GM Workers at Mexican Plant Win Independent Union in Test of Trade Rules

(Bloomberg) -- An independent union’s victory for the right to represent workers at General Motors Co.’s truck plant in Mexico has the potential to spark growth for the nation’s long-stagnant wages. 

The workers who build Chevrolet Silverado and GMC Sierra models in Silao picked the independent group, SINTTIA, to represent them by a wide margin, Mexican labor authorities said. In doing so, the 6,000 workers spurned CTM, Mexico’s entrenched labor organization, and other competing groups. 

The victory could inspire more upstart unions to try to break CTM’s longstanding grip on Mexican labor -- a process that over time could boost wages that are a fraction of those paid in the U.S. and Canada. Workers and labor rights groups have criticized the entrenched union for years, alleging that it negotiates contracts that suppress pay for the very workers it’s supposed to represent. A Bloomberg investigation substantiated the claims. The CTM didn’t respond to requests for comment. 

“The result was a real repudiation of the past and a hopeful sign for the future of the workers at the Silao plant,” said Harley Shaiken, chairman of the Center for Latin American Studies at University of California-Berkeley. “It sets a precedent for the auto industry and creates a possibility of wages going up, but there will be fierce pressure to keep wages down.”

The CTM was more interested in collecting dues and staying in control of labor contracts than representing workers, Shaiken said. He added it will take time for Mexico’s workers to win similar votes elsewhere and bargain for better pay and benefits.

Employees at the plant, located in the city of Silao, say they earn less than $25 a day, compared to a range of $18 to $32 an hour at GM plants in the U.S. and Canada. Mexico’s 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.

“SINTTIA is looking forward to bargaining a decent collective agreement,” said Mohamad Alsadi, director of the international department for Unifor, Canada’s autoworkers union. Unifor has been helping the Mexican group with its organizing drive. 

The union will aim to negotiate increases above inflation and monthly bonuses based on productivity and punctuality, Alejandra Morales, its leader, said in a press conference Thursday, who said the victory is “a historic day.” 

The vote was decisive, with SINTTIA getting 77% of the 5,478 votes. The union isn’t yet in contact with GM, Morales said, but hopes the automaker will be willing to start negotiations soon. In a statement, GM said it will comply with the law and work with the group. 

While the result is a victory for Mexican workers, they will continue to earn less than their North American colleagues for the foreseeable future. For starters, contracts in Mexico are negotiated plant-by-plant, Shaiken said. This contrasts with the U.S. and Canada, where autoworkers unions bargain for a master agreement that covers workers at most facilities -- and also gives the groups the leverage to bring a company’s production to a halt. 

Read More: GM Union Vote in Mexico Mired by Accusations of Threats, Bribes

Mexican and U.S. authorities, as well as independent observers, closely monitored the vote on Feb. 1 and 2. Eligible workers at the plant voted among four unions. 

In August, workers at the plant voted to cancel their union contract after the U.S. initiated a dispute over conditions at the factory -- a first under the USMCA. A previous vote at the GM plant in April was thrown out after Mexico found irregularities in the election, which was held by a chapter of the CTM. 

As part of the revamped North American trade deal, Mexico President Andres Manuel Lopez Obrador’s administration pushed through a law in 2019 that expands workers’ rights, including union votes by secret ballot to validate labor contracts. 

Mexico’s government estimates that before the law was passed, about 80% of union contracts were signed without the knowledge of employees. These so-called protection contracts, which grant little more than basic legal rights, have helped suppress Mexican wages and give employers more control over their workforce. 

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