Update: Pirelli responds to U.S. request for labor review at Mexican plant

NEW YORK—Pirelli North America said it has maintained an "ongoing, open and good faith dialogue with workers and the recognized union" at the Pirelli Neumaticos S.A. de C.V. tire plant in Silao de la Victoria, Mexico, and that the tire maker has "consistently respected the right to collective bargaining."

The comments are in response to a request from U.S. Trade Representative Katherine Tai to Mexico, asking that country officials review whether workers at the plant are being denied the right to freedom of association and collective bargaining. 

The U.S. has suspended liquidation of tariffs on goods from the Pirelli facility. The request, made in response to a petition, marks the 26th time the U.S. government has formally invoked the Rapid Response Labor Mechanism (RRM) in the United States-Mexico-Canada Agreement (USMCA).

Pirelli said that the company and union signed an "agreement of harmonization of benefits" on Aug. 1, which it said was mediated and approved by the Federal Center for Labor Conciliation and Registration.

"Pirelli has always acted in full compliance with Mexican labor legislation and international labor standards, respecting freedom of association and collective bargaining, strictly adhering to the requirements dictated by labor authorities and maintaining an ongoing, open and good faith dialogue with workers and the recognized union," the company said in its statement to Tire Business.

"Since September 2023, the company has been in negotiations with the union to harmonize the current collective bargaining agreement with the benefits contained in the Rubber Industry Law Contract as means to remain competitive in the industry. 

"Throughout this process, the company (has) consistently respected the right to collective bargaining."

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

“As the second Rapid Response Mechanism matter dealing with Mexico’s sector-wide agreement for the rubber industry, this case demonstrates that the tool is raising awareness among workers in the sector about their labor rights and providing a pathway for their concerns to be addressed,” Tai said.

“The request for review in this case provides an opportunity under the Rapid Response Labor Mechanism for Pirelli workers to benefit from the application of the rubber sector-wide agreement, consistent with Mexican labor law,” said Deputy Undersecretary for International Affairs Thea Lee. 

On July 23, the Interagency Labor Committee for Monitoring and Enforcement (ILC) received an RRM petition from the United Steelworkers (USW), the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), La Liga Sindical Obrera Mexicana (LSOM) and International Lawyers Assisting Workers Network.  

The petition alleges Pirelli is not applying the sectorwide agreement covering the rubber manufacturing industry at the facility and is instead applying a singular collective-bargaining agreement with  inferior benefits.   

The ILC determined there is sufficient, credible evidence of a denial of rights enabling the good faith invocation of enforcement mechanisms. As a result, the U.S. Trade Representative has submitted a request to Mexico that Mexico review whether workers at the Pirelli facility are being denied the right to freedom of association and collective bargaining.  

Mexico has 10 days to agree to conduct a review and, if it agrees, 45 days to complete the review.

Pirelli opened the Mexico plant in 2012, which has capacity to produce 8.5 million high-performance tires annually for cars, electric vehicles, SUVs and light trucks in the North American market.

It was just a year ago August that workers at Goodyear's tire factory in San Luis Potosi, Mexico, voted to be represented by the Independent Union of Goodyear Tire Workers, a trade union affiliated with the LSOM.

The election came after months of squabbling between company management and the workers and an unfair labor complaint against Goodyear and a favorable decision from the U.S. Department of Labor.

Similar to the current Pirelli plant complaint, the LSOM participated in a complaint against Goodyear under the Rapid Response Labor Mechanism.

The U.S. Department of Labor and the U.S. Trade Representative ruled for the Goodyear workers July 19, 2023, and gave Goodyear specified mandates for moving forward with the union vote.