GM Signs Housing Deal with Mexico's National Housing Authority

06/20/96

In an attempt to soften harsh criticism that its Mexican workers live in substandard conditions, GM cut a deal that may help provide some of those workers low-cost loans for about 6,000 new homes. GM signed an agreement that will cost them about $80 million with the Instituto del Fondo Nacional de la Vivienda para los Trabajadores (INFONAVIT).

The program will allow eligible employees to receive a home loan from INFONAVIT and down payment assistance from GM's Delphi Automotive System's Unit.

GM's deal with the Mexican government comes just as triennial talks with the UAW have started. GM's movement of work to Mexico will be a major bargaining issue during this summer's contract negotiations between GM and the UAW and GM and the International Union of Electronics Workers. The unions want to preserve jobs in the United States, while GM wants to move them to Mexico where they can pay workers much less. When GM closed almost all of their North American plants in response to a UAW strike at two Delphi plants earlier this year, plants in Mexico were among the few they kept open. Compared to the $900 million production loss that GM was willing to take before they settled that strike, $80 million for housing pales.

GM's home program has drawn criticism from social advocacy groups that work to improve conditions for Mexican workers.

"It's fine to talk about housing, but workers in Mexico make about $27 a week," said Sister Susan Mika, director of the San Antonio, Texas-based Coalition for Justice in the Maquiladoras. "It's still not a sustainable wage."

Paul Dever -- The Auto Channel