Kimi cuts and runs

Campaign for Labor Rights, 25 May 2000

On May 5, Kimi announced to the Honduran Maquila Association that it would be closing its plant in Honduras due to financial difficulties and intransigence of union leaders. However, US/LEAP research has found that, since soon after signing a collective bargaining agreement with the SITRAKIMIH union, Kimi has been shifting its production to a non-union factory in Guatemala. Closing a unionized factory while continuing to produce at other non-union factories in the region can only be interpreted as a union-busting tactic in violation of internationally recognized worker rights. The evidence that this shift was deliberately planned since the signing of the SITRAKIMIH contract in March 1999 reveals that Kimi was never negotiating in good faith and never had any intention of sourcing from a union factory.

The closing of the factory would surely mean the destruction of the union. Considering that SITRAKIMIH leaders have been strategizing with workers in other factories, including Yoo Yang, to come up with a long-term plan to unionize the area, the loss of this union is indeed a great one.

So far, there is no call for international solidarity actions. However, activists should expect a call for solidarity once a strategy emerges.

BACKGROUND: WINNING A CONTRACT

The Kimi workers first began organizing for a union in 1997 and quickly met the legal requirements that obligate management to negotiate a contract. But the company refused to negotiate, despite repeated rulings from the Honduran Labor Ministry requiring it to do so. When the company finally agreed to negotiate, it did so in bad faith for months.

Finally, with Honduras under threat of U.S. trade sanctions prompted in large part by an initiative from the Union of Needletrades, Industrial and Textile Employees (UNITE), Kimi management and SITRAKIMIH began serious negotiations in the fall of 1998. But Hurricane Mitch flooded the light industrial park, raising concerns that Kimi might shut down. However, Kimi resumed production and resumed contract negotiations in February 1999, leading to a March 19, 1999 agreement.

Kimi's primary customer during the fight for a contract was JC Penney, which appeared to have played a positive role in this dispute, if nothing else by maintaining production during the dispute and in the aftermath of Mitch. Other factors contributing to the union's hard-fought victory included not only the threat of trade sanctions, but also technical and political support from the International Textile, Garment and Leather Workers Federation and the AFL-CIO as well as UNITE, grassroots support in the U.S. and the National Labor Committee, which initiated local independent monitoring of the Kimi situation. [Note: Independent monitoring of codes of conduct in the Central America maquiladora sector by NGOs is controversial and there is only a handful of concrete experiences; the Kimi experience was to provide an important case study for future efforts.]

CONTRACT VICTORY THREATENED BY MOVE FROM CONTINENTAL PARK

The Kimi factory was located in Continental Park in Lima, near San Pedro Sula, Honduras. The Park, which has eight maquiladoras owned and operated by other employers, is owned and managed by one of the most powerful families in Honduras, headed by Jaime Rosenthal.

Less than a month after the union's contract agreement, Mr. Rosenthal told Kimi management that he would not renew the lease of the factory in August 1999, reportedly stating on Honduran TV that he wouldn't allow a union in his park.

After an initial outcry protesting Rosenthal's effort to make his park union-free, Rosenthal said he would allow the factory to stay if the National Labor Committee stated publicly that there were no worker rights violations at the Kimi factory. This transparent effort to recast his opposition to the Kimi factory's presence from anti-union to pro-worker has fooled no one, including the Honduran Maquila Association, which subsequently admitted to workers that Rosenthal indeed wanted Kimi out of the park because it had become unionized.

Nevertheless, the NLC issued the requested declaration and Rosenthal then stated that Kimi could stay—but with unacceptable conditions. First, he limited Kimi's extension to only one year and, second, he said the union's General Manager would not be allowed to enter the park and work!

Meanwhile, Kimi management, unsure of its future at the park and concerned that it could be kicked out at any point given Rosenthal's belligerent attitude, signed a contract at a new location far from the park. The new factory location, which was not negotiated with the union and which was dumped on the workers in a surprise announcement, would have added considerable travel distance for workers, many of whom already have to travel a long way to get to Lima. The union said that most workers would not be able to make the move, thus effectively destroying the union.

Whether or not there was overt collusion between Rosenthal and Kimi is not clear. What was clear was that the ultimate effect of their respective actions could easily be to destroy the union.

The Kimi workers reacted militantly to these developments, totally opposing the move, engaging in a work slowdown, hanging banners throughout the factory and talking with other workers in the park to warn them that if Kimi leaves, they can forget about organizing efforts to improve conditions and wages. After an international campaign organized in coordination with the Kimi workers, Rosenthal agreed to allow the General Manager of the union into the Park but kept his one year limit on Kimi's lease.

WORKERS FACE TEAR GAS IN FIGHT TO KEEP THEIR UNION

Kimi canceled the move to the distant location and asked the union to help management find a new and closer location. Simultaneously, Kimi began discussions with the union regarding numerous breaches of the collective bargaining agreement. This apparent progress was rudely interrupted when management stormed out of a meeting on August 18, 1999 and unilaterally began reversing earlier agreements. The union occupied the factory and went on strike. Management responded by seeking arrest warrants of union leaders.

Kimi workers escalated their campaign by blocking entrances and shutting down the park on August 27-28, 1999. When they returned to the park on Monday, August 30, riot police were lined up in front of the gates to ensure that the park would be open. But in an act of widespread solidarity, most workers refused to enter the park. Then, without provocation, police attacked the workers with tear gas and clubs, sending some of the workers to local hospitals. After an agreement by Kimi to negotiate and a cooling off period of a couple days, all workers returned to the park

The tear-gassing of apparel workers producing goods for the U.S. market sparked new international protests and media attention, and also got the attention of the U.S. and Honduran governments, both of which have been lobbying for new U.S. trade benefits for the Central American maquiladora sector. The mediation of the Honduran Labor Ministry, coupled with heavy pressure from Kimi's chief U.S. customer, JC Penney (which came close to leaving Kimi), persuaded Kimi to drop its criminal charges against the union, accept back all workers and honor the collective bargaining agreement.

KIMI UNION NEGOTIATES MOVE TO NEW FACTORY

In February 2000, Jaime Rosenthal implemented his threat to not renew Kimi's lease in Continental Park because of the presence of the union, and Kimi was forced to move to a new location. In apparent good faith, Kimi management negotiated with SITRAKIMIH for good terms for the move. Kimi agreed to pay transportation costs to the new location, to re-arrange schedules to accommodate the additional travel time and pay the workers for the days the move was taking place. SITRAKIMIH reported satisfaction with the conditions of the move and was gearing up to organize its new co-workers in the new factory, which is almost twice as big as the previous factory.

NORTH-SOUTH LINKS

The Kimi success before the factory closing is a good illustration of the importance of developing close coordination between campaign support activities in the North with solid organizing efforts on the ground by the workers themselves. Without international support and attention, the Kimi organizing efforts would probably have failed near the beginning, just as others had. But without effective organizing efforts on the ground, these struggles would have collapsed even with extensive international support. That this model is being destroyed by the company is alarming and threatens other organizing drives in the area.