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U.S. weighs labor probe into Stellantis Mexico plant, Mexican officials say -Breaking


© Reuters. FILEPHOTO: This view depicts the logo of Stellantis, at the entry to the factory of the company in Hordain (France), July 7, 2021. REUTERS/Pascal Rossignol

By Daina Beth Solomon

MEXICO CITY, (Reuters) – The U.S. is looking into filing a complaint against Stellantis in the Netherlands for alleged labor violations at a Mexican car parts plant. Two Mexican labor officials said that this was being considered by the government.

The U.S. Trade Rep will investigate Teksid hierro de Mexico in the north border state of Coahuila. This would be the fourth labor-related complaint filed against a Mexican company since 2020, when the United States-Mexico-Canada Agreement was in effect. It was designed to improve conditions in Mexican workplaces.

Both the U.S. Trade Representative’s Office and Department of Labor were unable to comment.

When asked about the possible labor inquiry at the Coahuila plant, Stellantis said it respects collective-bargaining rights and will comply with local laws. After the merger of Peugeot (OTC) maker PSA with Fiat Chrysler last year, this conglomerate has become the fourth-largest automotive group worldwide.

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The new trade pact replaces NAFTA and has stricter regulations. Factory workers who violate worker rights may lose their export tariff-free status. These early cases have been carefully monitored by companies to determine how the new rules will play out.

Teksid is a company that makes heavy vehicle iron castings and employs almost 1,500 workers. Since 2014 it has been in a labor dispute. Labor activists believe this has stopped workers being represented by the Miners Union.

According to activists, workers also were fired for their support of the Miners Union.

According to Alejandro Encinas (head of institutional relations and policy at Mexico’s Labor Ministry), the U.S. labor authorities informed Mexico in May that they would be investigating opening a complaint against Teksid.

He said, “The United States are reviewing the case.”

Encinas failed to name the unions which raised this matter with U.S. officials.

Alfredo Dominguez (head of Mexico’s federal labour center), said that the U.S. had to receive the petition from the unions within 30 days to decide whether or not to proceed with the case under USMCA’s Rapid Response Mechanism, which aims to quickly resolve any disputes.

Previous complaints targeted the automotive sector as well with investigations into U.S. automaker General Motors, Japanese conglomerate Panasonic (OTC) and U.S. factory Tridonex.

Stellantis has seven additional Mexican factories that span engine, stamping and assembly. The company produced over 400,000 vehicles last year.