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Mexico’s auto workers agree to further cuts to remain competitive

06/04/2008, 5:27 PM

By Drew Johnson

When the North American Free Trade Agreement was inked in 1993, it was thought that it would help bring Mexican wages up to par with those paid to workers in America. However, at least in the auto industry, the exact opposite has been the result.

With the auto industry more global than ever, inexpensive labor from developing countries is driving down labor costs at an ever increasing rate. We’ve seen that here in the U.S. with the newly passed two-tier wage system, and now similar reform is being passed in Mexico.

Although Ford’s pledge to build the Fiesta in Mexico will create about 4,500 new jobs, it doesn’t come without sacrifice to the Mexican workforce. Union workers at Ford’s Cuautitlan plant outside of Mexico City currently make about $4.50 an hour, but agreed to a new two-tier wage system — that will see new hires make about half that — in order to secure Fiesta production.

“We agreed to it,” Ford union leader Juan Jose Sosa Arreola told Automotive News. “We need to be more competitive. That’s the truth. That’s a reality.”

Some Mexican auto workers make as little as $1.50, with it taking seven years to work up to what used to be starting wages only a few years ago.

But many analysts now feel that Mexico has a distinct advantage over other cheap labor markets. Mexico is very close to some of the world’s largest auto markets and, over the past few years, has built an extensive network of local suppliers. Between 2004 and 2007, Mexican auto exports climbed 68 percent, totaling 1.6 million units.

But even with that advantage, Mexico’s auto workers aren’t seeing any benefits. Mexican labor laws heavily favor employers over employees, and most unions are limited to specific automakers or plants, unlike the U.S.’ national UAW. And with an abundant workforce and the automakers’ need for cost cutting, it doesn’t look like things will change anytime soon. “Despite the fact that we’re negotiating what you could call a cheaper contract, I guarantee you that if we advertise for 2,000 workers, 10,000 people are going to show up,” said Arreola.

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06/04, 5:52 PM

posted by:

jumpoffit

Viva la Raza !!!

06/04, 6:08 PM

posted by:

F451

And US citizens wonder why there are so many border crossings?

06/04, 6:12 PM

posted by:

VictorRaikkonen

At those wages I am surprised that more of GM and Fords operations have not gone south of the US border.

06/04, 6:46 PM

posted by:

VRAmU

What this article doesnt explain is that the cost of living is a lot less expensive in Mexico, I visit my family in mexico often and have seen little to no inflation in mexico.
A 20oz soda over there cost 70 cents compare to 1.50 here in the U.S…

06/04, 7:10 PM

posted by:

brassmonkey

We are still feeling the effects of Clinton ****ing us 15 years ago. Asshole. Why would the Mexicans care about being laid off? They’ll just come here (we already got 20 million of the little beaners) and work for higher wages, and send it back to Mehico. That wouldn’t be so bad if the little bastards spent that money on US products. **** Ford. **** Canada. **** Mexico.

06/04, 8:31 PM

posted by:

golf4me

This story should be posted on every UAW factory wall.

06/04, 10:31 PM

posted by:

mbgg099

**** Brassmonkey!
I have really been seeing it all in a whole other perspective in the last few months, especially after reading this article, most mexicans are hard workers, there should be stricter laws on minimum wages.

06/04, 10:56 PM

posted by:

NoNameDenton1

Never been a fan of NAFTA, but no hope itwill ever be repealed.

06/04, 11:37 PM

posted by:

400horseSS

Mexicans pimping their own people, WOW, remember this Union hating assholes $36 a day to build your $40k F-150 or Silverado and Avalanche.

06/04, 11:46 PM

posted by:

400horseSS

VRAmU, WTF kinda comment is that, you are a ****ing retard, their is no cost of living in a 3rd world country, you need to play in traffic my friend.

06/05, 7:14 AM

posted by:

Fletch

Not everything is cheaper. Cars are expensive and heavily taxed. Clothes and electronics are more expensive than the US. Housing is cheaper, but wages are quite a bit lower. Engineer’s and managers make $20k – $30k per year in manufacturing.

