United States authorities have urged Mexico to prevent retaliation against workers after U.S.-based company VU Manufacturing closed its factory in Coahuila rather than comply with a remediation plan to address violations of workers’ rights.
VU Manufacturing, a Troy, Michigan-based company that owns the car upholstery factory in Piedras Negras, Coahuila, has been investigated twice under the United States-Mexico-Canada Agreement (USMCA) for interfering with workers’ rights to free association and collective bargaining.
In the most recent case, the Interagency Labor Committee (ILC) asked Mexico to review the facility after receiving complaints from two Mexican labor organizations in December that workers at VU Manufacturing had been intimidated into voting for the minority company union.
Mexico conducted the review and concluded that ongoing denials of rights were happening at the factory. On March 31, the United States and Mexico announced a remediation plan to address these violations through the USMCA’s Rapid Response Labor Mechanism (RRM).
But rather than comply with the plan, the company has closed its doors, leaving more than 400 workers unemployed.
“We note with disappointment VU’s decision to close its facility without adhering to the agreed remediation course,” said Thea Lee, U.S. Deputy Undersecretary for International Affairs. “We urge the government of Mexico to seek remedies for the affected workers and strategies to prevent retaliation against former VU workers at other facilities.”
Lee stressed the RRM’s good track record since the USMCA came into force in 2020, which she said “has resulted in employers taking significant actions to improve labor practices, benefiting workers’ rights in both countries.”
It is the first time the U.S. has criticized a company for failing to comply with a USCMA labor review, after instigating similar investigations in 13 other workplaces and negotiating remediation plans at six.
Pablo Franco, a spokesperson for Mexico’s section of the International Lawyers Assisting Workers (ILAW) Network, called VU Manufacturing’s decision to close its plant “a serious precedent which calls into question the effectiveness of the Rapid Response Labor Mechanism. Especially because in this case we’re talking about a company with U.S. capital.”
In a statement, U.S. Trade Representative Katherine Tai assured that the U.S. would continue to work closely with Mexico to protect the affected workers and to enforce the collective bargaining protections enshrined in the USCMA.
“The U.S. will continue to monitor the situation regarding VU Manufacturing to verify that the rights of workers previously employed by the company are respected, that outstanding wages are paid, and that neither the company nor any potential successors violate the terms of the USMCA,” she said.