Abstract
The 1990s witnessed the further politicization of the relationship between the state government and local business in Puebla. As this chapter shows, initial attempts by Governor Manuel Bartlett Díaz (1993–1999) to win over local business leaders through various concessions failed to avoid government-business conflict during the 1995 mid-term elections. The opposition PAN, supported by local business chambers, defeated the PRI in the race for mayor of Puebla for the first time in history. After the election, Bartlett curtailed relations with organized business leaders, undermining cooperation on economic policies. Instead, the government supported the efforts of the auto sector to transform itself into a global economic powerhouse, helping Puebla recover from the 1995 crisis but at the cost of growing economic concentration. As a result, the differences between local firms and the automotive enclave in Puebla were more pronounced than ever as NAFTA, Mexico's historic free trade agreement with the United States and Canada, took effect.
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Notes
- 1.
Bartlett had been Secretary of Government, the second most-powerful position in Mexican politics, from 1982 to 1988. In this capacity, he was in charge of the PRI’s electoral operations during the disputed 1988 presidential elections. In reward for his dutiful service, Salinas named Bartlett , who had competed with him for the PRI’s nomination in 1988, to another cabinet post.
- 2.
As Secretary of Government, Bartlett was at the front lines of the PRI’s battle against burgeoning opposition power at the local and national level. He had overseen the post-electoral conflict in Puebla in 1983, when the textile industrialist Ricardo Villa Escalera, by most accounts, had victory stolen from him by electoral fraud (see Chapter 5). Villa Escalera would again be the PAN’s gubernatorial candidate in 1992, and the businessman Jorge Ocejo Moreno, a former president of Coparmex and outspoken critic of the PRI, ran for the municipal presidency on the PAN’s ticket.
- 3.
This result again reflected the enduring strength of the PRI electoral machine in Puebla’s vast hinterlands.
- 4.
Nexos 21 November 1992, “También en Puebla, resistencia civil.”
- 5.
Examples include Alejandro Couttolenc Villar, a former textile chamber president who served on the Puebla city council, and Roberto Herrerías Morales, who was put in charge of a program to ensure business compliance with sanitation standards in the city of Puebla (El Sol de Puebla 2 March 1993, “Agenda empresarial”).
- 6.
One upshot of this strategy was that the government essentially pre-determined who would receive the contract for the periférico. In the words of a former state Finance Secretary official, “we looked for a legal way to give [the consortium] the construction of the periférico” (Interview, 3 March 2016).
- 7.
A senior official involved in the project’s administration called the scheme “disastrous” from a practical point of view and recalled that the director of the consortium had to be “a magician” to get anything done. The consortium dissolved after several years (Interview with state Finance Secretary official, 3 March 2016).
- 8.
The new arrangement boosted local firms’ ability to compete for government contracts according to government and business leaders. Interview with Secretary of Finance official, 3 March 2016, and CCE official, 20 October 2015.
- 9.
As discussed in Chapter 5, the Junta received money from the state government to carry out public works in the city of Puebla. El Sol de Puebla 3 March 1993, “Anexarán a la Junta de Mejoras actividades de Gobierno: MBD.”
- 10.
Interview with journalist Socorro López Espinosa, 24 June 2016.
- 11.
Interview with CCE official, 29 February 2016.
- 12.
Interview with CCE official, 29 February 2016.
- 13.
Interview with CCE official, 29 February 2016.
- 14.
Lack of adequate industrial infrastructure had forced many firms to invest in their own water treatment facilities (El Sol de Puebla 5 March 1993, “Deplorable panorama presenta el Parque Industrial Texmelucan”).
- 15.
The director of the ITP reported in 1994 the institution was rejecting 60 percent of applicants due to lack of human and physical resources (El Sol de Puebla 17 August 1994, “Rechazados más del 60% de aspirantes al ITP”).
- 16.
El Sol de Puebla 6 March 1993, “Apoyo extranjero a la reactivación industrial,” and 13 March 1993, “Se pronunció por la ley laboral actualizada y una ley fiscal simple.” Interviews with CCE officials 20 November 2015 and 8 March 2016.
- 17.
