General Motors agreed to give hourly workers in Mexico an 8.5% wage increase as part of an agreement with a new union.
GM Mexico has agreed to the increase in wages at its Silao Assembly Plant in central Mexico, said Teresa Cid, GM Mexico spokesperson.
It is one of the highest recent raises in Mexico’s auto industry, appearing to top those at other automakers, according to a Reuters report. It is also the first significant raise since the start of the United States-Mexico-Canada Agreement (USMCA), often dubbed the new NAFTA. Its goal is to narrow the wage gap between US and Mexican workers.
Workers at Silao will vote on the agreement later this month. The agreement also includes that GM will pay 14% in food coupons, give a mandatory day off for Christmas Eve and provide an increase on the production bonus that was already granted by the Silao plant, Cid said.
The new contract also stipulates that the automaker and the union will “form working groups to negotiate work schedules; a protocol for dealing with sexual harassment cases; and a program to push back against inflation in the coming years,” Reuters reported. The contract lasts two years, but salaries are open for review in a year.
In February, the union, called the National Independent Union of Workers of the Automotive Industry, or SINTTIA, won the vote to represent about 6,500 workers at GM’s plant, located about 200 miles north of Mexico City. GM has operated in Mexico for 86 years.
A spokesperson from SINTTIA did not immediately respond with comment.
GM builds the highly profitable Chevrolet Silverado and GMC Sierra light-duty full-size pickups at Silao. In the most recent contract, the wages range from 184.35 pesos to a maximum of 679.53 pesos per day. In dollars, that’s about $9.15 to $33.74 per day.
In comparison, GM builds the same light-duty pickups at Fort Wayne Assembly in Indiana and will start building the light-duty Silverado at Oshawa Assembly in Ontario soon. GM builds its heavy-duty pickups at Flint Assembly and Oshawa. At those plants, wages in the UAW contract range from $18 to $32 an hour.
A New York Times article earlier this year reported the pay for starting workers at GM’s Silao plant at that time was lower than the pay “at some Nissan, Audi and Volkswagen plants in Mexico that are represented by independent unions, and just 60 cents above the country’s daily minimum wage.”
But according to Reuters, Nissan this year agreed to increase wages in Mexico 6.5%, while last year Volkswagen agreed to a 5.5% raise. Audi’s contract lists a wage increase of 5.4% each year from 2020 to 2022. GM’s increase would be the largest.
UAW spokeswoman Sandra Engle said the union did not have a comment on the wage increase in Mexico.
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But earlier this year, some UAW members viewed higher wages in Mexico as good news for both the workers in Mexico and stateside. It brings production costs on par with US factories, potentially giving US workers an edge at winning future products to build.
“Their wages go up, that helps us,” Eric Welter, UAW Local 598 shop chairman at Flint Assembly told the Free Press in February. “We’re on a more level playing field in the future.”
GM Mexico, in a statement said, “General Motors de Mexico and the National Independent Union of Workers of the Automotive Industry (SINTTIA) concluded the negotiations of the Collective Bargaining Agreement (CTA) for GM Silao. The Union will carry out the corresponding procedures with the Federal Center for Conciliation and Labor Registration, which includes a consultation process of the new contract with the workers of the GM Silao manufacturing complex, within the terms established by law.”
GM said it is committed to the GM Silao workers, “who have been key to the outstanding performance of the manufacturing complex for 27 years and with whom our company will continue its history in the country.”
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Contact Jamie L. LaReau at 313-222-2149 or email@example.com† Follow her on Twitter †jlareauan† Read more on General Motors and sign up for our cars newsletter† Become a subscriber.