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In Mexico autos town, labor rights falter despite U.S. trade deal

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By Daina Beth Solomon

MATAMOROS, Mexico (Reuters) – After successfully staging a wildcat strike for higher wages in 2019, many workers at the Tridonex auto-parts plant in the Mexican city of Matamoros, across the border from Texas, set their sights higher: replacing the union that they say failed to fight for them.

Six workers at the factory, which refits second-hand car parts for sale in the United States and Canada, told Reuters they felt let down that their union, SITPME, did not back their demands for better pay. About 400 Tridonex workers protested outside a Matamoros labor court last year to be allowed to switch unions.

When the first protests broke out in 2019, many of the plant’s roughly 4,000 workers earned just above the then-minimum wage of 176.72 pesos ($8.82) a day.

The Tridonex workers and thousands more at other Matamoros factories walked off the job demanding a 20% raise and 32,000-peso bonus, many without union backing. In nearly all cases, the companies conceded.

“This showed us what we were capable of,” said Edgar Salazar, then a Tridonex employee. “We know we have rights, but the union just wants to cash in. It doesn’t support us at all.”

Jesus Mendoza, SITPME’s long-time leader, said his union generated jobs and delivered perks to its members while maintaining harmonious relationships with employers.

However, Salazar and many of his Tridonex colleagues wanted to throw their support behind a new organization led by activist and attorney Susana Prieto.

But their efforts are failing, labor experts acknowledge.

Dismantling the power of Mexico’s entrenched unions is proving a tough challenge, some labor activists say, with few signs that reforms promised under a new North American trade deal are yet charting an easier course.

Amid resistance from SITPME, the Tridonex workers’ request to be represented by Prieto’s union has still not been put to a vote. Legal challenges by attorney Prieto to replace unions at 45 other factories in the area have also stalled.

When Prieto urged strikes in January to again demand higher pay, just a few hundred people protested across a handful of companies.

“They’re scared, because they don’t have anyone to defend them,” Prieto said. According to Prieto, about 600 of her supporters at Tridonex — including Salazar — were fired between April and October 2020. Reuters could not independently confirm this.

Cardone Industries, Tridonex’s Philadelphia-based parent, did not respond to a question about allegations of retaliation.

It says layoffs were made due to reduced demand following pandemic lockdowns but did not provide further details. Cardone is controlled by Canadian company Brookfield Asset Management.

SLOW PROGRESS

Leftist President Manuel Andres Lopez Obrador passed a law in 2019 guaranteeing workers the right to independent unions. Though strong on paper, it does not come fully into effect until 2023.

“The law in general is very good. But that doesn’t mean we’re going to get any change in Mexico anytime soon,” said Kimberly Nolan, a labor scholar at the Latin American Faculty of Social Sciences research institute.

Some of the Matamoros workers are now looking to the United States for backing.

A new free trade deal between Mexico, the United States and Canada (USMCA) implemented last year enshrined workers’ rights to choose which union administers their collective contract.

With Democrat Joe Biden now president, Mexico may come under close scrutiny to uphold the USMCA’s pro-worker provisions, which were partly designed to prevent low labor costs from leeching more U.S. jobs.

Under the treaty, companies failing to ensure freedom of association for workers in Mexico could be sanctioned with tariffs and other penalties.

The Office of the U.S. Trade Representative, which runs U.S. trade policy, did not respond to a question of how the Biden administration would treat violations of the trade pact’s labor measures.

But Katherine Tai, head of the agency, said last week she was “not afraid” to use the enforcement provisions of the USMCA, without specifying which issues could come under review.

The powerful U.S. union federation, the AFL-CIO, told Reuters in April it was drafting cases against companies in Mexico under USMCA, and would make details public in May.

Matamoros is one of a string of Mexican border cities which American firms were lured to by cheap labor in recent decades. Its factories supply parts for General Motors Co, Toyota Motor Corp, Stellantis and other automakers.

Booming trade with the United States has brought jobs to areas of northern Mexico but labor rights lag.

Companies in Mexico have commonly fired workers, among other tactics, rather than allow them to agitate for new unions, say activists, scholars and government officials.

