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Mexico looks at improving contract votes after GM dispute

Stock MarketsJun 29, 2021 06:35PM ET
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© Reuters. FILE PHOTO: The new GM logo is seen on the facade of the General Motors headquarters in Detroit, Michigan, U.S., March 16, 2021. REUTERS/Rebecca Cook/File Photo

By Daina Beth Solomon

MEXICO CITY (Reuters) - Mexico is looking at new ways to carry out the worker contract votes that are required under a recent labor reform, officials said on Tuesday, after a disputed vote at a General Motors (NYSE:GM) plant drew U.S. scrutiny over possible worker rights violations.

Mexican authorities found "serious irregularities" in the April vote at GM's pick-up plant in Silao, in which workers voted on whether to keep their current collective contract.

In an effort to avoid a repeat scenario, Mexico is looking at giving inspectors more power to monitor, part of several changes being considered amid pressure from the Biden administration.

"Without a doubt, the experience we had with the General Motors Silao case showed the need to keep strengthening this instrument and adding others," said Esteban Martinez, a Mexican labor ministry official, at an online panel with trade and labor officials from the United States and Canada.

Mexico's labor ministry plans to allow inspectors to not only silently observe the vote, but also "assume a proactive role," including suspending the process if they detect irregularities or potentially illegal acts.

As well, the ministry is establishing a requirement for results to be valid only if a majority of workers cast ballots, Martinez said.

He noted that some unions may choose not to hold a vote at all and let their collective contracts expire because they do not expect to rally sufficient worker support.

A key goal of Mexico's labor reform, which underpins the new United States-Mexico-Canada Agreement (USMCA), is to do away with so-called "protection contracts" that prioritize business interests over worker rights, and are signed behind their backs between companies and unions.

The U.S. government last month asked Mexico to review the GM case, flagging potential worker rights abuses that could violate the USMCA.

Mexico's labor ministry has begun talks with U.S. counterparts on a remediation plan under the trade pact's enforcement mechanism and has ordered the GM union to re-do the vote before Aug. 20.

Mexico looks at improving contract votes after GM dispute

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