By Liam Stack of the Daily Star Egypt…

Life in the delta town of Mahalla was disrupted last week by a boisterous strike at the mammoth Ghazl El Mahalla industrial complex, where 27,000 workers walked off the job and took up residence with their families in a tent city inside the factory gates.
At energetic rallies in front of the factory gates, workers banged drums and chanted slogans against a cast of would-be villains including their local government-appointed union committee, the chairman of the board of Misr Spinning and Weaving, and the World Bank.
They demanded a host of changes ranging from the payment of promised bonuses to the dissolution of Egypt’s union system and the overthrow of President Mubarak.
The strike had its roots in a similar protest last December. That strike ended when management and the state promised to improve working conditions and include employees in a profit-sharing deal that would pay them a bonus equal to 150 days wages if the company turned a profit of more than LE 60 million.
At the end of the fiscal year in July, Misr Spinning and Weaving posted profits of more than LE 170 million although workers only received a bonus of 20 days’ pay.
Worker leaders reacted with outrage. They accused the management of reneging on its promises and began to organize for a new action.
After striking for six days, the workers’ negotiating team abandoned many of their more radical political demands and focused instead on winning a verbal commitment to the payment of their bonuses.
In talks that stretched late into the night, the two sides agreed upon a deal that independent observers say is both financially generous and politically significant.
“The settlement is pretty remarkable for a couple of reasons,” said Joel Beinin, the director of the Middle Eastern Studies department at the American University in Cairo.
“In terms of the economic issues, the workers pretty much won everything they wanted, and they did it pretty quickly.”
According to Sayed Habib, a leader of the Mahalla movement, the management agreed to pay the workers an immediate bonus equal to 70 days’ wages. They also pledged to pay a later bonus of 60 days’ wages after consulting with the firm’s administrative general assembly.
While management failed to commit to the principle of profit-sharing, they promised that future bonuses will be larger than in the past and will also be tied to an annual salary increase of seven percent.
The negotiations did score some political victories even though they did not result in extreme changes such as the overthrow of the regime or the dissolution of the Egyptian Trade Union Federation (ETUF) — a government body formed in 1957 and widely seen as a tool of state repression.
Chief among them was the forced resignation of company CEO Mahmoud El Gibali and the firm’s board of directors.
“That is a pretty political thing to do, considering that this is a public sector company and those guys are all government appointees,” says Beinin.
Additionally, the chairman of the factory’s local union committee also resigned after he was hospitalized following an attack by a group of striking workers. Like all members of the local union committee, he too was appointed by the state.
As the largest and one of the oldest public sector enterprises in Egypt, Ghazl El Mahalla has always served as one of the bellwethers of labor unrest. What workers there win from the state, workers elsewhere can be expected to demand as well.
For that reason, Beinin thinks Mahalla will inspire more strikes in the coming months, and that the regime will most likely continue to appease workers’ economic demands while overlooking the political ones.
“The Mahalla workers are in an almost unique position vis-à-vis the government because their legitimacy is unassailable,” he told Daily News Egypt. “Their enterprise is the flagship enterprise of Egyptian economic nationalism, and unlike many textile firms, it is profitable. But the workers there are paid a pathetic amount of money that it is impossible to raise a family on.
“Everyone but the business elite supports them,” he added. “I think the regime has either decided that it should help them, or that it has to.”
The government’s conciliatory approach to labor unrest is in stark contrast to the increasingly repressive measures it has taken over the last year against dissent from the middle class and urban intellectuals.
Some, like AUC Professor Saad Eddin Ibrahim, have fled the country. Others, such as newspaper editor Ibrahim Eissa or Muslim Brotherhood leader Khayrat El Shater, have been subjected to grueling trials within the civil or military justice system that critics dismiss as kangaroo courts.
While it appears the regime is trying to smother working class dissent with financially favorable settlements, Beinin warns that the regime’s willingness to pay out could quickly harden if workers pressed their demand for the dissolution of the ETUF.
“The demand for an independent labor union has been around for at least a decade, but there has never really been any rank-and-file organizing around it,” he says.
“What is happening in Mahalla is the first real instance of that,” he added. “But the regime will fight very, very hard against this demand. Control of the union apparatus is one of its main tools for retaining power and has been for years.”
The distance between the ETUF and workers is the most serious problem in labor politics, says Kamal Abbas, the director of the Center for Trade Union and Worker Services, which was shut down by the authorities in March.
He says that as long as the union fails to represent workers, more strikes are inevitable.

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