Workers at Key Mexican GM Plant Scrap Current Contract

In a vote closely watched on both sides of the border, workers at a critical General Motors plant in Silao, Mexico, have scrapped their existing labor agreement with the automaker, opening the door to representation by a different and more aggressive union. 

“It’s awesome,” says Jerry Dias, president of Unifor, the union representing Canadian auto workers, who had campaigned in Mexico against the existing labor pact in Silao. “It’s good news for auto workers in all three countries.”

The vote should result in a new contract forcing GM to pay workers more than the $2 per hour they earn under the current agreement negotiated by the incumbent union in Silao, the Confederation of Mexican Workers (CTM), Dias says. 

Dias, in a phone conversation with WardsAuto, maintains CTM has held down wages as part of a “corrupt” bargain with GM in place for more than two decades. GM opened the Silao plant in 1994 and builds fullsize pickup trucks, which are among the most profitable vehicles built by the automaker and are largely shipped to the U.S. and Canada.

“This won’t hurt GM at all,” he says of a new labor agreement. “The thinnest book in the world is the book on corporate ethics. They could easily pay 10 times as much as the pay now and it wouldn’t hurt them.”

Dias describes the rejected contract as a “protection” agreement between GM and CTM designed from the start to hold down wages for Silao’s 6,500 employees.

“The UAW congratulates workers at the GM Silao plant who withstood threats and intimidation to reject a pro-employer union contract 3,214 to 2,623,” the United Auto Workers says in a statement issued after the votes were counted. 

GM says production at Silao will continue under the terms of the current agreement until a new one is negotiated and approved by a majority vote, The Associated Press reported.

The Biden Admin. pressed for a new vote under provisions of the U.S.-Mexico-Canada Agreement after determining irregularities, including destroyed ballots and attempted intimidation, in a contract ratification vote held in April.

U.S. Trade Representative Katherine Tai and U.S. Labor Secretary Marty Walsh deserve credit for filing an official complaint with Mexican officials utilizing the USMCA’s Rapid Response Mechanism, the UAW says. 

Last week’s vote at the plant (pictured, below) was conducted with observers from Mexico’s Labor Ministry, National Electoral Institute and the United Nations’ International Labor Organization, AP reported.  

GM Silao ballot boxes (HTNewz)_0

For its part, GM says it is willing to abide by the results of the latest election. 

“GM strongly supports our workers’ rights to vote as they see fit and will fully respect the outcome of the vote,” according to a statement from the automaker. “We appreciate the close cooperation of both governments and the independent observers, and have worked hand in hand with them to emphasize to all of our employees that GM is committed to a free and fair process.”

GM has tried to mitigate tensions with workers elsewhere in North America. The automaker is building four new battery plants in the U.S. and is retooling plants in Detroit and Spring Hill, TN, to build battery-electric vehicles such as the Hummer EV and the Cadillac Lyriq. GM also is spending $1 billion to retool for EV production an Ingersoll, ON, Canada, plant that was the focus of a month-long strike in 2017 over the company’s decision to move some vehicle production to Mexico. 

And the UAW has not forgotten GM’s decision in 2018 to build a new line of vehicles in Mexico while declining to make new investment at its Lordstown, OH, plant, which later closed and is now struggling to reopen under a start-up company.  

Dias says he hopes the vote in Silao will encourage workers represented by the CTM at plants across Mexico to reject their current agreements. CTM still has many agreements with other companies and automotive suppliers. 

Mexican labor law was changed in 2019 in part to expedite passage of the USMCA by Congress. The Mexican law allows workers to reject existing contracts and bring in a new union if necessary, according to Harley Shaiken, an expert on labor relations at the University of California-Berkeley. 

Shaiken says the Silao vote has broad implications for the Mexican auto industry, which has won investment by maintaining low wages. CTM, which has a long relationship with GM, will try to renegotiate the rejected contract but other, more independent unions could enter the picture.

“This is very good news for Mexican workers, but it’s also very good news for U.S. workers since it’s about harmonizing wages upwards, not downwards,” says Shaiken, who cautions the latest vote “is only the beginning of the story,” not the end.  “The important thing is, workers got to vote on the contract.”