In the self-proclaimed “Mexican labor spring,” the Mexican government, through the Ministry of Labor, testified to the agreement between the Mining Union headed by Congressman Napoleón Gómez Urrutia and the Mexican unit of the steel giant ArcelorMittal to review whether the distribution of profits from the years 2021 to 2023 was correct.
They are “audit processes to define whether the payment of profits demanded by the working party (mining union) and that caused the work stoppage (of 57 days) was correct,” with that review, the Ministry of Labor said in a statement. press is “to avoid new conflicts that lead to a stoppage of activities.”
The review of the financial statements will be done through an accounting firm endorsed by the Ministry of Labor.
The signing of the agreement was made almost a month after what ArcelorMittal called “illegal blockade”. The blockade from May 24 to July 19 (two days more than the Mexican government recognizes) generated a deterioration of $400 million in the company's Ebitda and the loss of production of around 800,000 tons of steel.
Data from Inegi show that steel production in Mexico registered the worst annual decline in Mexican corporate history with 60.0 percent.
Days before the blockade ended, ArcelorMittal Mexico reported in a paid advertisement in some Mexican newspapers that the company and the community “have been plunged into an unprecedented crisis due to the illegal strike carried out by the Mining Union. Lasting 54 days, this blockade has left a trail of economic and social destruction that cannot be ignored.”
However, the Mexican government, through the Ministry of Labor, said that the labor conflict at ArcelorMittal Mexico was resolved because there is a “labor spring that Mexico is experiencing,” due to the 2019 labor reform, “social dialogue has been promoted like never before, union democracy and collective bargaining”.
With the accounting audit, if there are differences in favor of the workers, the company must pay.
With the blockade, the blast furnace will take two months to restart operations (after the first half of September). Despite this potential damage to the blast furnace, ArcelorMittal agreed to pay its workers bonuses of MXN 60,000 ($3,250) for returning to work, a food voucher bonus of MXN 17,000 ($920), an 8.0 percent increase in salary.
Furthermore, as reported by the Mining Union, something historic in Mexico, it managed to get ArcelorMittal to pay 100 percent of the wages lost from the 57 days of blockade to the more than 3,000 unionized workers.
The agreement for the review of the financial statements of ArcelorMittal México was signed by the CEO of ArcelorMittal México and ArcelorMittal Las Truchas, Víctor Martínez-Cairo Gutiérrez, and by the general secretary of the National Union of Mining, Metallurgical, Steel and Similar Workers of the Mexican Republic, Napoleón Gómez Urrutia.
ArcelorMittal México is the largest steel company in the country with a production of 3.9 million metric tons (mt) of raw steel and a production of 4.5 million mt of iron ore in 2023. In addition, it produces rod, wire rod, wire, slab, billet, bars, tubes and rolled steel plates.