Events at the Coca-Cola plant in Guatemala had for some time been under scrutiny by a group of Coke shareholders in the US. These were several churches and religious orders who happened to own shares in the company and belonged to an organisation called the Interfaith Centre for Corporate Responsibility (ICCR). ICCR believes in using shareholders’ rights to put pressure on large corporations by raising issues in public and submitting resolutions to corporation annual general meetings.
ICCR first approached the headquarters of Coca-Cola in Atlanta towards the end of 1976, to express concern about the company’s bottler in Guatemala. They prepared a resolution for Coke’s 1977 AGM to which the company responded by bringing Trotter to meet the shareholders, and then offering an investigation if the group would agree to withdraw their resolution. The investigation, by Coke lawyer E. Bledel, was a whitewash, and the shareholders were not convinced. ln January 1978 an ICCR delegation flew to Guatemala City. Despite lavish hospitality laid on by Trotter, they had the opportunity to meet the leaders of STEGAC — who made a deep impression on them — and to sit in on the union’s first convention.
On receiving the news of the murder of Pedro Quevedo, the STEGAC treasurer, in December 1978, ICCR once again submitted a resolution to Coke’s AGM, calling for the company to insert a code of conduct for labour relations into its contract with franchisees. By now the Torres and Israel Marquez were in Costa Rica and ICCR decided to bring them to the US for Coke’s AGM in 1979. The company was taken by surprise when Marquez stood to speak. After a detailed catalogue of the murder and intimidation practised at EGSA, Marquez concluded with a simple statement which was picked up by the world’s press: ‘ln Guatemala, Coca-Cola is a name for murder’.
Coke versus IUF
In early 1979 STEGAC had for the first time made contact with the IUF, the Geneva-based International Union of Food and Allied Workers’ Associations. IUF is one of the Intemational Trade Secretariats (ITSs), which are autonomous confederations of unions in the same industry or occupation. It had affiliates in 60 countries, but none in Guatemala. Previously, it had undertaken multi-country campaigns on behalf of the workers of several large multinationals, notably Nestlé and Unilever. ln May 1979, IUF received news of the arrest of Yolanda Urlzar, the new STEGAC lawyer who replaced the Torres when they were forced into exile. The federation asked its affiliates to send cables of protest to the Guatemalan government. This marked the beginning of IUF’s long involvement with the Coca-Cola workers in Guatemala.
Dan Gallin, the general secretary of the IUE was one of the members of Amnesty International’s first ever fact-finding mission to Guatemala in August 1979. Amnesty had invited him because of their particular concern about the repression of trade unionists in Coca-Cola, Kern Foods and the sugar mills. The delegation’s conclusion was simple: “To be a trade unionist in Guatemala is to risk one’s life.”
Dan Gallin returned from the Amnesty mission determined that the IUF must act to help the Coca-Cola workers. For the remaining months of the year various IUF committees discussed what could be done. First, on 17 December the IUF wrote to Coca-Cola to request a meeting on the situation at EGSA. Then, on 2 January, the IUF issued a circular to affiliates suggesting a boycott of tourism — a move which received backing the same month from the general conference of trade secretariats (ITSs) in London, and from the European TUC. Finally, on 18 January 1980 a meeting took place in Atlanta between senior Coke executives, Dan Gallin and several US food industry trade unionists. Israel Marquez and Enrique Torres were also present.
Ever since it received the first enquiries about EGSA, Coca-Cola headquarters in Atlanta had maintained that it assumed no responsibility for, and had no means of controlling, its independent bottlers. The IUF and the church shareholders refused to accept this stance. For them, Coke Atlanta’s responsibility was clear. As Dan Gallin wrote in a letter to the corporation:
By allowing EGSA to use your trade mark, to act as your representative in Guatemala and by deriving financial benefits from your agreement with this company, you have committed your company’s image and interest. If your licence holder is seen to be directly responsible for murders and other acts of violence, threats and intimidation committed against the members of the union representing the employees of EGSA, continuing cooperation between your company and this license holder constitutes complicity.
The corporation’s strategy to combat the adverse publicity seems to have been to put mild pressure on Trotter to halt the violence, hoping that either the problem would be resolved, or at least matters could wait until the franchise expired. Coke executives were particularly anxious to do nothing that might become a precedent and disturb the comfortable relationship the company had with the majority of its franchisees.
At the 1979 AGM Coca-Cola had admitted for the first time that its contract with Trotter was due to expire in October 1981, and might not be renewed. Apart from the trade union issue, Coke may have had its own commercial reasons for wanting to get rid of Trotter. Nevertheless, the company still refused to take responsibility for events at EGSA, claiming that legally it could do nothing until the franchise expired. The IUF warned that its affiliates around the world might begin to take action against the company. Coca-Cola workers in Guatemala were being killed -– they could not wait until October 1981.
Coke workers during the 1984 occupation. Credit Jenny Matthews.