A company official was blunt in explaining why: “We are the largest firm here, by far, and we do not need the chamber in order to be heard by the state government” (Interview, 26 January 2016).
- 18.
Interview with CCE official, 8 March 2016.
- 19.
Based on INEGI 1994 Censo Económico.
- 20.
According to a senior official in the Bartlett government , the administration maintained “a very close relationship with the management of Volkswagen , to understand their needs” in planning these projects. The firm was “completely taken into account” in Angelópolis (Interview, 12 February 2016). Juárez (2005) reports that two bridges across the Mexico-Puebla highway were built by the government at the explicit request of the president of VW.
- 21.
Interview with CCE leader, 20 November 2015.
- 22.
This is a reference to the aforementioned strategy developed with McKinsey. Interview with CCE official, 8 March 2016, and top government official, 12 February 2016.
- 23.
Construction of the park had begun in 1992 but had barely advanced before Bartlett took office in February 1993.
- 24.
- 25.
By 1995, 11 of 20 major suppliers identified by Schreiber (1998) sold 100 percent of their output to VW, compared with the 1983–1990 period, when no supplier depended entirely on the firm.
- 26.
This conclusion was another result of the diagnostics of Puebla’s economy carried out at the beginning of the administration. According to a leader of the textile chamber, the sector was barely consulted during these studies (Interview, 2 December 2015).
- 27.
Maquila textile production in Puebla increased more than sevenfold in real terms between 1991 and 1995 (INEGI 1997). In some cases, incumbent firms converted into maquilas to take advantage of cheap imported inputs. US and (later) Asian firms also set up textile maquilas in Puebla in the years after NAFTA.
- 28.
El Sol de Puebla 12 August 1994, “Disminuyen las fábricas textiles que trabajan solo 3 días semanales.”
- 29.
Actas del Consejo Directivo de la Cámara de la Industria Textil de Puebla y Tlaxcala, 15 January 1994. CITPT Archives.
- 30.
El Sol de Puebla 31 August 1994, “Necesarios corredores acordes a las necesidades de la industria textil.”
- 31.
The pessimism with which the industry viewed the NAFTA agreement is reflected in comments by CITPT President Jorge González Cobián that the survival and potential recovery of the sector will not be achieved in the context of NAFTA but rather through domestic support for the industry and exporting to South America (El Sol de Puebla 2 November 1993, “Países del cono sur pueden ser la opción para el repunte de la industria textile de Puebla y Tlaxcala: J. González C”).
- 32.
Actas, Asociación de Empresarios Textiles de Puebla y Tlaxcala, 24 January 1994.
- 33.
Ibid.
- 34.
El Sol de Puebla 3 March 1993, “Textileras no cumplen con la mutualidad,” and El Sol de Puebla 22 March 1993, “Languidece la industria textil en Puebla, ante la negativa de empresarios para modernizarse.”
- 35.
Interview, 8 March 2016.
- 36.
Interview with state Finance Secretary official, 3 March 2016.
- 37.
Interview, 8 March 2016.
- 38.
Espina owns a construction business and is associated with the traditional group of conservative and PAN-sympathizing business leaders in Puebla.
- 39.
Interview, 26 August 2016.
- 40.
The Executive Committee included various state government officials, the presidents of the 14 municipalities whose territories were included in the Angelópolis portfolio, the president of the CCE, and the leaders of two union confederations. The Consultative Committee included a wider array of political and civil society leaders, including six business association presidents (Gobierno de Puebla 1999a).
- 41.
Bartlett was able to do so because the Salinas administration created a new position, the Commissioner for the Evaluation and Promotion of Development Projects in the Central Zone, which Bartlett occupied soon after leaving the Secretary of Public Education (SEP) in January 1992. This post allowed Bartlett to unofficially begin campaigning in Puebla before any candidacies were announced (Nexos 1 September 1992, “Final en Puebla”).
- 42.
The concerns of the business sector proved to be reasonable. Several of the 17 Angelópolis projects never saw the light of day, and the periférico remained unfinished at the end of Bartlett’s term.
- 43.
