After a grueling 55-day strike, nearly 3,000 workers at ArcelorMittal Mexico resumed work at the company’s steel plant in Lázaro Cárdenas, Michoacán, over the weekend.
An agreement brokered by the Labor and Social Welfare Ministry (STPS) led to the reactivation of the plant around midnight on Friday night, which is expected to positively impact related industries and the broader economy.
Workers from section 271 of the miners’ union had blocked the steel plant’s facilities since May 28, initially due to dissatisfaction with profit-sharing (PTU) payments.
ArcelorMittal, which is based in Luxembourg, operates six facilities in three Mexican ports and has a capacity of 6.5 million tonnes per year. It also runs three iron ore mines in Mexico: El Volcán in Sonora, Las Truchas in Michoacán and Peña Colorada in Colima, the latter through a joint venture with Ternium SA.
The agreement, reached on Thursday through STPS mediation in collaboration with the Federal Center for Conciliation and Labor Registration (CFCRL), mandates an 8% wage increase, grocery vouchers worth 17,000 pesos (US $949) and full compensation for lost wages.
Additionally, an external audit of the 2022 and 2023 fiscal years will be conducted to ensure the accuracy of PTU payments.
Levantan huelga en Arcelormittalhttps://t.co/ZMvgJ87sqI PIC.TWITTER.COM/RNZA1BNJJU
— Quadratín Michoacán (@Quadratin_) June 15, 2024
ArcelorMittal steelworkers on strike earlier this month in Lázaro Cárdenas, Michoacán.
ArcelorMittal and STPS both reported that the proposal to end the strike was approved by a majority of section 271 of the National Union of Mining, Metallurgical, Steel and Similar Workers of the Mexican Republic (SNTMMSRM) in Michoacán.
Even so, some members of the union opted to continue blocking the plant after the ratification vote, BNamericas reported.
“Regrettably, a group of dissidents has chosen to continue the illegal blockade with acts of violence, putting at risk the safety of those present and the population of the municipality of Lázaro Cárdenas,” ArcelorMittal said in a statement.
The last-ditch blockade eventually ended, and once it was certain that health and safety conditions were in place, workers began preparing the furnaces and other equipment to restart operations.
Earlier this month, a federal labor judge declared the strike, after which the company announced it was already in the process of dismissing union workers for this reason.
ArcelorMittal estimated its losses in steel production to be 1 million tonnes: 800,000 tonnes during the stoppage and an expected loss of 200,000 more tonnes during the restart process.
“Order cancellations and loss of customers have been very significant,” the company said in a statement. “It will be difficult to recover the market.”
The agreement stipulates that the company will pay any outstanding balance in favor of workers within 20 business days following the completion of the audit.
In urging workers to reassess their demands during the strike, CEO Víctor Cairo emphasized that ArcelorMittal had adhered to legal provisions regarding PTU payments. He noted that expecting a 32% PTU payment was outside the law and that the company’s proposal of a 10% PTU payment exceeded current legislative limits.
Governor Alfredo Ramírez Bedolla applauded the plant’s reactivation, noting that ArcelorMittal is a critical player in the state’s exports and the most important company in Lázaro Cárdenas, a port city of 84,000 people in western Michoacán.
The agreement also includes a commitment from ArcelorMittal to avoid any reprisals against workers and to halt proceedings aimed at ending individual and collective labor relations.
With reports from La Jornada, Forbes, El Universal, BN Americas and Mexico Business News