“They fire them; they suppress them. They stop giving extra hours. They don’t give bonuses. They change them to night shift,” said Alfredo Dominguez, head of the Federal Center of Conciliation and Labor Registration, created under the labor reform to ensure collective contracts are legitimate.

One of the labor ministry’s priorities is to eliminate so-called “protection contracts,” signed between unions and employers without workers’ prior consultation or knowledge, which Dominguez said make up at least 80% of all collective contracts in Mexico.

The labor reform, once implemented, will also do away with local panels blamed by labor activists for long delays in the process of establishing new unions like Prieto’s. The boards will be replaced with tribunals reporting to the judicial branch.

NEW TACTICS

Frustrated by delays in setting up a new union, hundreds of Tridonex workers early in 2020 opted for a new tactic: declaring they no longer wanted to pay dues to the established union, SITPME. After several tense protests, Tridonex consented.

Then firings began, four workers told Reuters.

In March 2020, Efren Ruiz, who cleaned and assembled brake parts for Tridonex and was a vocal advocate of Prieto’s union, was dismissed.

“This is reprisal,” Ruiz remembered telling a supervisor, before security guards escorted him out, he said.

Three other workers also said they believed their union activism led to their dismissals. A government record seen by Reuters, dated October 30, 2020, shows Tridonex dismissed 717 people from April to October last year.

Reuters was unable to determine if any have been hired back since. Mexico’s Social Security Institute, which tracks employment, said it could not comment on individual companies.

Prieto said the firings were retaliation by the company to protect SITPME and prevent more strikes for better pay.

SITPME leader Mendoza described complaints of retaliation as “lies.” Cardone said in a statement the staff reduction was due to a drop in demand and was “managed through transparent and constructive discussions with employees and relevant trade unions.”

SITPME – which extols membership perks such as medical and legal aid – said it lured back at least 3,000 people from different companies who had supported Prieto’s breakaway group. Reuters could not independently confirm this.

Mendoza noted that he strives for dialogue with companies, not strikes: “What we do well is guarantee labor peace and efficiency in the workforce.”

 

(Reporting by Daina Beth Solomon; additional reporting by Ben Klayman in Detroit and David Lawder in Washington; Editing by Christian Plumb, Daniel Flynn and Alistair Bell)

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Calgary Stampede to proceed with limited events

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The Calgary Stampede, an annual rodeo, exhibition and festival that is also Canada‘s biggest and booziest party, will go ahead this year after being pulled in 2020 due to the pandemic, though it will not look and feel the same, an event organizer told CBC Radio.

“It won’t be your typical Stampede … it’s not the experience that you had in years past,” Kristina Barnes, communications manager with the Calgary Stampede, told a CBC Radio programme on Friday.

She said organizers were still deciding whether to include rodeo or the grandstand show in this year’s version.

Known as “the greatest outdoor show on earth,” the Stampede draws tourists from around the world for its rodeo and chuckwagon races, but much of the action happens away from official venues at parties hosted by oil and gas companies.

“The Safest and Greatest Outdoor Show on Earth is what we’re going to call it this year,” Barnes said, adding the organizers are working directly with Alberta Health to ensure Stampede experiences stay “within the guidelines” that may be in effect in July.

The event is scheduled to take place between July 9-18, according to the Calgary Stampede website.

Last month, Alberta Premier Jason Kenney told reporters the Calgary Stampede can probably go ahead this year as Alberta’s coronavirus vaccination campaign accelerates.

Barnes and the office of the Alberta premier were not available for immediate comment.

The cancellation of the event last year was a crushing disappointment for Canada‘s oil capital.

The news comes as Alberta has been dealing with a punishing third wave of the pandemic, with the province having among the highest rate per capita of COVID-19 cases in the country. Data released on Friday showed the province had 1,433 new cases, compared with the seven-day average of 1,644.

