Stellantis parts subsidiary in Mexico resolves USMCA labor complaint

Breana Noble
The Detroit News

A Stellantis NV parts subsidiary in Mexico has agreed to recognize an independent labor union, resolving a complaint by the U.S. government under the U.S.-Mexico-Canada trade agreement, the U.S. Labor Department said Tuesday.

Teksid Hierro de México has recognized the Miners union, days after the United States requested a review of possible labor rights violations under the Trump-era trade pact at the behest of a petition by the United Auto Workers and the Mexican labor union.

The petition accused the company of denying freedoms of association and collective bargaining to employees at the Teksid facility in Frontera, a city in the border state of Coahuila. The Mexican government, following an investigation, helped facilitate an agreement between the union and Teksid, which must rehire, with years of back pay, 36 workers who reportedly were fired in retaliation for supporting the independent labor group. Reuters first reported the expected resolution of the government's complaint.

“The measures taken," U.S. Labor Secretary Marty Walsh said in a statement, "after invoking the U.S.-Mexico-Canada Agreement Rapid Response Mechanism will help end eight years of rights violations against Teksid workers and advance their freedom of association and ability to collectively bargain.”

In Mexico, unions with alliances with employers have helped to keep wages down for decades, attracting investments and draining manufacturing jobs from the United States.

"This successful outcome demonstrates that we are creating a more competitive North American economy where workers and unions can operate on a level playing field,” U.S. Trade Rep. Katherine Tai said in a statement. “The actions announced today reflect the shared intent of the United States and Mexico to ensure that trade benefits workers on both sides of the border."

The USMCA, which replaced the North American Free Trade Agreement in 2020, requires Mexico to have laws for the effective recognition of workers' freedom to bargain collectively. It allows the United States to revoke the tariff-free status on exports from individual factories that fail to comply with domestic labor laws such as the reforms Mexico instituted in 2019.

Teksid makes cylinder heads and blocks for heavy vehicles, including trucks for Cummins Inc., AB Volvo and Mack Trucks Inc. Labor activists say since 2014, the company that employs nearly 1,500 people has fired and blocked workers from being represented by the National Union of Mine, Metal, Steel and Allied Workers of the Mexican Republic, which is known shortly as the Miners Union.

On May 5, the UAW and the Miners Union submitted a petition under the USMCA's Rapid Response Labor Mechanism to the Interagency Labor Committee for Monitoring and Enforcement that Tai and Walsh chair. The committee determined there was sufficient credible evidence of the allegations that Teksid Hierro workers were being denied unionization rights.

Teksid is the fourth company to resolve a complaint under the RRLM. The first, a probe into a General Motors Co. truck plant in Mexico, resulted in a breakthrough chance for workers to vote on union representation last year, securing an 8.5% wage increase in May.

Fiat Chrysler Automobiles NV in 2019 — prior to merging with French automaker Groupe PSA to create Stellantis — had agreed to sell subsidiary Teksid SpA's iron casting operations to Brazil's Tupy SA. The U.S. Justice Department approved the sale in July, but required that the deal exclude Teksid's Mexican operations over concerns it could lead to higher prices for heavy-duty trucks.

Twitter: @BreanaCNoble