Strike costs ArcelorMittal Mexico 500,000t in steel output

ArcelorMittal has stopped producing at least 500,000t of steel in southwestern Mexico due to the illegal blockades staged by unionized workers at its facilities in Michoacán state for 33 days, according to company data shared with BNamericas.

The strike began on May 24 due to a disagreement over profit distribution with around 3,000 employees of section 271 of the SNTMMSRM union, out of the 8,000 employees that the Luxembourg-based steelmaker has in the country.

On June 8, a district judge specialized in labor affairs ordered the shelving of two legal proceedings filed by the mining union against ArcelorMittal Las Truchas and ArcelorMittal México, after finding that the workers did not comply with the legal requirements to call the strike.

Víctor Cairo, CEO of ArcelorMittal Mexico, warned that the blockades have caused “million-dollar losses” and that the situation is “quite delicate” because not only are domestic clients in the construction and manufacturing industries affected, but also part of the production goes to the United States, mainly to automotive manufacturers.

Previously, Mexico’s steel chamber Canacero said the blockade by workers at ArcelorMittal facilities affects the value chains of products that the steel company produces in Mexico and the United States.

Cairo has urged the strikers to work with their leaders to understand the reality of the situation, as he alleges that the workers are “asking for something outside the law” by expecting an equivalent PTU (worker profit sharing) payment of 32%.

According to Cairo, ArcelorMittal offered workers a 10% PTU payment, which is above what is required by the new legislation, which capped profit sharing at three months of salary or the average of the payment received in the last three years, whichever is higher. “We offered a higher amount as a special bonus,” he said. “If this continues, there will be no profits next year.”

Cairo stressed that “the rule of law is very important and there must be legality throughout the industry to give peace of mind to investors and not scare away direct foreign investment.”