Strike action in Matamoros, Tamaulipas, will result in the loss of 15 manufacturers that have decided to leave Mexico, according to a business leader who warned that about 30,000 jobs would be lost.

Luis Aguirre Lang, president of the National Council of the Maquiladora Industry (Index Nacional), said most of the firms are in the automotive sector.

At least 30,000 factory workers went on strike in the northern border city last Friday after failing to reach an agreement for higher pay.

Of 45 employers affected by the stoppage, 27 had agreed by last night to union demands for a 20% increase in workers’ salaries and a 32,000-peso (US $1,700) annual bonus.

However, Aguirre said even though companies are signing new collective agreements with workers, some of them plan to leave Mexico in the next six to nine months anyway.

He described the strikes as illegal and said it was regrettable that the federal government hadn’t intervened given that the Tamaulipas Conciliation and Arbitration Board recused itself from talks between 15 companies and leaders of the Union of Laborers and Industrial Workers of the Maquiladora Industry (SJOIIM).

Aguirre said companies faced stiff penalties for not complying with production contracts and that 21 manufacturing regions could see a reduction in foreign direct investment as a result of the work stoppages.

He said the Matamoros branch of Index Nacional has been negotiating collective agreements with the SJOOIM on behalf of 40 of its member companies for 30 years.

However, Aguirre claimed that after the increase to the minimum wage in the northern border region, the two parties had a different interpretation of one clause in the contracts, precipitating the dispute.

The SJOOIM interpretation resulted in its demand for a radical 20% pay increase, he said.

Kristobal Meléndez Aguilar, a researcher at the Center for Economic and Budgetary Research in Mexico City, said that while the increase to the minimum wage in the region along with reductions to the value-added and income tax rates were “good in theory, in practice it’s not easy because after a few months companies lack liquidity because they have to fund [the pay increase] or turn to credit.”

He added: “What’s happening in Matamoros is worrying because it could discourage the arrival of FDI [foreign direct investment], hence the role of the federal government in mediating between the two parties is essential.”

Source: El Economista (sp), Milenio (sp)