late last year, the government of Gloria Arroyo initially took the stance that the local economy will be insulated. But despite being in denial and whistling in the dark, the signs are clear of an economy teetering in recession.

There are historic declines in manufacturing and trade. The seasonally adjusted agriculture, fishery and forestry sector contracted by 1.0 percent in the first quarter of 2009 after expanding by 0.9 per cent in the last quarter of 2008. Industry registered its lowest growth for the last twenty years as it sank by 6.6 percent from a 0.1 percent gain in the last quarter.

Even the services sector posted no growth for the first quarter of 2009 compared to 0.2 percent recorded the previous quarter. Investments in fixed capital formation in the first quarter of 2009 plunged to negative 5.7 percent from a growth of 3.0 percent in the same period last year. Investments in durable equipment dropped to negative 17.9 percent from a growth of 9.6 percent a year ago. Total exports dived deeper to negative 18.2 percent from negative 7.7 percent last year. Total imports valued at P530.9 billion pesos at current prices exceeded total exports valued at P528.6 billion pesos, resulting in a trade deficit of P2.3 billion pesos.

The global economic crisis and the slowdown in the local economy had a grave impact on the lives and livelihood of workers in the Philippines. Job losses, mainly in the export sector of the economy, are worsening the unemployment and underemployment rate.

The adult unemployment is more than 20%, the highest since 2005, according to the Social Weather Station survey last June. Some 40,000 workers were laid off since October last year according to the conservative data of the DOLE. At least 120,000 workers affected by layoffs, job-rotation and wage cuts according to the DOLE.

Big multinational firms based in the Philippines have shutdown in the space of one year. The prestigious Intel plant in Cavite closed in December 2008. The German-owned undergarments firms Triumph and Star Performance in Taguig closed this August, laying off 1,600 workers. The Canadian-owned electronics factory Celestica in Cebu also shutdown in August, displacing 900 workers. Meanwhile in September a Taiwanese-owned conglomerate of garments firms called Sports City that produces for world-famous brands Adidas and Reebok retrenched 1,000 workers in Cebu.

Employers are passing the burden of the crisis on the backs of the workers. Capitalists are using the global crisis as an excuse to demolish workers rights and undercut labor standards. Several high profile cases highlight the trend.

Up to 400 retrenched workers of Maitland-Smith Cebu, Inc. have filed cases of illegal retrenchment. Some 1,700 workers produce high-end home furniture and accessories in the Mactan Economic Zone in Lapu-Lapu, Cebu. Its mother company is Maitland-Smith, headquartered in High Point, North Carolina.

Over 200 laid off workers of Lear Automotive have filed cases. Located also in the Mactan Economic Zone, it is an American company that exports electronics parts for cars. The remaining 11,000 workers suffer from reduced workdays.

Some 15 retrenched workers have filed cases against Taiyo Yuden Philippines Inc. It is a Japanese subsidiary that produces spare parts for cellular phones in the Mactan Economic Zone. The remaining 8,000 workers are on reduced workdays.

The workers are refusing to pay the price of a crisis that is not of their own making. Labor unrest is brewing as capitalists attack jobs, wages and working conditions. Although the revival in workers struggle is uneven, the return to militant struggle is taking shape. At the forefront of the new struggles are the workers of Metro Cebu.

The first workers strike against mass layoffs erupted last February in a furniture export firm in Mandaue, an industrial town in Metro Cebu. Hundreds of workers of Giardini del Sole went on strike for two days and paralyzed operations of the company by physically preventing the passage of personnel and goods. Even though illegal, the government vacillated in enforcing the law because of worker militancy and public support.

In April the first ever rally was held inside the Mactan Economic Zone in its decades-long existence. Around 70 workers of Sauna World Inc., a Finnish-owned firm producing sauna and spa heaters for export, marched from their factory to the gates of the export zone.

Last June the first picket line was setup on the gates of the Mactan Economic Zone by the workers of Paul Yu Industrial Corp., one of the biggest factories in the zone that produces lamp shades for export. More than 300 workers went on a month-long work stoppage in protest at the suspension of seven leaders of their workers association. The bitter labor dispute marked the definitive end of the era of the zone as a haven for docile labor where employers can ride roughshod over workers rights and labor standards without provoking a militant response from the workers.

By September of this year the labor unrest had transformed into a revival of unionism at the Mactan Economic Zone. The export zone was so repressive that even the moderate TUCP was complaining against its no-union policy. The workers of Altamode Inc., which makes clothes for the American firm Abercrombie & Fitch, successfully formed a union though they lost the certification elections due to management interference in the workers’ exercise of the freedom to organize and the DOLE’s indifference to the unfair labor practice of the company. Yet unlike previous attempts at failed union building which always ended in the termination of union officers and members, in this case the unionists were able to regain work and thus the struggle continues.