At the end of January 1980, the manager of Coca-Cola Sweden sought out IUF president Sigvard Nyström, a fellow Swede. Stressing that the company was doing all it could to resolve the problems in Guatemala, he asked th IUF to postpone its actions. This was the first of the many meetings between local Coke managers and trade unionists in their respective countries, with the company attempting by persuasion and sometimes positive disinformation to head off boycott action and cast doubt on the wisdom of the IUF. The federation was not deceived. On 1 February 1980 it issued a circular to all affiliates, asking them to take whatever action possible to bring pressure to bear on Coca-Cola. The boycott was on.
The sparkle of death
Coca-Cola was, and is, more vulnerable to international trade union pressure than most other corporations because it has a single, simple product, marketed to virtually every consumer in three-quarters of the world (see box below). Coke is highly dependent upon its image for maintaining it high sales and market share against Pepsi-Cola and other rival companies. As explained by Mr R. Cooper, Coke’s chief executive for Northern Europe, Coke management pursue a strategy of ‘The Three Xs’: Coke products should be highly Available, Affordable, and Acceptable. Any damage to this ‘acceptable’ image is as dangerous a threat to the company as a boycott of the product.
IUF affiliates around the world responded well to the federation’s call for action. Letters began to flow to the managers of local Coca-Cola plants, and to the corporation headquarters in Atlanta. There were production stoppages at Coca-Cola plants in Finland (25-28 April), New Zealand (29 May) and Sweden (one week in late April). Stoppages were threatened in Canada, Mexico, West Germany, Mexico, Norway and Britain.
Consumer boycotts began at varying levels in many countries. Students and factory workers had Coke removed from cafeterias and vending machines. The company symbol appeared on countless stickers and posters subtly altered to show images of workers in chains or bottles of blood. Coke’s favourite advertising slogan throughout Latin America was ‘Coca-Cola: La chispa de la vida‘ (Coke: the sparkle of life). It was the work of seconds to amend this to: ‘La chispa de la muerte‘ (the sparkle of death).
The CLC (Canadian TUC) set up a fund and sent money to STEGAC to support the families of those kidnapped or killed. The CLC also called on the Canadian government to halt all aid to Guatemala. In Israel, the Histradut (TUC) protested against Israeli arms sales to Guatemala; West German unions contacted major travel agencies to urge cancellation of tours to Guatemala; and in the US the United Auto-Workers urged congressmen to oppose military aid to the Lucas Garcia government. In Britain, various unions held information meetings, sent messages of support to the Coke workers, or made representations ta management at Coca-Cola plants (see box, chapter 5).
Although the measurable economic effect of these actions was very small, in almost every case they led to wide discussion of events in Guatemala and intensive ‘fire-fighting’ measures by Coca-Cola in an attempt to avert threatened action and to halt further unfavorable publicity. As one IUF officer put it: ‘The publicity hurt the most. They live on their name. Anything that damages their image will cost them money.’
Settlement
Coke Atlanta’s response to the call for a boycott was to reiterate its position that it could not intervene between union and management at a franchise plant. But at the same time Coke implied that negotiations were under way for a quick sale – which could be delayed or cancelled by boycott action. John Kirby, Coca-Cola’s candidate to buy out Trotter, visited the EGSA plant in May 1980, and after surveying the climate of violence, promptly withdrew. On 23 June, the remaining STEGAC workers came out on strike, and although staff association members continued to work, production was at a virtual standstill.
On 8 July a group of senior Coca-Cola executives flew to Geneva and requested a meeting with the IUF. They offered several alternative solutions, but the IUF would accept only a buy-out which would guarantee continued employment for the EGSA workers and full recognition of the union. A new buyer was found for the plant, Antonio Zash, an executive at McCann-Erikson who had managed bottling plants for bath Coke and Pepsi-Cola. Zash teamed up with Roberto Méndez, the manager of a Mexican Coca-Cola plant, and most of the finance was put up by Coca-Cola Atlanta.
On 7 September the sale of the plant to Zash and Méndez was completed, and the new owners and representatives of Coca-Cola Atlanta met the IUF in Mexico City. The new management took over the plant on 1 October, and after some delays in removing the security guards, signed a new agreement with the union on 20 December. One month later the IUF notified all affiliates that the EGSA dispute was over.
The settlement was a tremendous victory for the Coca-Cola workers and their union, STEGAC. They had forced the parent company to intervene; they rid the plant of Trotter, bis managers, hired thugs and security guards; the plant remained in operation and most of the jobs were saved; the staff association was dissolved, and STEGAC itself fully recognised; and Coca-Cola was to establish a fund to provide for the families of EGSA workers who had been killed.
Perhaps most important of all, the agreement was made amidst extensive publicity, in tripartite negotiations between Coca-Cola Atlanta, STEGAC and the IUF Even the Guatemalan government expressed satisfaction, and announced that Trotter would not be allowed to return to the country.
STEGAC appeared to have a series of solid guarantees, not least Coke Atlanta’s commitment to retain overall control for five years. The church shareholders in the US could also be relied upon to resume their pressure upon the corporation if required. However, the decisive gain was that an international trade union body, the IUF was a party to the agreement.
Finally, there were now groups of trade unionists, students and others all over the world who had heard of the Coca-Cola workers of Guatemala and who would be prepared to resume the boycott campaign against what the Miami Herald called “the shapely bottle of sparkling brown liquid that has come to symbolise US world commercial hegemony”.