13 business organizations repudiated the paralysis of a part of the productive assets of the global steel giant ArcelorMittal in Mexico by a group of unionized workers supported by the congressman of the political party in power, Napoleón Gómez Urrutia, during the last 26 days.
“We express our deep concern about the severe impacts that these events represent for the economic stability of the region,” reported a group of business associations from the western Mexican state of Michoacán.
Data from the Mexican System of National Accounts, reviewed by SteelOrbis, show that Michoacán is a small economy with a contribution of 2.7 percent to the National GDP, placing it in position #14.
With constant labor protests that block federal communication routes in the state, in 20 years Michoacán increased its contribution to the National GDP by only 20 basis points.
This increase in GDP in 20 years is well below that achieved by six other states that increased their contribution between 50 and 80 basis points. In the latter case, it is Nuevo León, which went from 7.2 to 8.0 percent.
ArcelorMittal is a “company that serves as an authentic engine of development for our state,” reported 12 business organizations, including the Business Coordinating Council (CCE) of Michoacán, the Mexican Chamber of the Construction Industry (CMIC), the Association Mexican Shipping Agents (AMANAC), among others.
The workers' blockade of a mine and the company's blast furnace facilities in Lázaro Cárdenas, Michoacán began on May 24, to date (June 18) 26 days have accumulated, a period in which they have stopped producing more than 170,000 metric tons (mt) of liquid steel and another similar amount of rod in its plant in Celaya, Guanajuato that consumes what Lázaro Cárdenas produces.
According to a statement to the Reuters news agency, the blockade of workers keeps 300,000 metric tons of steel in Lázaro Cárdenas without movement. This will impact the entire manufacturing and construction industry.
After the initial blockade of workers with red-and-black flags (a strike symbol), the union attempted to turn the work stoppage into a strike. However, a federal labor judge declared the labor movement illegal on June 8.
Separately, the Mexican Chamber of the Iron and Steel Industry (Canacero) said that Napoléon Gómez Urrutia's Mining Union has “unjustified claims that transgress the rule of law.”
In the two press releases, the business organizations call on federal and state authorities to intervene.
SteelOrbis asked the Secretary of Labor (federal) for a position on the ArcelorMittal labor dispute. We will have to wait for the response.
Mexico, the organizations said, must avoid setting precedents that there is a climate of mistrust and uncertainty in the country that damages private investment in Mexico.