Mexican Ambassador |
Kia Motors' announcement last August that it will build its first overseas assembly plant in the northern Mexican state of Nuevo Leon created worries that the country will start losing manufacturing jobs.
In response to the negative public sentiment, the automaker explained that the $1 billion overseas investment decision was inevitable. It said higher wages and lost working days caused by militant labor unions in Korea were some of the key drivers behind their decision to build overseas plant.
In recent years, Mexico has become an attractive manufacturing hub for global automakers, including General Motors, Toyota and Volkswagen, which have invested or expanded their investments in Mexico to produce automobiles there.
The country's free trade pacts with many countries, including the United States and Canada, give automakers duty-free access to these key global markets.
In Korea, labor unions go on strikes if their negotiations with employers to improve wages and working conditions fail. Strikes lead to lost work days and consequently, lost productivity and sales.
Analysts in Korea say labor costs in Mexico are nearly 20 percent cheaper than in the United States. In addition, unions there are cooperative.
Mexican Ambassador to Korea Jose Luis Bernal said workers and employers strive to find a mutually beneficial solution to disputes, and this stable labor-management relations is the result of decades of cooperation.
"Since Mexico signed the North American Free Trade Agreement with the United States and Canada in 1994, employment has risen every year all across the country," the envoy said on April 6 after the Mexican Automotive Industry Investment Seminar at the KINTEX, held on the sidelines of Seoul Motor Show in the northwestern city of Ilsan.
"In the past, many people in the north-central state of Zacatecas, for example, used to migrate to the United States for jobs. But now, they are coming back to Mexico because of the increasing employment opportunities as a result of the booming auto industry."
The Mexican envoy said the visible progress in living standards and working conditions in the past decades could be direct benefits from the booming economy.
"The tripartite organization that we have plays a role in resolving disputes. There are also plenty of local authorities responsible for resolving labor--management disputes. These organizations are working quite well."
Coahuila State Gov. Roben Moreira noted that the northeastern state has been strike-free for the past 23 years, promoting it as a business-friendly state.
"In our state, there are several committees and agencies that are working to resolve labor-management disputes," the governor said through an interpreter. "For example, we have a committee handling workplace safety and sanitation and members there are working to improve the workers' welfare and safety conditions. They visit workplaces on a regular basis to check whether they provide a safe and clean environment for their employees."
Moreira also said precautionary measures and policy support to improve the public's living standards help resolve labor-management disputes.
Win-win approach
In Mexico, he said, most education and medical services are financed by public expenditure, so the public has easy access to those services. He also said labor unions' participation in their companies' key decisions makes them feel heard.
"We have wonderful relationships with labor unions. I am traveling to Korea with two labor union leaders from our state to show the strong partnership between unions and companies."
Tereso Medina Ramirez, secretary-general of the federation of labor unions of Coahuila, was one of the two labor union leaders Gov. Moreira mentioned.
Medina said labor unions see employers as partners, not enemies they have to fight to improve their salary and working conditions. Some 25 years ago, he said, the two sides agreed about the need for working industrial relations and the view that no one will benefit if disputes are not resolved. "Unions also learned that disputes with employers or with fellow unions do not help," he said.
Medina lauded Moreira for his role behind the establishment of strong industrial relations. "Governor Moreira has been great at drawing consensus among the related sides," he said. "Governor also organizes frequent meetings among the labor, workers and the government and the media to facilitate communication among them and improve their understanding of each other, according to the union leader.