US Labor Dept 'disappointed' by VU Manufacturing plant closure in Mexico

By Daina Beth Solomon

MEXICO CITY (Reuters) - The U.S. Department of Labor said on Tuesday it is disappointed by the closure of VU Manufacturing's facility in the northern Mexican city of Piedras Negras, which it said failed to adhere to a labor rights remediation plan under a regional trade pact.

VU Manufacturing, a small car upholstery factory, came under scrutiny for alleged violations twice under the 2020 United States-Mexico-Canada Agreement (USMCA), which has tougher rules than its predecessor, NAFTA, regarding protecting the right of workers to form unions.

The case marks the first time the U.S. has rebuked a company for failing to meet its commitments following a USMCA labor probe, in contrast to 13 other workplaces that have also come under review in Mexico.

In March, the U.S. and Mexico pledged to oversee VU Manufacturing carry out a series of commitments to remain neutral in union affairs and allow workers to freely organize.

"Unfortunately, the company undermined the majority union's ability to represent workers in collective bargaining negotiations and their right to strike," said Thea Lee, U.S. deputy undersecretary of labor for international affairs, in a statement.

"We note with disappointment VU's decision to close its facility without adhering to the agreed course of remediation."

VU Manufacturing, an unlisted company based in Michigan, did not immediately respond to a request for comment.

Lee said U.S. officials had anticipated that "employers would not choose compliance in every instance," but that other USMCA complaints have largely benefited workers.

The Department of Labor urged Mexico to prevent retaliation against former VU workers as they seek new jobs, and to ensure VU makes timely payments to dismissed workers.

(Reporting by Daina Beth Solomon in Mexico City; Editing by Kylie Madry and Matthew Lewis)