Unmoved by Tariff Threats, Mexican GM Workers Win a Double-Digit Wage Hike

Mexican General Motors workers in the Silao, Guanajuato, factory complex clinched record raises after staring down company scaremongering about tariff threats.

“They said, well, we’re offering 6 percent,” said Norma Leticia Cabrera Vasquez about management’s offer at bargaining.

“We knew they were going to show up with that, but we said, ‘We still have weeks to negotiate, so we won’t let that intimidate us,’” said Cabrera Vasquez, who worked at the plant for 15 years, and now serves as a leader of the union’s Women’s Department.

In spite of the company's efforts to stoke uncertainty, auto workers stood their ground, garnering wage increases of 10 percent on average.

Workers in tiers making up 60 percent of the workforce will receive a raise of 10.25%; the other 40 percent will see a 9.25 percent increase. They also eliminated the lowest tier in the workforce—as such, the plant’s starting wage jumped up by 33.95 percent, to about $3 per hour. This is the second time the union has won double-digit increases, bringing GM Silao workers to the top edge of Mexico’s auto industry, with the plant’s highest-paid earners bringing in about $7 per hour.

If they continue their double-digit winning streak, workers could approach parity with some U.S. autoworkers within a decade: within nine years, the highest-earning workers could reach $16 an hour.

The new wage scale lifts two-thirds of the workforce above Mexico’s family poverty line, and well above Mexico’s minimum wage of about $1.71 per hour. The minimum itself has been raised sharply since 2018, between 12 and 22 percent each year under Mexico’s left-wing MORENA party. A proposed nationwide shift to a 40-hour workweek without a reduction in pay (Mexico’s workweek is currently capped at 48 hours) would also mark a significant advance.

Their union, SINTTIA (the National Auto Workers Union), emerged from workers’ efforts to oust their previous corrupt “charro” union, a Confederation of Mexican Workers (CTM) affiliate notorious for arranging pro-employer “protection contracts”, which lock in low wages and keep workers from forming a legitimate union, at the plant.

RELOCATION THREATS

Union leadership said they didn’t let the uncertainty around tariffs scare them into a conciliatory posture. “It would take years to transfer production,” said Alejandra Morales Reynoso, General Secretary of SINTTIA. “They’d need an installation like GM [Silao], a complex made up of six or seven plants, which would be a multi-million dollar expense.”

Knowing that, Reynoso and the bargaining committee weren’t moved by what-ifs: “They’ve always threatened to relocate, like back during the global economic crisis,” she said, but it was more profitable to leave GM Silao in operation.”

GM has indicated that it could shift some production to the United States in response to Trump’s tariffs, but little is certain in the midst of Trump’s mercurial trade policy. They may simply opt to shuffle vehicle destinations—that is, put Mexican-made pickups on the non-U.S. market, Odracir Barquera, General Director of Mexican Automotive Industry Association, told Mexico Business News.

“The cost of production of different models varies,” said SINTTIA advisor Dr. Willebaldo Gómez Zuppa, “but in terms of SUVs and trucks, labor costs [in Mexico] are really low with respect to the overall cost of vehicle production, so 25 percent wouldn’t alter that equation—it would just reduce the company’s profit margins.”

HARD DATA

“I learned a lot of interesting things about negotiation strategy,” said Alberto, a maintenance worker. While tariffs were front of mind for just about everyone during negotiations, “the most important thing for us was being grounded in reality with hard data,” he said.

Alberto, who requested we only use his first name, troubleshoots the facility’s robots and other technical issues to prevent assembly line outages. Sometimes several critical failures will occur at once—workers joke that “the devil got loose”—sending Alberto and his team on a high stakes triage. “We have to evaluate which is most critical, and go from there,” he said.

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Alberto was drawn to engineering from a young age. His father worked as a mechanic, and he has fond memories of building and disassembling motors to get a sense of how they worked.

He applied this scientific inclination to this round of salary negotiations: “There’s a whole process of information-gathering: on inflation, the plant’s productivity and profits generated, the poverty threshold and family wage calculations,” he said. Being grounded in these numbers reduced the pressure to settle for scraps.

The numbers the union based their calculations on were concrete, where any talk of tariffs was based on “pure speculation,” Alberto said. “It’d be like if I told you, ‘I can’t build here because tomorrow there could be a meteorite storm and it’ll topple my construction.’ Yeah, that could happen, but it could also not,” he said. “We went in with a solid, well conceived strategy, with hard data, and as a result we were able to pressure the company.”

WAKING UP THE CTM

SINTTIA’s winning streak is raising standards across Mexico’s auto industry and forcing the CTM to seek more for the workers they represent in an effort to hold onto their positions. Days after SINTTIA’s announcement, workers at a GM plant represented by a CTM affiliate in Ramos Arizpe, Coahuila, won a 10.8 percent raise, in what Gomez Zuppa characterized as a way to stave off a challenge from SINTTIA.

Gomez Zuppa said that previously at the Ramos Arizpe plant, raises were much lower, with 5.5 percent being the record. Of the 10.8 percent raise, he said, “Effectively, it’s an anti-union practice, and a direct confrontation with SINTTIA to prevent it from expanding its reach in the auto sector.”

Workers at the Ramos Arizpe facility received news of the deal in late March, though the contract at the plant expired on February 1st, signalling that the CTM waited to match whatever SINTTIA members earned.

A NEW UNION CULTURE

SINTTIA is pressing on with multiple organizing campaigns. Among them is the fight at Tritech Autoparts, also in Silao. Here again, the union seeks to oust the CTM, which SINTTIA alleges is intimidating workers into affiliating with the company union or get fired. A date will be set for a union election in the coming days.

At GM Silao, too, the organizing continues: workers already have their sights set on next year’s contract negotiations. “There are a lot of things people would like to see improved,” said Vasquez, including pay and more paid holidays like Mother’s Day, “so we’re collecting all of the proposals the workers have.”

Vasquez worked for six years on the production line, before moving to quality control. There, she inspected paint quality in twelve-hour long shifts, searching for defects in the paint’s cure and adherence. The work requires immense precision: some defects, like a stray hair or fiber, are visible to a trained eye, but others can only be detected with a microscope.

Vasquez has seen firsthand how a fighting union can transform conditions at work: before, she says, workers didn’t feel comfortable raising issues on the job. “We didn’t have [the previous] union’s support. Now, workers are seeing that SINTTIA will support them, and they’re speaking up,” she said.

Before, under the CTM affiliate, “The line they liked to say when you’d ask for support was: ‘Why are you complaining? Be grateful you have work,’” said Alberto. “You’d see [union leadership] with the year’s latest car, things that’d make you ask, ‘Where are our union dues going?’” Anyone who raised too many questions would see themselves fired within two to three months, he said.

Some workers are still wary after witnessing years of union corruption. “They have a mentality of, ‘Well, everyone steals, but hopefully you guys steal less,” he said. But by being transparent and fulfilling promises, he said, a new union culture is being built. He said that the union provides a clear accounting of its spending each year.

In preparation for this wage increase, Alberto has been making the rounds through the complex to talk to workers, including some still affiliated with the former union. Many, he says, have asked to shift their affiliation to SINTTIA after learning more. “It’s about generating that sense of ownership,” he said, “of feeling represented by a union that supports you.”