Labour tensions involving transnationals

Multinational enterprises tend to use the existence of their international network of manufacturing facilities as a means of coercing trade union negotiators in a given country to accept inferior agreements on the occasion of disputes and collective bargaining. The immobility and fragmentation of labour organization in respect to ability to cross national boundaries, and the greater geographical flexibility and centralized decision making of many transnational corporations, allows a favourable balance of bargaining power sharply in favour of the corporations. Such corporations can transfer existing production or new investment to other countries, thus depriving workers of jobs to the advantage of more amenable workers in other countries; decisions having repercussions on working conditions and the social rights of the employees are often made outside the country in which they are implemented, and the employees usually have no access to the decision makers.

Central America in the mid-1980s saw a TNC-led drive to erode the considerable gains which organized workers had made in some sectors in some countries, e.g. banana workers in Costa Rica, who striking against a British-based company in 1994 met with open fire from government security forces, injuring 45 people.