United States announces successful resolution of rapid response labor mechanism matter at Volkswagen de México facility

The United States today announced the successful resolution of the United States-Mexico- Canada Agreement (USMCA) facility-specific Rapid Response Labor Mechanism (RRM) matter regarding the Volkswagen de México facility in the state of Puebla, where workers alleged they were previously denied their freedom of association and collective bargaining rights. In July 2024, the United States and Mexico agreed on a holistic plan to ensure workers’ rights are protected at the facility. That plan has now been implemented. As a result, the Office of the United States Trade Representative (USTR) has directed the Secretary of the Treasury to resume liquidation of unliquidated entries of goods from the facility.

“Today’s resolution marks the twenty-first case the United States and Mexico have successfully resolved under the RRM. Through this case, workers at Mexico’s largest automobile manufacturing plant have been reassured they can exercise their freedom of association and collective bargaining rights freely,” said Ambassador Katherine Tai. “We commend the Government of Mexico and Volkswagen de México’s efforts to strengthen labor protections at the facility.”

“The U.S. and Mexican governments have collaborated to assure workers’ fundamental rights to organize and bargain collectively,” said Deputy Undersecretary for International Labor Affairs Thea Lee. “Volkswagen’s efforts under this course of remediation underscore its commitment to compliance with Mexican law and a just working environment.”

Actions taken by the facility to address the matter include:

• Reinstating and providing full backpay and benefits to eight workers;
• Paying full severance to one worker who elected severance over reinstatement;
• Posting, disseminating, and implementing its neutrality statement and company guidelines on freedom of association and collective bargaining, including a zero-tolerance policy for violations;
• Providing training to company personnel on its neutrality statement and guidelines;
• Maintaining copies of the neutrality statement, company guidelines, related training materials, and collective bargaining agreement, and information about how workers can file complaints with the company or Government of Mexico related to violations of their rights, on a company app that is accessible to workers; and
• Publicizing its anonymous and confidential telephone line or direct email address through which workers can report violations of their rights and breaches of company policies, as well as information on how workers can file complaints with the Government of Mexico related to violations of their rights.

Actions taken by the Government of Mexico to address the matter include:

• Conducting in-person workers’ rights training for company personnel and posting and distributing informational material at the facility regarding freedom of association and collective bargaining;
• Monitoring the facility related to the obligations of the course of remediation and compliance with Mexican laws related to freedom of association and collective bargaining; and
• Maintaining a direct email address and telephone line for workers to anonymously report any potential acts of unlawful interference or other violations of workers’ freedom of association and collective bargaining rights.

Background

The United States has formally invoked the RRM twenty-six times. The United States Trade Representative and the Secretary of Labor co-chair the Interagency Labor Committee for Monitoring and Enforcement (ILC). On April 25, 2024, the ILC received an RRM petition from a group of former Volkswagen de México workers. The petition alleged Volkswagen de México dismissed these workers in retaliation for union activity they conducted while serving as union representatives. The ILC reviews RRM petitions that it receives, and the accompanying information, within 30 days.

The ILC determined that there was sufficient, credible evidence of a denial of rights enabling the good faith invocation of enforcement mechanisms. As a result, on May 28, 2024, the United States submitted a request to the Government of Mexico that it conduct its own review of all actions taken by the company to intervene in workers’ union activities and the affairs of the incumbent union, as well as all actions taken by the union that discriminate among workers based on their union activities. Mexico agreed to conduct a review. On July 25, 2024, following Mexico’s investigation, the United States and Mexico agreed on a course of remediation.