EXCLUSIVE Mexico’s new GM union seeks 19.2% pay rise in landmark talks

A view of the main entrance to the General Motors pickup truck plant as workers vote to elect a new union as part of labor reform that underpins a new trade deal with Canada and the United States United, in Silao, Mexico, February 1, 2022. REUTERS/ Sergio Maldonado/File Photo

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MEXICO CITY, April 26 (Reuters) – The new independent union at Mexico’s largest General Motors Co (GM.N) plant is demanding a 19.2% pay rise, citing soaring inflation, and the U.S. automaker countered with a 3.5% offer, the head of the SINTTIA union told Reuters.

GM did not confirm the percentage of its counter-offer, but said its next meeting with the union will be on Thursday, where it hopes to reach an agreement for the plant in the central city of Silao, ahead of the deadline. May 31 for the workers’ strike.

GM’s labor negotiations are a high-profile test case for a new trade deal‘s goal of narrowing the wide wage gap between American workers and their Mexican counterparts.

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SINTTIA’s proposal would raise wages at the plant that makes GM’s profitable Silverado and GMC Sierra pickup trucks up to 135 pesos ($6.62) an hour, based on a copy of the latest labor agreement consulted by Reuters.

That’s just over a quarter of the company’s starting wage in the United States, which is $17.50 an hour, highlighting the kind of disparity that has driven the United States United to push for tougher labor rules in the United States-Mexico-Canada Agreement (USMCA), the 2020 trade pact that replaced NAFTA.

SINTTIA general secretary Alejandra Morales called GM’s counter-offer a “slap in the face” at a time when workers are cutting back to meet rising prices.

The first big talks held under the new trade deal could usher in similar demands at other companies in Mexico if SINTTIA lands a big raise. US government officials who have long wanted to narrow the wage gap with Mexico are watching closely.

SINTTIA, the Spanish acronym for the Independent National Union of Automotive Workers, made its 19.2% bid when talks began last month.

Morales said that in addition to runaway inflation, the rise in wages was deserved because of an increase in production, years of lost purchasing power and the decline in the value of the peso then that GM’s earnings are in stronger US dollars.

A 3.5% increase would represent less than half of current inflation.

Talks stalled on April 12, and Thursday’s session will be mediated by federal labor officials.

The USMCA’s labor provisions were intended in part to help Mexican workers elect unions they believe would be best placed to defend their interests, breaking the grip of pro-business groups that have operated behind the scenes. workers for years as cheap labor lured businesses to Mexico.

GM is under pressure to keep costs low as it battles the first major independent Mexican labor union to emerge since the start of the new trade deal. Experts say a victory for Silao’s 6,300 workers could boost demands at its other Mexican locations and across the auto industry.

“It could be a game-changer,” said Harley Shaiken, a labor scientist at the University of California, Berkeley.

A labor dispute at the same GM plant last year prompted US officials to file the first USMCA labor complaint, threatening tariffs on GM’s Silao pickup trucks if the company did not guarantee workers’ rights.

Workers eventually ousted the massive union that had been in power for 25 years and elected SINTTIA, a nascent group led by colleagues and backed by international activists. Read more

($1 = 20.3795 Mexican pesos)

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Reporting by Daina Beth Solomon; Editing by David Gregorio

Our standards: The Thomson Reuters Trust Principles.

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