Goodyear, regrettable solution

Note published on July 21 in Reforma, Negocios [Business] Section by Verónica Gascón.

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An unfortunate precedent was published today by the Mexican government, upon today’s issuance and publication of the remediation agreement applicable to the Goodyear plant located at San Luis Potosi, deriving from a RAPID RESPONSE LABOR MECHANISM, in which the mentioned company is forced to apply the INDUSTRY-WIDE AGREEMENT of the RUBBER INDUSTRY, despite the fact that it is anachronistic and out of touch with any current reality.

The INDUSTRY-WIDE AGREEMENT establishes high labor costs, benefits that are out of all proportion, just to mention some of them: the obligation is imposed upon companies of paying worker’s social security fees, social welfare plans of 14.5%, voluntary retirements, etc. are established.

In addition to a series of clauses that limit the most important thing for companies, which is their operational flexibility; it is a grave precedent because not only Goodyear is being penalized, but all of the tire sector in the country. The INDUSTRY-WIDE AGREEMENT was one of the causes for the closing of several rubber industrial plants and, if this INDUSTRY-WIDE AGREEMENT is not significantly modernized and adjusted to the current economy, it will surely discourage investment in this important industrial sector.

Lastly, I believe that this is the pernicious effect of the USMCA against Mexico, as the American unions have won and imposed this type of disproportionate economic penalizations which can, and surely will, generate, the discouragement of investment in this sector and, of course, encouraging this investment to return to the United States and Canada.

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