Michoacan industrialists fear 'enormous economic repercussions' due to strike at ArcelorMittal plant

Industrialists in Mexico's Michoacán state, where steelmaker ArcelorMittal's operations have been paralyzed due to an illegal strike, are worried about economic consequences and private investment if the dispute continues, which is why they called on the union to end it.

“As an association of state industrialists, we are concerned about the loss, above all, of these 8,000 direct and 50,000 indirect jobs. This can lead to instability in the state, since more than 58,000 families are affected,” David Martínez, president of the state's industrialists association AIEMAC, told BNamericas.

"We are talking about families, not jobs. And this can have enormous economic repercussions for the state and, in addition, the risk that international and local investors who are turning toward the state of Michoacán to see it as a great option to invest, will not generate the confidence to approach it," added the engineer.

ArcelorMittal has stopped producing at least 500,000t of steel in southwestern Mexico due to the strike that started over a month ago by members of section 271 of the SNTMMSRM union, according to company data shared with BNamericas.

“The impact that Arcelor is having of 500,000t is mainly affecting the sectors and clients it has, which are automotive, household appliances and construction, since Arcelor is a distributor of 30% of the steel in Mexico,” Martínez said.

Although Martínez does not have information on stoppages of production lines due to supply failures by ArcelorMittal, he said the potential for such situations is also a concern.

The interest the state generated within the framework of nearshoring among investors could be “directly affected” due to this loss of trust, lack of certainty and the rule of law, he said.

Martínez invited the union members involved in the conflict to lift the strike, which began on May 24 due to a disagreement over the distribution of profits among some 3,000 union members, out of 8,000 that are part of the company in the country..

On June 8, a district judge specialized in labor issues dismissed two proceedings filed by SNTMMSRM against ArcelorMittal Las Truchas and ArcelorMittal México after finding that the workers did not comply with the legal requirements to call the strike.