Strike at ArcelorMittal steel plant in Michoacán ends after 55 days

After a grueling 55-day strike, nearly 3,000 ArcelorMittal Mexico workers returned to work at the company’s steel plant in Lázaro Cárdenas, Michoacán, over the weekend.

An agreement brokered by the Ministry of Labour and Social Affairs (STPS) led to the plant restarting operations at midnight on Friday evening, which is expected to have a positive impact on related industries and the economy as a whole.

Workers from Section 271 of the Miners’ Union had been blocking the steel plant’s facilities since May 28, initially out of dissatisfaction with profit-sharing payments.

ArcelorMittal, based in Luxembourg, operates six plants in three Mexican ports and has a capacity of 6.5 million tonnes per year. In addition, the company operates three iron ore mines in Mexico: El Volcán in Sonora, Las Truchas in Michoacán and Peña Colorada in Colima, the latter in a joint venture with Ternium SA.

The agreement, reached on Thursday through mediation by the STPS in collaboration with the Federal Center for Conciliation and Labor Registration (CFCRL), provides for an 8% wage increase, food vouchers worth 17,000 pesos ($949) and full compensation for lost wages.

In addition, an external audit of the fiscal years 2022 and 2023 will be conducted to ensure the accuracy of PTU payments.

Levantan huelga en Arcelormittalhttps://t.co/ZMvgJ87sqI PIC.TWITTER.COM/RNZA1BNJJU

– Quadratín Michoacán (@Quadratin_) June 15, 2024

ArcelorMittal steelworkers went on strike in Lázaro Cárdenas, Michoacán, earlier this month.

ArcelorMittal and STPS both reported that the proposal to end the strike was accepted by a majority of Section 271 of the National Union of Mining, Metallurgy, Steel and Similar Workers of the Mexican Republic (SNTMMSRM) in Michoacán.

Nevertheless, some union members preferred to continue blocking the plant even after the ratification vote, BNamericas reported.

“Unfortunately, a group of dissidents has decided to continue the illegal blockade with acts of violence, endangering the safety of those present and the population of the Lázaro Cárdenas municipality,” ArcelorMittal said in a statement.

The last blockade was finally lifted and after ensuring that health and safety conditions were met, workers began preparing the furnaces and other equipment for resumption of operations.

Earlier this month, a federal labor judge declared the strike, after which the company announced that it was already in the process of laying off union members for the reason.

ArcelorMittal estimated losses in its steel production at one million tonnes: 800,000 tonnes during the shutdown and an expected loss of another 200,000 tonnes during restart.

“Order cancellations and customer losses have been very severe,” the company said in a statement. “It will be difficult to revive the market.”

The agreement provides that the company will settle any outstanding amounts in favor of the employees within 20 working days after the completion of the audit.

CEO Víctor Cairo called on workers to reconsider their demands during the strike and stressed that ArcelorMittal has complied with the legal provisions regarding PTU payments. He noted that the expectation of a 32% PTU payment was not in line with the law and that the company’s proposal to demand a 10% PTU payment exceeded the current legal limits.

Governor Alfredo Ramírez Bedolla welcomed the reopening of the plant, pointing out that ArcelorMittal is a key player in the state’s export business and the most important company in Lázaro Cárdenas, a port city of 84,000 inhabitants in western Michoacán.

The agreement also includes ArcelorMittal’s commitment to avoid any reprisals against employees and to stop proceedings to terminate individual and collective employment relationships.

With reports from The Daily, Forbes, The Universal, BN America And Business news from Mexico