Goodyear paying $4.2 million in back pay to workers at Mexican plant

AKRON—Goodyear is paying $4.2 million in back wages to about 1,300 workers and former employees at a tire plant in San Luis Potosí, Mexico, in a labor resolution announced this week by the U.S. government.

What the U.S. Department of Labor called a "remediation of denial of workers’ rights" at the plant came as part of a successful application of a rapid-response labor provision of the U.S.-Mexico-Canada-Agreement (USMCA), a trade pact signed by the three countries in 2020.

The Labor Department said in a statement that the U.S. and Mexican governments negotiated the remediation in July 2023 "to help workers who were receiving fewer wages and benefits than they were legally owed."

Mexico and Goodyear "took several actions to address denials of rights that the U.S. found during its investigation into the failure by the company to apply a sector-wide agreement" and to allow workers to elect new union representatives, the Labor Department said.

The company also will "increase payments into an employee savings program and contribute to a social welfare account that workers can use to fund unexpected layoffs and absences, additional vacation days and a larger end-of-year bonus," according to the statement.

Thea Lee, deputy undersecretary for international affairs at the Labor Department, called the resolution "a testament to the power of the USMCA Rapid Response Mechanism and the dedication of the government of Mexico, Goodyear and the tenacious workers at Goodyear that we are seeing these historic outcomes."

The U.S. Ambassador to Mexico, Katherine Tai, in a statement, commended Goodyer "for participating in a good-faith bargaining process with workers at this facility. We hope this case provides a model to other companies, including in the rubber sector, and that the sector-wide agreement will be enforced at other facilities across the rubber industry.”

The San Luis Potosí facility employs about 1,150 union-eligible workers who produce rubber tires.

The USMCA's Rapid Response Labor Mechanism allows the U.S. to take enforcement action based on the labor situation at an individual factory in Mexico if that facility fails to comply with domestic freedom of association and collective bargaining laws.