06/05, 8:59 AM

posted by:

xyunya

Makes me run out and buy inexpensively and shabbily made Mexican Ford over made in Ohio Honda. I am a ****ing traitor according to HemiRetard and 400HorseSS.
Rumors about Mexican pissing in bear designated for export to US are not substantiated.

06/05, 9:12 AM

posted by:

HemiRoadRunner

Ok xyunya, let me try and explain this in a civilized manner. WE, the U.S., do NOT need to constantly try to establish other countries for them. We need to maintain ourselves. Ford establishing 4,500 jobs in mexico is BS. They should be adding jobs here, that doesn’t mean they have to over pay them, that’s why we have this thing called NEGOTIATION. If the unions here can’t settle on a fair wage, hire someone in THIS country that will. BUT, as I’ve said before, I get PISSED that the working guy has to keep settling for less and less while that FAT CEO’s get more and more from LESS work! Let’s keep OUR country prosperous and let people compete with us, the japs seem to be doing it (I can give them that credit even though their cars are over-rated pos’s). I get so tired of the lack of attention to our country’s economy while we focus so much more on what other countries “needs”.

06/05, 9:52 AM

posted by:

Buhbye

Sad days for the USA. We knew this would happen when Clinton pushed NAFTA. He made himself very rich, idle rich, richer than any of the auto executives, who still have to ’show up’ to earn their high salaries.

06/05, 10:08 AM

posted by:

RaineMan

Nice to see that the USA isn’t the only country being sabotaged by NAFTA. This whole economic spiral we are in is going to rebalance a lot of things on a global scale before all is said and done.

06/05, 10:15 AM

posted by:

frylock350

Does either Obama or McCain have elimination of NAFTA as part of their economic plan? Or at least elimination of the Mexican part of it as I’d assume the relationship with Canada is mutually beneficial.

@HHR,
This country is run by profit driven corporate sluts. If its not sending our manufacturing jobs to Mexico, its sending IT to India, etc.

@xyunya,
Buying an American vehicle built in America is my solution. A Ohio-built Honda is no better than a Mexican-built Ford. Sadly GM plans on closing the Janesville plant that built my Suburban. Oh well there’s always Arlington right? I just liked the idea of buying a midwestern-built truck, as I’m a midwesterner myself.

06/05, 11:35 AM

posted by:

shaver

“Agreed” WTF, Im sure they were given a range of options and decided that the best idea would be to lower their wages. FU corporate pigs. I will never buy a car or TV built in MEX.

06/05, 12:54 PM

posted by:

brassmonkey

Mexico is becoming the new China. Lots of stuff manufactured there: Ford cars and trucks, US bound Alfa Romeos (99% chance), the Canadian SkyTrain, and more and more illegals every day. That could be why the quality of the Ford is questionable; most of the beaners are too busy drinking tequila and screwing to make a well built vehicle. Si!

06/05, 5:35 PM

posted by:

1c3d0g

Poor Mexicans…being taken advantage of every damn time. It must really suck to be in that position… :-|

06/05, 5:51 PM

posted by:

NoNameDenton1

Must suck to be taken advantage of by their own government.

06/05, 7:49 PM

posted by:

DeansterTJ

BRassmonkey, you’re a balljuggling dickriding ****eater. Your ****ty little rant wins you no accolades, it basically makes you look like a fat, greasy, Dorito-eating TV-obsessed pasty whitebread American hunk of stupid retarded ****. MExico and China are taking over the US because last I checked, you can’t run a country with the whole population watching TV and getting fat as a house. Capiche asshole?

06/06, 9:36 AM

posted by:

1c3d0g

NoNameDenton1: what do you suggest? That someone take over their Government, Iraq-style? :roll: Sometimes people are forced into a situation they don’t like but can’t do anything about it.

06/07, 10:49 PM

posted by:

NoNameDenton1

1c3d0g, I am not suggesting anything, it is just if you look at the history of Mexico, every government they have had has shafted the people, even when the revolts were led by peasants, they enjoyed their new found wealth and power and shafted their people to retain it.

 
 
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