Department of Labor, Trade Representative reach agreement with Mexican government to address labor violations at Guanajuato auto parts plant

News Release

WASHINGTON – The U.S. Department of Labor and U.S. Trade Representative today announced an agreement with the government of Mexico on a course of remediation at the Draxton auto parts facility in Irapuato, Guanajuato, in response to the second U.S. self-initiated request for review under the U.S.-Mexico-Canada Agreement’s Rapid Response Labor Mechanism.

The agreement seeks to remedy denials of freedom of association and collective bargaining rights at the Draxton facility, including worker dismissals for engaging in union activity and failure to provide a copy of the collective bargaining agreement prior to a worker vote on revisions to the agreement.

More broadly, the agreement requires the company to establish guidelines that will prevent employer interference in union affairs and safeguard workers’ ability to freely exercise their right of association. Mexico also commits to carry out trainings and periodic inspections at the facility to monitor implementation of the course of remediation and Draxton’s compliance with Mexican law governing freedom of association and collective bargaining rights. The agreed-upon date for completion of the course of remediation is Oct. 31, 2023.

This is the first course of remediation that attempts to establish employer guidelines on separation between union and company functions on important matters, such as the hiring process and financial affairs of the union. To comply with the agreement, Draxton must also reinstate a worker dismissed for engaging in protected union activity to the appropriate position with backpay and benefits required under Mexican law.

The totality of these actions aims to create conditions that ensure workers at the Draxton facility can exercise their labor rights freely.

“The Biden-Harris administration acknowledges the government of Mexico for their continued collaboration in developing comprehensive actions to remediate denial of rights under the Rapid Response Labor Mechanism,” said Deputy Undersecretary for International Affairs Thea Lee. “This course of remediation recognizes the importance of union autonomy as key to effective union representation and seeks to establish clear guidelines that will make that a reality at the facility while serving as a model for other workplaces.”

“This course of remediation requires the reinstatement of a union official who was unlawfully dismissed for advocating for workers and it will help foster a productive workplace,” said U.S. Trade Ambassador Katherine Tai. “The government of Mexico has been an outstanding partner and we look forward to continued collaboration in this case. The United States will closely monitor the plan’s implementation.”

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

Operated by Grupo Industrial Saltillo, the Draxton México, S. de R.L. de C.V., facility in Irapuato, Guanajuato, employs more than 400 union-eligible workers who produce metal pieces that are later manufactured into brakes and crank shafts.

Learn more about the department’s international work.