New union surges at GM Mexico plant, and that could benefit US autoworkers

FILE PHOTO: GM's truck assembly plant in Silao, Mexico

It may be too soon to know whether car buyers will see a boost in prices for full-size pickups after workers at a General Motors plant in Mexico voted to form the first independent labor union earlier this week but U.S. autoworkers are cheering the move, saying it makes them more competitive with that nation’s workforce.

The union, called the National Independent Union of Workers of the Automotive Industry (SINTTIA), won the vote by a wide margin to represent about 6,500 workers in upcoming labor negotiations at GM’s Silao Assembly plant, located about 200 miles north of Mexico City. Both wages and benefits are expected to increase under the union.

GM builds the highly profitable Chevrolet Silverado and GMC Sierra light-duty full-size pickups at Silao. In the current plant contract, it said the wages range from 184.35 pesos to a maximum of 679.53 pesos per day. In dollars, that’s about $8.97 to $33.05 per day. In contrast, 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 range from $18 to $32 an hour.

The 2022 Chevy Silverado starts at $31,500 and climbs to more than $65,000 depending on the model; the GMC Sierra starts at $30,800 and increases to more than $78,000, according to Kelley Blue Book.

An article in the New York Times reports the pay for starting workers at GM’s Silao plant is 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.”

UAW members view higher wages in Mexico as good news for both the workers in Mexico and stateside. It brings production costs on par with U.S. factories, potentially giving U.S. workers an edge at winning future products to build.

“Their wages go up, that helps us,” said Eric Welter, UAW Local 598 shop chairman at Flint Assembly. “I don’t know what initial benefit there’ll be, but it makes us more competitive and helps us not to have to make future sacrifices. We’re on a more level playing field in the future.”

‘Bleed-off to Mexico’

Welter said the initial benefits will be seen in the U.S. parts and supplier industry.

There, the average wage is about $12 an hour, closer to the wages paid in Mexico, Welter said. He speculates that might prompt suppliers to build more parts in the U.S. rather than in Mexico, then pay to ship them to the states.

“Everyone is trying to get wages up down there, so that it’s not a bleed-off to Mexico,” Welter said.

UAW Local 598 Shop Chairman Eric Welter. He represents the 5,000 hourly workers at General Motors Flint Assembly plant where the automaker builds its heavy-duty pickups.
UAW Local 598 Shop Chairman Eric Welter. He represents the 5,000 hourly workers at General Motors Flint Assembly plant where the automaker builds its heavy-duty pickups.

GM has made considerable investments in its U.S. operations in recent years. Last month, GM said it will invest $7 billion in four manufacturing sites in Michigan after local and state governments granted it big tax incentives. The investment will include constructing a new battery cell plant in Lansing and expanding its Orion Assembly plant in Orion Township to build the 2024 Silverado EV pickup, along with Factory ZERO in Detroit and Hamtramck.

But other truck plants such as Flint Assembly, Fort Wayne Assembly and Arlington Assembly in Texas have yet to be allocated future electric vehicles, a big concern for other UAW-represented workers.

UAW Local 2209 Shop Chairman Rich LeTourneau at Fort Wayne Assembly did not immediately respond with a comment.

More: GM’s huge Michigan investment left out Flint Assembly, leaving workers anxious for future

In a UAW statement issued Thursday, the union said it congratulates the workers of GM Silao on “forming a free, fair and independent SINTTIA union. We commend the Biden Administration and (the office of the United States Trade Representative) for ensuring a fair election process and we look forward to a new era of free, fair, independent unions in Mexico.”

GM’s reaction

But what will that all mean for truck prices?

GM spokesman David Barnas declined to comment on how potential wage and benefit gains for workers at Silao might impact GM’s U.S. production plans or pricing of future vehicles, noting, “they haven’t even started the collective bargaining process with the newly elected union at Silao yet.”

Barnas said the results will be finalized in the following days and GM will act in compliance with the law “to work with the union representatives elected by the workers, SINTTIA, to negotiate a Collective Bargaining Agreement for the manufacturing complex in Silao.”

 A GMC Sierra 1500 pickup on the assembly line at the General Motors Fort Wayne Assembly plant on Tuesday, May 14, 2019 in Roanoke, Indiana. GM announced Thursday, May 30, 2019 it is investing $24 million in the plant to expand production of full size Chevrolet Silverado 1500 and GMC Sierra 1500 pickups in Roanoke, Indiana.
A GMC Sierra 1500 pickup on the assembly line at the General Motors Fort Wayne Assembly plant on Tuesday, May 14, 2019 in Roanoke, Indiana. GM announced Thursday, May 30, 2019 it is investing $24 million in the plant to expand production of full size Chevrolet Silverado 1500 and GMC Sierra 1500 pickups in Roanoke, Indiana.

General Motors de Mexico confirms that the compensation benefits in the current collective bargaining agreement remain in place until a new one is negotiated. Barnas said GM is committed to Mexico and its employees.



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