VZCZCXRO8844
PP RUEHAG RUEHDF RUEHIK RUEHLZ
DE RUEHMD #0324 0381803
ZNR UUUUU ZZH
P 071803Z FEB 06
FM AMEMBASSY MADRID
TO RUEHC/SECSTATE WASHDC PRIORITY 8849
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE PRIORITY
RUEHBO/AMEMBASSY BOGOTA PRIORITY 4915
RUEHBR/AMEMBASSY BRASILIA PRIORITY 0399
RUEHCV/AMEMBASSY CARACAS PRIORITY 0900

UNCLAS MADRID 000324

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PREL ELAB PGOV SP
SUBJECT: AMBASSADOR AND UNION LEADER DISCUSS VENEZUELA,
LABOR ISSUES


¶1. (U) During a February 6 courtesy call by the Ambassador,
Worker's General Union (UGT) Secretary General Candido Mendez
expressed concern that the USG decision to deny authorization
to transfer U.S. components as part of Spain's deal to sell
EADS CASA aircraft to Venezuela could cost Spain important
jobs in the defense industry. Mendez said the more important
contract was for the construction of the naval vessels by
shipbuilder "Navantia," but that the 12 EADS CASA aircraft
still represented a valuable contract that could now be lost.
Mendez noted that the UGT, Spain's largest union and
historically a close ally of the Socialist Party, was no
friend of the Chavez government. He said the UGT had taken a
strong stand in defense of Venezuela's CVT labor union,
leading Chavez to expel the UGT representative in Caracas.

¶2. (SBU) The Ambassador explained that the USG decision was
based on our growing concerns regarding the direction of the
Venezuelan government and was not aimed at Spain. He said
the USG had laid out its concerns to the Spanish government
in great detail over many months and was disappointed that
Spain had concluded an agreement with Chavez nonetheless.
The Ambassador noted that EADS CASA -- and the unions -- had
more to gain commercially by pursuing contracts with the USG
and other governments than through a relationship with the
Chavez government. Regarding the naval vessels, the
Ambassador said the Spanish government had assured the USG
that there would be no U.S. components involved. However, if
there did turn out to be U.S. components on the vessels, the
USG would look very carefully at any associated technology
transfer request.

//SPAIN LABOR ISSUES//

¶3. (U) Mendez outlined his three priorities as leader of the
UGT: the prevalence of temporary employment contracts as
opposed to permanent positions, high unemployment among
youth, and a high unemployment rate among women. Mendez said
the issue of Spain's low population growth rate was being
resolved through increased immigration, though he
acknowledged that immigration was generating its own set of
challenges. He took credit for the Zapatero government's
2005 amnesty of illegal immigrants, saying the UGT had
quietly proposed the measure as the only way to resolve the
abuses typical of employment in the informal sector. Mendez
said the UGT had borrowed directly from the recent strategy
of the AFL-CIO in welcoming immigrant labor as a new source
of members (NOTE: only 18 percent of the Spanish labor force
is unionized. END NOTE). He said the UGT had conciously
selected a North African immigrant woman to head its
Immigrant Affairs office to send a message to potential new
members.

//COMMENT//

¶4. (SBU) Mendez was friendly and gregarious in his meeting
with the Ambassador and clearly wanted to establish a good
relationship. He did not raise the UGT's strong opposition
to the war in Iraq or his organization of massive rallies
against the war, even when the discussion turned to the
danger posed by extremist veteran jihadists of that conflict
returning to their homes in Europe. Mendez seemed satisfied
by the Ambassador's explanation on the EADS CASA aircraft
issue, though he was obviously concerned by the possibility
of delays in the execution of the ship deal. Doubtless he
recalled the violent strikes carried out by shipyard workers
across Spain when the Navantia's predecessor, IZAR, was
forced to trim jobs in response to a business slowdown. For
Mendez and other union leaders, the possibility of retaining
hundreds of jobs in this failing industry overshadows any
qualms they may have about dealing with Chavez.
AGUIRRE