MEXICO CITY - The new independent labour union at General Motors' largest Mexican plant is seeking a 19.2 per cent wage increase, citing surging inflation, and the U.S. carmaker has countered with an offer of 3.5 per cent, the head of the union SINTTIA told Reuters.
GM would not confirm the percentage of its counter-offer but said its next meeting with the union is Thursday, where it hopes to reach a deal for the plant in the central city of Silao, forestalling a May 31 deadline for workers to strike.
The GM labour negotiations are a high-profile test case for a new trade deal's goal of reducing the vast wage gap between U.S. and Canadian workers and their Mexican counterparts.
SINTTIA's proposal would boost wages at the plant that makes GM's profitable Silverado and GMC Sierra pickups to as much as 77.15 pesos (US$3.81 or about C$4.85 at April 26's exchange rate) an hour, based on a copy of the most recent collective contract seen by Reuters.
That's about a quarter of the company's U.S. starting wage of US$17.50 an hour — about C$22.32 — highlighting the kind of disparity that drove U.S. insistence on tougher labour rules in the United States-Mexico-Canada Agreement (USMCA), the 2020 trade pact that replaced NAFTA. New hires at GM's Oshawa Assembly Plant in Oshawa, Ont., northeast of Toronto, start at C$23 per hour.
SINTTIA's Secretary General, Alejandra Morales, called GM's counter-offer "a slap in the face" at a time when workers are cutting back to cope with rising prices.
The first major talks held under the new trade deal could usher in similar demands at other companies in Mexico if SINTTIA lands a big raise. U.S. government officials who have long wanted to lessen the wage disparity with Mexico are closely watching.
SINTTIA, the Spanish acronym for the National Independent Union of Automotive Industry Workers, made its 19.2 per cent proposal when talks started last month.
Morales said that on top of surging inflation, the salary increase was merited due to an uptick in production, years of lost purchasing power and the peso's sliding value while GM's profits are in stronger U.S. dollars.
A 3.5 per cent increase would be less than half of current inflation. Talks stalled April 12, and Thursday's session will be mediated by federal labour officials.
The USMCA labour provisions were partially meant to help Mexican workers elect unions they feel will best fight for their interests, breaking the grip of business-friendly groups that operated behind workers' backs for years as cheap labour lured companies to Mexico.
GM is under pressure to keep costs low as it faces off with the first new major independent Mexican union since the start of the new trade deal. A victory for the 6,300 workers in Silao could spur higher demands at its other Mexico sites and across the auto industry, experts say.
"That could be a game changer," said Harley Shaiken, a labour scholar at the University of California at Berkeley.
A union dispute at the same GM plant last year prompted U.S. officials to lodge the first USMCA labour complaint, threatening tariffs on GM's Silao pickups if the company did not guarantee worker rights.
Workers ended up ousting the massive union that had been in power for 25 years and elected SINTTIA, a fledgling group led by fellow workers and supported by international activists.