General Motors Co. will raise wages 8.5% for workers at its giant truck factory in central Mexico in a deal struck with a new union that swept into power through a landmark labor vote backed by the US.
The labor agreement at the plant in Silao, Guanajuato, also includes quarterly bonus increases of 1,600 pesos (about $79), the union said in a statement Thursday.
Employees at the plant have said they earn less than $25 a day, compared with a range of $18 to $32 an hour at GM plants in the US. An 8.5% raise would mean about $2 extra per day for the average workers plus bonuses, still leaving a wide gap in comparison to workers in the US. It’s also less than 1 percentage point above annual inflation in Mexico, which hit 7.68% in April.
In an earlier round of negotiations, the union known as SINTTIA had asked for a 19.2% wage increase citing higher costs, and GM had counter-offered with a 3.5% hike. The 8.5% plus the other bonuses will amount to a global hike of 13.8%, the union said.
Read More: GM, Mexico Union Reach Agreement to Raise Wages Above Inflation
The union won the right to represent more than 6,000 workers at the plant in a bellwether election in February that was a test to labor reforms encouraged both by the North American free trade agreement known as USMCA and Mexican President Andres Manuel Lopez Obrador.
The GM labor agreement also establishes a program of “salary recovery,” as well as bilateral protocols to involve the union in important decisions at the plant on workers’ rights and conditions, SINTTIA said.
Hector de la Cueva, who advised the union during the negotiations said that the salary recovery program means that both sides will be negotiating possible salary hikes throughout the year for the next two or three years, in addition to the annual contract revisions.
The agreement will be put up for a vote among unionized workers.
GM said in a statement it had reached an agreement with the union but declined to share details.