Mexico Averts Nationwide Oil Strike
Pemex Workers Reach Accord For 7.3 Percent Salary Increase -
Union Had Demanded 15% Increase

Sept. 29, 2002

MEXICO CITY, - Workers at Mexico's nationally owned oil company Pemex accepted a 7.3 percent raise Sunday, averting a threatened strike and bringing an end to a protracted labor conflict.

 With hugs and handshakes, oil union boss Carlos Romero Deschamps and Labor Secretary Carlos Maria Abascal jointly announced the agreement Sunday night following intense weekend negotiations at the Mexico City headquarters of Pemex.
 The increase, which includes a 5.5 percent salary increase and a 1.8 percent increase in benefits, is retroactive to the beginning of August. The union initially demanded a 15 percent raise and rejected the company's original offer of 5.5 percent. About 90,000 of the company's roughly 130,000 workers are members of the union.
 The conflict, and the union leaders' threat to go on strike starting Wednesday, sent ripples of worry through Mexican financial markets and caused concern in the United States. Pemex exports around 1.69 million barrels per day of crude oil, and is among the top three foreign suppliers of crude to the United States.
 The labor dispute became increasingly worrisome as it got ever more entangled in a political scandal affecting Romero Deschamps and the former ruling Institutional Revolutionary Party, or PRI.
 Following up on a pledge to tackle the entrenched corruption of government institutions including Pemex, President Vicente Fox, of the National Action Party, accused Romero Deschamps and several others of diverting $170 million from the oil company to the PRI's failed 2000 presidential election campaign. Fox won that election, ending 71 years of PRI rule.
 Tensions increased when federal prosecutors asked Congress to strip Romero Deschamps, now a PRI lawmaker, and two other union officials of their legislative immunity to face the charges.
 Romero Deschamps accused the government of conducting a political witch-hunt at a time when the union was holding out for a 15 percent wage increase. Government officials and some dissident union workers, however, claimed that he and other union leaders were using strike threats to pressure the government not to pursue the corruption case.
 Fox issued a statement Sunday night congratulating workers and company officials for reaching an agreement and ''for the spirit of responsibility and patriotism that they showed during this difficult conflict.''
 Fox said the agreement would benefit the workers, ''their families, the company and the country.''
 The Pemex case helped push the peso to a near four-year low against the dollar earlier this month. Exchange houses across the country are now selling dollars for well over 10 pesos apiece.

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