A CCE official acknowledged that such associations among firms did not come naturally to local businesses in Puebla (Interview, 29 February 2016).
- 44.
El Sol de Puebla 12 August 1994, “Industriales demandan labor conjunta con gobierno para la creación de más empleo,” and El Sol de Puebla 31 August 1994, “Necesarios corredores acordes a las necesidades de la industria textil.”
- 45.
Hinojosa owned an electronics company and is the cousin of former President Felipe Calderón, who at the time was national leader of the PAN.
- 46.
Interview with Socorro López, 13 February 2017.
- 47.
El Sol de Puebla 12 September 1995, “Todos son culpables de que no se garanticen unas elecciones transparentes y democráticas.”
- 48.
El Sol de Puebla 8 September 1995, “No soy un gobernador silensioso, vergonzante, ni clandestino: MBD.” Concertacesiones—a portmanteau of the Spanish words for agreement and concession—refer to deals between the PRI and opposition parties (usually the PAN) to allow opposition victories in some local jurisdictions in return for political support or accepting continued PRI control elsewhere. Such pacts were common during the 1980s and 1990s.
- 49.
Brito would become the state’s tourism secretary in the second half of the sexenio (El Sol de Puebla 4 November 1995, “Generando más Empresas, se acabará con el ocio que está minando a la juventud: Brito”).
- 50.
El Sol de Puebla 11 August 1994, “Mostraron apatía los empresarios, para participar como observadores en las elecciones: M. Urquiaga.”
- 51.
El Sol de Puebla 5 November 1995.
- 52.
See E-consulta 13 November 1995, “Manuel Bartlett Díaz…Voto de Castigo” http://anuario.e-consulta.com/index.php/1995/item/manuel-bartlett-diazvoto-de-castigo?category_id=105.
- 53.
E-consulta 29 April 1996, “José Manuel Rodoreda…la ruptura de la concordia,” http://anuario.e-consulta.com/index.php/1996/item/jose-manuel-rodoredala-ruptura-de-la-concordia.
- 54.
Bartlett also retaliated against the new mayor of Puebla, who accused the governor of depriving the municipality of financing. These claims escalated after the PRI-controlled state congress passed the so-called Ley Bartlett in 1997, which changed the distribution of state revenue transfers to favor Puebla’s rural municipalities, where the PRI was dominant (see Ward and Rodríguez 1999).
- 55.
Interview with CCE officials, 29 February 2016 and 8 March 2016.
- 56.
El Sol de Puebla 16 November 1995, “Agenda empresarial.”
- 57.
El Sol de Puebla 5 October 1996, “Tranquilas relaciones de la IP y gobierno estatal: empresarios.”
- 58.
The clear exception, as discussed above, was the industrial infrastructure created for VW suppliers. In addition to the FINSA park, the government facilitated the construction of the Bralemex industrial park , also for the auto sector, in the second half of the administration (Gobierno de Puebla 1999b).
- 59.
Interview with CCE official, 29 February 2016.
- 60.
This concentration presents a stark contrast with the case of Querétaro, where the top three industries by employment in the state’s industrial parks each accounted for 12 percent of the total (INEGI 1999). The distinct characteristics of the states’ industrial parks are indicative of general differences in development strategies summarized in Table 6.2.
- 61.
The state government also provided over 62,000 scholarships for worker training during the sexenio (Gobierno de Puebla 1999b).
- 62.
As a result, it had been common during the 1990s and early 2000s for firms to bring in such employees from Europe or South America. Interview with Antonio Zaraín, former Secretary of Economic Development of Puebla (1999–2005), 20 October 2015.
- 63.
Interview with Volkswagen executive, 26 January 2016.
- 64.
This anomaly made the Junta technically unconstitutional according to many observers, although successive local governments ignored this issue (Interview with Socorro López, 3 May 2016).
- 65.
Control of the Feria was another longstanding privilege accorded to the conservative business elite in the state.
- 66.
These included withholding employees’ tax contributions to the social security fund and awarding contracts to businesses owned by the Feria’s president and his associates. E-consulta 27 September 1999, “La doble moral de la IP; Rodoreda, amnesia polítca” http://anuario.e-consulta.com/index.php/1999/item/la-doble-moral-de-la-ip-rodoreda-amnesia-politica?category_id=101.
