Goodyear Plant Settles USMCA Labor Dispute

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The United States today announced the successful resolution of the eighth USMCA facility-specific Rapid Response Labor Mechanism (RRM) petition regarding the facility operated by Goodyear-SLP, S. de R.L. de C.V. in the city and state of San Luis Potosí, where workers were previously denied their freedom of association and collective bargaining rights.

In 2019 US lawmakers threatened to hold up ratification of the USMCA over pay and conditions at the plant. Reporting by Reuters at the time suggested wages at the facility are range from $2 to $6 an hour. By comparison Goodyear workers in the US reportedly receive a basic wage of $23 per hour.

In July 2023, the United States and Mexico agreed on a robust plan to address labor violations occurring at the facility related to the company’s failure to apply the sector-wide agreement for the rubber manufacturing industry (the contrato ley). That plan has now been implemented and the denial of rights concerns raised in our request for review have been remedied.

As a result, USTR has directed the Secretary of the Treasury to resume liquidation of unliquidated entries of goods from the facility.
 
“The transformation of labor relations at the San Luis Potosí Goodyear facility is remarkable,” said Deputy Undersecretary for International Affairs Thea Lee. 
 
Actions taken by the facility and the Government of Mexico to address the matter include:
 

  • The Government of Mexico oversaw a free and fair vote at the facility that resulted in an independent union representing workers for purposes of bargaining and facilitation of the contrato ley;
  • Goodyear paid 1,186 workers $4.2 million U.S. dollars in back wages and benefits owed under the contrato ley;
  • Goodyear is now applying the contrato ley at the facility, while retaining any prior wages or benefits that exceeded the terms of the contrato ley;
  • Goodyear bargained with the newly elected union, and the two parties agreed to several individual agreements on working hours and vacation periods, licenses for union representatives, productivity bonuses, salary ranges, and a payment system.  The parties also committed to continuing negotiations for salary increases for the coming year;
  • Goodyear adopted and posted a neutrality statement and company guidelines on freedom of association and collective bargaining, including a zero-tolerance policy for violations, and trained all company personnel on the guidelines and neutrality commitments;
  • Goodyear established a complaint mechanism for workers to anonymously report any violations of their rights and breaches of company guidelines on freedom of association and collective bargaining;
  • The Government of Mexico informed workers about its findings and the course of remediation, and delivered in-person trainings for company personnel on freedom of association and collective bargaining;
  • The Government of Mexico monitored the facility, including by conducting periodic inspections, and engaged with the workers and employer throughout the implementation of the course of remediation;
  • The Government of Mexico published and disseminated materials explaining key issues related to the rights of workers to freedom of association and collective bargaining, including the law related to and existence of contrato ley, to increase public awareness on the rights of workers and the responsibilities of employers, particularly at facilities covered by a contrato ley;
  • The Government of Mexico agreed to review other companies in the rubber industry and their respective agreements to guarantee that workers receive any applicable benefits under the Federal Labor Law and the contrato ley.