The new independent union at the largest General Motors plant in Mexico is seeking a 19.2% wage increase, citing rising inflation, and the US automaker has responded with a 3.5% offer.
The leader of the SINTTIA union, Alejandra Morales, did not confirm the percentage of her counter offer, but assured that her next meeting with the union is on Thursday, where she hopes to reach an agreement for the plant in the central city of Silao, anticipating the deadline of 31 May for workers to go on strike.
GM’s labor negotiations are a major test of the new North American trade agreement’s goal of reducing the huge wage gap between US workers and their Mexican counterparts.
SINTTIA’s proposal would increase wages at the plant that makes the profitable Silverado and GMC Sierra pickup trucks to 77.15 pesos ($3.81) an hour, according to a copy of the most recent collective agreement seen by Reuters. This is about a quarter of the company’s starting wage in the United States of $17.50 an hour.
That kind of disparity fueled the United States’ insistence on tightening the labor rules of the United States-Mexico-Canada Agreement (TMEC), which in 2020 replaced NAFTA.
SINTTIA’s secretary general called GM’s counteroffer “a slap in the face” at a time when workers are making cutbacks to cope with rising prices.
The first talks held under the new trade deal could lead to similar lawsuits at other companies in the country if SINTTIA gets a big raise. US government officials, who have long wanted to reduce the wage disparity with Mexico, are paying close attention.
SINTTIA presented its 19.2% proposal when talks began last month. Morales said that, in addition to runaway inflation, the wage increase was justified by increased production, years of declining purchasing power and the loss of value of the peso, while GM’s profits are in stronger US dollars. .
A 3.5% increase would be less than half current inflation. Talks stalled on April 12 and Thursday’s session will be mediated by federal labor officials. The TMEC’s labor provisions were intended in part to help Mexican workers choose unions they deemed best suited to fight for their interests, breaking the grip of pro-business groups that operated behind their backs for years as cheap labor lured. companies to Mexico.
GM is under pressure to keep costs down as it takes on the first major independent Mexican union to emerge since the start of the new trade deal. According to experts, a victory by Silao’s 6,300 workers could spark higher demands at other plants in Mexico and throughout the auto industry. “That could be a game changer,” said Harley Shaiken, a labor scholar at the University of California, Berkeley.
A union dispute at the same GM plant last year prompted US officials to file the TMEC’s first labor complaint, threatening tariffs on GM’s Silao trucks if the company didn’t guarantee workers’ rights. The workers eventually expelled the union that had been in power for 25 years and chose SINTTIA, a fledgling group led by co-workers and supported by international activists. The acronym stands for National Independent Union of Workers in the Automotive Industry.
