GM’s Mexico Labor Battle Spurred by Workers’ Safety Concerns

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Workers at the General Motors Co. plant at the center of a U.S.-Mexico trade controversy say they’re fighting to replace their union because of safety issues, including what they characterize as lax enforcement of Covid-19 protocols.

The facility, located near the central Mexican city of Silao, has emerged as an important test case for new labor provisions under a revamped North America trade agreement. And as one of three GM plants that produce highly profitable pickup trucks, it’s critical to the company’s balance sheet. Five employees at the plant spoke to Bloomberg News. They asked that their names not be published due to fear of reprisal.

One said her work area isn’t socially distanced -- even after two employees on her team died from Covid-19. Another said her husband, a co-worker, caught the virus, but was told to return immediately to work without getting a test. A third said she hasn’t been given a proper uniform that prevents her from getting burns on her legs, and that she’s developed back problems because she hasn’t been provided with the right footwear.

GM’s Mexico Labor Battle Spurred by Workers’ Safety Concerns

In an emailed statement, General Motors’ Mexico office said safety is its priority. The company said it has implemented “strict health security protocols” following recommendations from Mexican authorities and the World Health Organization. The plant has had five inspections by state and federal agencies related to pandemic measures that found it to be fully compliant with protocols, the automaker said. It added that it provides its workers with protective equipment and carries out regular training sessions to reinforce safety.

The five workers who were interviewed are part of a group that is seeking to replace the current union. They say 18 of their colleagues were fired in 2019 for organizing workers to choose an alternative.

General Motors said it “respects and supports the rights of our employees to make a personal, free, secret and direct response in regards to its union representation.” The company said it will follow the law to ensure the integrity of the voting process at the plant.

The allegations underscore the difficulties at the plant, which has more than 6,000 unionized workers and is located about 215 miles (350 km) northwest of Mexico City. Mexican authorities shut down a union-led vote there earlier this year, citing irregularities. U.S. trade chief Katherine Tai later asked the nation to review whether employees were being denied the right of free association and collective bargaining -- opening a thorny bilateral issue.

The complaints also show that some Mexican workers are eager to challenge the status quo under the new regime after decades of a system they view as ineffectual.

Wage Discrepancy

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% 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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