Not content with taking on the fearsome drug cartels, President Felipe Calderón has now decided he wants to do battle with another source of political influence in Mexico, namely the country’s trade unions. And it is not just any union which he has chosen to confront, but one of Mexico’s oldest and most powerful, the Sindicato Mexicano de Electricistas, or SME.

Or at least that’s what he appeared to be doing when he took control of decentralised public power provider Luz y Fuerza del Centro (LyFC) on October 11. While the justification was fiscal – according to Interior Minister Gómez Mont, LyFC’s costs exceeded revenue by 88% over the last five years – the symbolism runs much deeper. For one, it was deemed necessary for federal police and military to surround LyFC buidlings, in a show of force that was presumably aimed at preventing reprisals from the company’s 40,000-strong workforce. More importantly, it has provoked condemnation of SME head Martín Esparza Flores, who has called for nationwide protests from active and retired workers, who should ‘fight to the death’ for the right to work.

Calderón, on the other hand, clearly believes in calling time on inefficient bureaucratic practices, particularly in cases where organised labour is hampering Mexico’s longer-term economic and investment climate, and RiskWatchdog tends to agree. Indeed, my colleagues at Business Monitor have long argued that rigidity of labour was one of the principal obstacles to the country ever reaching its growth potential, and union power is a major reason for this. Although the close relationship between unions and the government is not what it was under the PRI administration, organised labour is still strong in certain industries, energy being a prime example.

Can Calderón really succeed in fighting both the cartels and the unions now that his congressional wings have been severely clipped by July’s mid-term elections? Well, he seems to think so, as the takeover of a major energy company during an economic recession suggests. Public unrest is likely to rise in the short term, but by the time the 2012 general elections come round, many Mexicans could be glad their president stuck to his guns and pushed ahead with much-needed labour market reforms.