For the automotive sector, union democracy advances ‘very, very slowly’

Note published in Milenio, Negocios [Business] Section by Omar Brito.
Read the note in its original source

Only four manufacturers have advanced in the legitimization of their Collective Bargaining Agreement; legal experts foresee a possible shock in the sector due to pressure from the United States after the signature of the USMCA.

Despite the fact that the United States Industry has its eyes on the democratic processes of the Mexican automotive unions, progress in the legitimization of Collective Bargaining Agreements in this sector has progressed very, very slowly, since only 4 assemblers and 21 manufacturers have carried out this process, and historical unions such as Volkswagen, Nissan and Audi, which proclaim themselves as being independent, remain outside of the process.

The automotive industry is one of the priorities of the United States-Mexico-Canada Agreement (USMCA) and, therefore, a shock is expected for Mexican union organizations in the next three years.

Up until the end of 2020, only 25 unions in the industry had presented their certificate of legitimization; 21 of these unions correspond to auto-parts manufacturers and only 4 assemblers are there; including, importantly, Ford Motor Company, Honda de México, TMMGT Servicios (Toyota), Valeo Sistemas Eléctricos, Nemak México, Cerrey, Impro Industries México and Kromberg & Schubert México LE.

According to the Department of Labor, the first consultation event dates from November 13, 2019, as part of the legitimization process of the CCT of RDCM, S. de R.L. de C.V., the vast majority of the legitimization procedures have taken place in the North part of the country and in the Bajío area, particularly in the states of Nuevo León and Guanajuato.

One hundred percent of the legitimization procedures “have been successful, summoning an approximate of over 30 thousand workers,” said the agency, noting that all consultation events have been attended by federal labor inspectors, regardless of whether the union has opted for the presence of a notary public.

Pressure from the governments and unions of the United States and Canada will cause workers’ organizations of the automotive industry in Mexico to be the ones under the greatest scrutiny in regard to compliance with democracy in their processes and, therefore, a renovation of leaderships and labor conditions is expected. In short, pressure by those actors could put an end to union “charrismo” [union leaders being in league with employers and/or the government and not truly seeking what is best for the workers] in assemblers and auto-parts companies in our country.

This is how Ricardo Martínez, a specialist on the topic, views these matters; he believes that change will be difficult, but the points out that any violation to the USMCA could create problems for the government and for the companies installed in Mexico.

“Speaking of their unions, we could say that the old Mexican plants: referring to Ford, General Motors and Chrysler, are basically with the Confederation of Mexican Workers (CTM) and have very stable unions with whom they have a good relationship, a proper relationship and, on the other hand, we have other companies that have independent unions such as Volkswagen in Puebla, Nissan in Cuernavaca and this causes unionism in the automotive industry to be a very active unionism, stable, but with real collective bargaining.”

The Doctor in Labor Law and director of the De la Vega & Martínez Rojas Firm highlighted that Mexico has become a country “with a great automotive orientation” and with great importance in the auto-parts market and, therefore, it is of vital importance that the labor reform be complied with.

“With this labor reform that we had, that essentially protects effective collective bargaining and the right to association, we will be seeing new actors in some of the plants. Some union democracy is arising more strongly, because we should note that some of the old leaderships have had the same leaders, the same general secretaries for years, and this is creating some movement”, said Ricardo Martinez.

“With the new union democracy established in the labor reform, now elections will be conducted through free voting, we will see changes of leaderships and perhaps changes of unions, and we also believe that pressure from the United States will have a significant effect on the automotive industry”, he added.

He explained that, within the USMCA, it was established that a worker belonging to the automotive industry will have to earn up to 16 dollars per hour, which he predicted, will be a complicated scenario for companies and unions.

“This means that if they are not complied with, tariff and customs duties rights of the plants located in Mexico could be suspended or limited”, he warned.

Companies do not have a collective bargaining agreement

  • Chrysler Toluca. National Union of Workers of the Integrated Automotive and Allied Industries of the Mexican Republic (CTM) .
  • General Motors. Union of Workers of the Integrated Automotive and Allied Industries of the Mexican Republic (CTM).
  • Mazda. National Union of Workers of the Integrated Automotive and Allied Industries of the Mexican Republic (CTM).
  • Nissan. Independent Union of Nissan Mexicana (Independent).
  • Mercedes Benz. Union of Workers of the Integrated Automotive and Allied Industries of the Mexican Republic (CTM).
  • Volvo. Union of Workers of Manufacture, Repair, purchase and sale of Articles for the Automotive Industry (CTC).
  • Volkswagen. Independent Union of Workers of the Automotive and Allied Industries, Volkswagen de México (UNT).
  • BMW. National Union of Workers of the Integrated Automotive and Allied Industries of the United Mexican States (CTM).
  • Audi. Independent Union of Audi México Workers (Independent).

Given all of this, Ricardo Martínez predicted that the United States will not take long to request an “arbitration panel” to verify that all of the terms in this area are met and, in his opinion, unions and companies will be hard-pressed to pass the test.

“The United States has put a lot of emphasis, has installed three authorities in place to monitor compliance with the labor reform; in particular, we have an agency specifically assigned to monitor the free trade agreement with the Department of Labor, Economy and the Treasury Department of the United States, as well as a council of experts to which three union leaders from that country have been appointed: from the Steel Workers, FLCO and auto-parts and this has placed a great deal of pressure on us.”