 

(Reporting by Denny Thomas; Editing by Chris Reese)

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U.S. trade chief pressured to lift duties on Canadian lumber

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 As U.S. Trade Representative Katherine Tai prepares to meet her Canadian and Mexican counterparts on Monday to review progress in the new North American trade agreement, she is under pressure from home builders and lawmakers to cut U.S. tariffs on Canadian lumber.

Shortages of softwood lumber amid soaring U.S. housing demand and mill production curtailed by the COVID-19 pandemic have caused prices to triple in the past year, adding $36,000 to the average cost of a new single-family home, according to estimates by the National Association of Home Builders (NAHB).

Republican lawmakers have taken up the builders’ cause, asking Tai during hearings in Congress last week to eliminate the 9% tariff on Canadian softwood lumber imports. Senator John Thune told Tai that high lumber costs were “having a tremendous impact on the ground” in his home state of South Dakota and putting homes out of reach for some working families.

The Trump administration initially imposed 20% duties in 2018 after the collapse of talks on a new quota arrangement, but reduced the level in December 2020.

“The Biden administration must address these unprecedented lumber and steel costs and broader supply-chain woes or risk undermining the economic recovery,” said Stephen Sandherr, chief executive officer of the Associated General Contractors of America. “Without tariff relief and other measures, vital construction projects will fall behind schedule or be canceled.”

On Friday, White House economic adviser Cecilia Rouse said the Biden administration was weighing concerns about commodity shortages and inflation as it reviews trade policy.

The tariffs are allowed under the U.S.-Mexico-Canada Agreement on trade, which permits duties to combat price dumping and unfair subsidies.

The U.S. Commerce Department has ruled that lumber from most Canadian provinces is unfairly subsidized because it is largely grown on public lands with cheap harvesting fees set by Ottawa. U.S. timber is mainly harvested from privately-owned land.

Tai said she would bring up the lumber issue with Canadian Trade Minister Mary Ng at the first meeting of the USMCA Free Trade Council, a minister-level body that oversees the trade deal.

WILLING PARTNER

But Tai told U.S. senators that despite higher prices, the fundamental dispute remains and there have been no talks on a new lumber quota arrangement.

“In order to have an agreement and in order to have a negotiation, you need to have a partner. And thus far, the Canadians have not expressed interest in engaging,” Tai said.

Youmy Han, a spokeswoman for Canada‘s trade ministry, said the U.S. duties were “unjustified,” and that Canadian Prime Minister Justin Trudeau has raised the issue with U.S. President Joe Biden.

“Our government believes a negotiated agreement is possible and in the best interests of both countries,” Han said in an emailed statement to Reuters.

But builders are growing frustrated with a lack of high-level engagement with high-level Biden administration officials on the issue as they watch lumber prices rise.

“They are clearly still gathering facts, which is even more frustrating given that this issue has been going on since before the election, before the inaugural,” said James Tobin, a vice president and top lobbyist at the NAHB.

 

(Reporting by David Lawder and Jarrett Renshaw in Washington and David Ljunggren in Ottawa; Writing by David Lawder; Editing by Paul Simao)

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Centerra to fight Kyrgyzstan takeover of its gold mine

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Centerra Gold said on Sunday it has initiated binding arbitration against Kyrgyzstan government, after the parliament passed a law allowing the state to temporarily take over the country’s biggest industrial enterprise, the Kumtor gold mine operated by Centerra.

Recently, a Kyrgyzstan court also imposed $3.1 billion fine on Kumtor Gold Company (KGC), which operates the gold mine, after ruling that the firm had violated environmental laws.

The gold miner said that it intends to hold the government accountable in the arbitration for “any and all losses and damage” due to its recent actions against KGC and the Kumtor mine if no resolution is reached.

“The Government’s actions have left Centerra no choice but to exercise our legal rights, through the pursuit of arbitration and otherwise, to protect the interests of KGC, Centerra and our shareholders,” Centerra’s Chief Executive Officer Scott Perry said in a press release.

Kyrgyzstan has a long history of disputes with Centerra Gold over how to share profits from the former Soviet republic’s biggest industrial enterprise.

 

(Reporting by Maria Ponnezhath in Bengaluru; Editing by Lisa Shumaker)

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