Mexico sends letter to U.S. to start remediation in disputed GM vote

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MEXICO CITY (Reuters) – Mexico has sent the United States a letter that formally kicks off a joint negotiation to resolve a U.S. complaint over a disputed contract vote at a General Motors Co (NYSE:GM) factory, Mexican officials said on Monday.

Workers had voted in April on whether to keep their current contract, however, halfway through Mexican officials detected “serious irregularities”, including destroyed ballots and scrapped the vote.

The findings prompted the United States to ask Mexico to review the case for possible rights violations under the United States-Mexico-Canada Agreement (USMCA).

Mexico’s labor ministry said last week that the union at the plant, which employs about 6,000 people in the central city of Silao, must hold a new vote before Aug. 20 or lose the contract altogether.

The letter to the United States – marks the next step in the formal USMCA complaint process – reiterated those terms, the labor ministry told Reuters.

The economy ministry confirmed that the letter had been sent.

It also stated that the goal of the remediation would be to ensure that the majority of workers at the GM Silao plant will be able to vote freely and without intimidation, the labor ministry said.

The labor ministry declined to share the original letter.

Both the U.S. and Mexican governments will have at least 10 days to come to an agreement on the remediation plan.

Labor remedies under the USMCA include revoking tariff-free access for the violating factory’s goods.

In GM’s case, that could mean applying a 25% U.S. pickup truck import tariff on Silao-made trucks, a move that could add thousands of dollars to each vehicle’s cost.

GM has previously said it will cooperate with both governments and that it condemned violations of labor rights including actions to restrict collective bargaining.

The so-called request for review marks the first use of the Rapid Response Labor Mechanism in USMCA, which allows countries to target labor rights violations at specific factories.