- 67.
Miranda, a former president of the Social Union of Businesspeople, was a tried and true member of the conservative local business establishment and became rector of the UPAEP in the 2000s.
- 68.
While this institution failed to consolidate, it foreshadowed the split of the CCE into two rival associations in 2005 (see Chapter 9).
- 69.
Interviews with business chambers leaders, 1 December 2015 and 14 January 2016.
- 70.
Interview with Socorro López, 3 May 2016.
- 71.
During a forum organized by Coparmex to discuss the New Labor Culture, union leader Constantino Sánchez upbraided business leaders for using primary materials of “awful quality” and “obsolete equipment” (El Sol de Puebla 1 September 1995, “Agenda empresarial”).
- 72.
Interview, 8 March 2016.
- 73.
INEGI Anuario de Estadísticas por Entidad Federativa.
- 74.
El Sol de Puebla 25 November 1995, “Agenda empresarial.”
- 75.
These comments were made by the technical secretary of the Secretary of Economic Development, who warned the New Labor Culture must not “prostitute” Article 123 of the Constitution (El Sol de Puebla 7 September 1995, “El estado tiene que velar por el pleno empleo: HMH” 9/7/1995″ and El Sol de Puebla 9 September 1995, “Nueva cultura laboral, sí, pero sin ‘prostituir’ la ley laboral: Sánchez Romano”).
- 76.
This figure is cited by an official in the state’s Secretary of Economic Development. El Sol de Puebla 28 November 1995, “Volkswagen el mayor exportador estatal, con un 80%: Contreras.”
- 77.
Mexico’s unparalleled access to the US market thanks to NAFTA was a key consideration in this decision (Juárez 2005).
- 78.
See Juárez 2005. The decision to make Puebla the “lead plank” of a new model reflected a major shift in Volkswagen’s global strategy. Prior to the 1990s, VW plants in developing countries such as Mexico produced older models targeted at (usually protected) domestic markets.
- 79.
Martínez (2008) reports that upon initiating its early 1990s restructuring, VW performed a diagnostic of local firms’ capacity to meet the demands of the flexible just-in-time production model. The study found that local firms lacked the ability to produce at the requisite level of quality and scale, were unwilling to take on the necessary financial risks, and hesitated to enter into the long-term contracts demanded by VW.
- 80.
Volkswagen itself expressed its intention to build out its local supply chain in order to reduce costs on imports (El Sol de Puebla 30 November 1995, “Crecer es el reto de empresas fabricantes de autopartes”).
- 81.
Interviews with Antonio Zaraín, 20 October 2015, and business chamber president, 1 December 2015.
- 82.
An anecdote reported in El Sol de Puebla reflects the challenges that local business associations in Puebla faced in trying to forge such linkages. After learning of opportunities for local SMEs to supply the large national firm Hylsa, Canacintra organized an event to inform potential suppliers of the terms. However, only around a dozen local firms participated in the event (El Sol de Puebla 4 October 1996, “Agenda Empresarial”).
- 83.
See Chapter 3 on the composition of Puebla’s business chamber leadership.
- 84.
Interview, 3 March 2016.
- 85.
Examples of such transformations of traditional textile firms include Textiles Brito, which began producing towels and fabrics using bamboo. However, as discussed above, a more common strategy was to set up export maquilas under contracts with major international brands, using the designs and technology of those firms.
- 86.
Calculations based on INEGI Sistema de Cuentas Nacionales de México.
- 87.
Calculations based on INEGI Censos Económicos 1994 and 1999.
- 88.
By comparison, the gap in Querétaro between the auto sector (also the state’s leading industry in 1998) and the median industry in terms of productivity growth was less dramatic. The former saw an increase of 391 percent between 1993 and 1998, compared with 116 percent for the latter.
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Kahn, T. (2019). Authoritarian Political Economy and Global Integration in Puebla, 1993–1999. In: Government-Business Relations and Regional Development in Post-Reform Mexico. Latin American Political Economy. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-92351-2_7
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