Mexican Workers Win Double-Digit Pay Increase From GM

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General Motors reached an agreement calling for a 10% pay increase with the independent union representing more than 4,000 hourly employees at GM’s truck assembly plants in Silao, Mexico,

GM Silao aerial shot — Workers at GM’s plant in Silao, Mexico voted to be represented by an independent union last year, and it paid off with a 10% increase in wages.

“We are pleased that we were able to reach an agreement with SINTTIA on behalf of employees at GM’s Silao Assembly Plant,” GM said in a statement e-mailed to TheDetroitBureau.com.

Double-digit wage increase approved

The new 1-year agreement calls for a 10% pay increase, according to Harley Shaiken, a labor expert from the University of California.

“This overcomes the two-digit barrier that has not been reached in the automotive industry in many years,” SINTTIA said in a statement.

Shaiken said the deal is an impressive win for the union, noting it’s “an incredible achievement” for the union. The pay increase exceeds the rate of inflation in Mexico and also is slightly better than the pay increase won by the independent union workers representing worker at assembly plants operated in Mexico by Nissan, Audi and Volkswagen, he noted, adding SINTTIA can return to the bargaining table next year if inflation in Mexico accelerates.

Impact in North America

GM Silao Mexico Truck Plant line — GM’s Silao, Mexico truck plant has been at the center of some union labor strife during the past few years.

GM is facing negotiations for new labor contracts across North America as the company’s deals with the United Auto Workers in the U.S. and Unifor in Canada will expire in September.

The UAW is still in the midst of selecting a new president. But Lana Payne, Unifor’s president, has said the union representing auto workers in Canada knows GM has enjoyed record profits.

Unifor also helped bring about change in Silao by supporting a movement for a new union in the plant.

Workers at the Silao plant ousted the old union, CTM, during a contentious campaign last year, which included one of the first applications of Mexico’s new labor, giving employees more control over their union representation.

Both Mexico’s new labor law and the campaign for the new union, SINTTIA, followed passage of the new USMCA trade agreement in 2020. To guarantee Congressional passage of USMCA through the House of Representative controlled by the Democrats, the Trump administration had agreed to have the new labor requirements included in the trade agreement, which replaced the North American Free Trade Agreement long criticized by the UAW and other U.S. unions.

Low wages still prevail in Mexico

GM Arlington Texas plant — GM is facing a new set of negotiations with the UAW this summer.

The election was closely watched by U.S. officials, looking to see wages in Mexico blunt the movement of jobs from the U.S.

CTM, which was accused of squelching dissent while maintaining influence over local political figures in the states where auto plants were located, was long considered one of the major barriers to boosting wages in the Mexican automotive sector by outside researchers. Blunting the influence of CTM with independent unions was one of the goals of the new labor rules built into the USMCA.

Unfortunately, Shaiken said, the effort to raise wages in Mexican auto plants still has a long way to go. “Mexico is still a country with high productivity and relatively low wages,” he said.

The combination of USMCA, which allows the duty-free export of finished automobiles to dealers in the United States, and the Biden administration’s Inflation Reduction Act, has intensified investment in Mexico as Tesla’s recent announcement it plans to build a new gigafactory near Monterey, Mexico underscored.

“It will be Tesla’s largest plant,” he said. “The vehicles built there will be eligible for the full $7,500 tax credit,” he noted, even as they pay low wages.

GM also is making plans to build electric vehicles in Mexico at the Silao plant and at another assembly complex in Ramos Arizpe, which is preparing to launch battery-electric utility vehicles this year.