GM and union reach deal for 10% pay hike at Mexico pickups plant

GM workers vote for a new union in Mexico

By Daina Beth Solomon

MEXICO CITY (Reuters) -U.S. automaker General Motors has agreed to hike salaries by 10% this year at its largest Mexico factory, the local union said on Monday, making for one of the biggest recent raises in the sector in Mexico.

The increase, at GM’s pickup truck plant in the central city of Silao, will go into effect for one year as of March 25 and tops last year’s deal for 8.5% pay raises, said the Silao union, SINTTIA.

“This overcomes the two-digit barrier that has not been reached in the automotive industry in many years,” SINTTIA said in a statement.

It added that the above inflation increase, along with benefits, will help workers recover purchasing power. Headline inflation stood at 7.62% at the end of February.

GM said the agreement “will benefit our workers.”

SINTTIA last year became the first independent union in the history of GM’s Silao plant after workers ousted their long-time labor representatives, opening the door to the prospect of bigger pay raises.

The election was closely watched by U.S. officials under the 2020 United States-Mexico-Canada Agreement (USMCA), a trade pact that aims to improve workplace conditions in Mexico.

In other recent salary deals in Mexico, automakers agreed to raise pay 9.4% at Audi, 9% at Volkswagen and 9% at Nissan.

(Editing by Alison Williams)