Automobile

GM’s Mexico labor battle spurred by workers’ safety concerns

The workers at the Silao plant say they earn less than $25 a day. That compares with salaries in a range of $18 to $32 per hour at GM plants in the U.S. and Canada. Mexico’s low wages — and its unions that traditionally look out for employers’ interests ahead of workers’ — have been targeted in the USMCA, as the regional trade pact is known.

New mechanisms in the agreement allow the U.S. to request a review of workers’ rights and labor issues. But the process has yet to be tested.

These union votes “when applied correctly, help workers to obtain better salary and benefit conditions,” said Joyce Sadka, a labor expert at Mexico City’s Technological Autonomous Institute. “But getting proper information to the workers is a weak point.”

Sadka and labor colleagues met with U.S. Vice President Kamala Harris when she was in Mexico City last week. Sadka said she told the U.S. delegation that union votes are advancing despite several challenges, including funding.

One of the workers who spoke to Bloomberg, a widow, said her current salary isn’t enough to support her three children. She said she’s been told by the current union, which is part of a broader, 85-year-old organized labor group known as the CTM, that GM will leave Mexico if workers don’t validate its contract.

In response, GM said it has been in Mexico for more than 85 years and the country represents “a key piece” of its plans. The company is deeply entrenched in Mexico, with a central office in Mexico City and facilities in Ramos Arizpe, San Luis Potosi and Toluca.

The CTM, which has 4.5 million members and, has for decades been accused of failing to protect workers’ interests. Mexico’s government estimates that about 80 percent of union contracts are signed without the knowledge of employees and grant them little more than their basic legal rights. These so-called protection contracts have helped keep wages low and companies happy in Mexico, but also triggered U.S. negotiators to instate tighter labor provisions under USMCA.

The CTM didn’t provide comment for this story when contacted by Bloomberg. After the vote was suspended in April, the union issued a statement saying it challenged the suspension of the vote with state authorities, who ordered an investigation. The CTM said it “will look for the chance to repeat the process” while complying with legal orders and guarantees of safety and transparency.

In the past, the union has defended its contracts as legally valid and carried out according to the law.

As part of the USMCA provisions, Lopez Obrador’s administration pushed through a law in 2019 that requires unions to hold votes by secret ballot to validate their labor contracts. This is meant to drive out unions that don’t legitimately represent workers — but GM’s Silao plant illustrates the challenges the nation faces in overhauling the entrenched model.

Mexico’s Labor Ministry said it shut down the union-led election at the Silao factory after discovering that unused ballots had been destroyed. When it asked to inspect the votes that had already been cast — about half of the 6,494 unionized workers had voted — the union refused, according to a preliminary report by the ministry. Lopez Obrador said the vote will have to be carried out again in order to eliminate fraud, but so far no new date has been announced, even though the time period in which a new election was supposed to have occurred has now elapsed.

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