GM, new union in Mexico strike deal for raises at Silao plant

MEXICO CITY - General Motors and a new independent union at the U.S. automaker's biggest Mexican plant have reached a deal for a new workers' contract that includes raises and benefits above inflation, the union said on Wednesday.

The negotiations at GM's plant in the central city of Silao in Guanajuato state marked a high-profile test case for a new trade deal's goal of reducing the vast wage gap between U.S. workers and their Mexican counterparts.

The agreement comes after talks began several weeks ago, and forestalls a May 31 deadline for workers to strike.

The Chevrolet Silverado and GMC Sierra are built at the plant.

"The new collective contract improves labor conditions on all levels," the union, SINTTIA, said in a statement. "The agreed deal includes an economic package of salary increases and economic benefits that is above inflation."

SINTTIA did not provide further details about the above-inflation wage deal. Mexican headline inflation rose 7.68 percent in the year through April to its highest levels since January 2001.

"General Motors de Mexico and the National Independent Union of Workers of the Automotive Industry (SINTTIA) concluded the negotiations of the Collective Bargaining Agreement (CTA) for GM Silao," GM said in a statement. "The Union will carry out the corresponding procedures with the Federal Center for Conciliation and Labor Registration, which includes a consultation process of the new contract with the workers of the GM Silao manufacturing complex, within the terms established by law.

"General Motors reiterates its commitment to the GM Silao workers, who have been key to the outstanding performance of the manufacturing complex for 27 years and with whom our company will continue its history in the country."

SINTTIA became the first independent union in the GM Silao plant's 25-year history in one of the first union elections under the trade deal, the United States-Mexico-Canada Agreement (USMCA).

The provisions in the 2020 deal that replaced the North American Free Trade Agreement (NAFTA) were meant to help Mexican workers elect unions that will best fight for their interests, breaking the grip of business-friendly groups that operated behind workers' backs for years as cheap labor lured companies to Mexico.

Reuters reported last month that SINTTIA initially proposed a 19.2 percent raise, citing rising inflation in Mexico, which GM countered with an offer of 3.5 percent.