Article from Mexican Labor News & Analysis
Published by UE International.

Date published: March 2016

Web version:

Downturn in Steel Sales Led to Layoffs

The layoffs that sparked the strike were a result of a decline in the world steel market. Areclor Mittal, with operations in 60 countries and some 210,000 employees worldwide, has some 8,500 employees in Mexico, 7,600 in the port of Lázaro Cárdenas. The international corporation produced more than 114 million tons of crude steel in 2015, shipping some 84.6 million tons.

But with a surplus production of steel on the world market, the Luxembourg-based company, which is the world leader in the industry, posted a net loss of $7.9 billion for 2015. In an attempt to improve its situation, the company decided to layoff the Mexican workers while working on new equipment and organization to improve productivity.

Secretary of Labor Seeks Peaceful Outcome

When the Miners and Metalworkers struck, the Secretary of Labor declared their strike illegal, and it seemed as if the workers would be in for the usual violent scenario. In 2006, President Vicente Fox’s government sent in police to break a strike by Local 271 at SICARTSA in Lázaro Cárdenas, killing two workers and injuring dozens of others. On this occasion, state and federal police were sent to the area of the plant, but the Secretary of Labor surprisingly opted for negotiations rather than repression.

Labor authorities commonly declare strikes illegal in Mexico. In the past, the labor authorities have refused to recognize miners’ strikes by the same union in Taxco, Guerrero; Sombrerete, Zacatecas; and Cananea, Sonora. And the authorities have often cooperated with the mining companies in attempts to dislodge the SNTMMRM and replace it with a pliant company union. So the agreement by the Secretary of Labor to oversee negotiations outside of the usual legal process was extraordinary.

International Labor Solidarity Playes a Role

The striking metalworkers received support from the United Steel Workers of Canada and the United States whose president Leo W. Gerard sent a letter to Mexican President Enrique Peña Nieto and to Secretary of Labor stating that there was “great concern” in many countries over the lack of human and labor rights in Mexico. Gerard insisted that the right to strike of the ArcelorMittal workers be respected. Local 271 also had the backing of IndustriALL , an international federation of industrial unions.

It is too early to say whether or not Secretary of Labor Navarrete Prida’s handling of this strike represents an exception to the rule or the beginning of a new government policy, but his handling of this strike certainly deserves note.

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