From the Production Floor to the Negotiating Table: The Other Side of the USMCA Wage Debate

In the first installment of this investigation, Armando Gómez de la Torre, Vice President of Tachi-S Mexico and Latin America, described the scenario from the vantage point of corporate leadership: strategy, supply chains, rules of origin, tariff pressure, and a warning that few in the industry dare to voice – that automation represents a greater risk to employment than any wage adjustment. That portrait was necessary to understand the macro dimensions of the problem. But the debate over wages under the USMCA does not occur solely in boardrooms or at diplomatic negotiation tables. It also takes place on manufacturing floors where women of all ages, some with more than thirty years of tenure, sew and assemble the upholstery that ultimately covers the seats of vehicles exported to the United States.

For this second installment, the investigation descends one level in Tachi-S’s organizational structure and speaks with Adrián López Rubio, Operations Subdirector for Trim Cover, responsible for three plants in Mexico: one in Ojocaliente, Zacatecas; another in the Santa Clara Industrial Park in Gómez Palacio, Durango; and a third in the Piba Industrial Park in Aguascalientes. His trajectory is that of someone who grew within the company: eleven years in Zacatecas, starting as assistant production chief, climbing to plant manager, and a year and a half ago assuming his current role with responsibility for production, quality, maintenance, human resources, and accounting across the three facilities.

From this position, the conversation about the USMCA and wages takes on a different texture.

Inside the Plants: Who are Trim Cover’s Workers?

The production process of the Trim Cover Division is, in essence, the transformation of fabrics, vinyl, and leather into the covers that adorn automotive seats. Lamination, cutting, sewing: three stages requiring precision, repetition, and, above all, hands. Those hands, in the plants managed by López Rubio, belong predominantly to women.

“In the Trim Cover plants, the majority of the people are women,” confirms the subdirector, noting that this proportion is particularly pronounced in the sewing processes. The workforce profile is broad: there are operators who have decades with the company, individuals approaching 60 years old who joined when Tachi-S arrived in Aguascalientes over thirty years ago, and young workers beginning their careers on the production lines.

An indicator that López Rubio mentions naturally, but which is revealing in the context of the wage debate, is labor turnover: below 2% this year. In a sector where mobility between companies is frequent and where salary is often the primary trigger for resignations, that number suggests that something beyond income keeps people in their positions.

Inside the Plants: Who are Trim Cover’s Workers?

The company has developed retention activities that go beyond financial compensation. López Rubio describes executive breakfasts with operators where the starting question is what are the five reasons they remain at Tachi-S. The answers they receive do not revolve around money: stability, opportunities for growth within the structure, work environment, and the fact that payments are never delayed or irregular.

“Salaries might definitely be better elsewhere, but I believe everything matters. If you are well in a place, if you are happy, if you are at peace, if you have opportunities to grow, you will hardly change jobs,” reflects the subdirector.

This observation is significant. The political debate surrounding the USMCA review tends to reduce labor well-being to a single figure: the hourly wage. From inside the plant, that equation appears incomplete.

The Minimum Wage, Increases, and Daily Reality

Regarding the impact of minimum wage increases in recent years, López Rubio’s response is direct: the company has not suffered severe repercussions because its salaries have always been above the legal minimum. Adjustments have been necessary at certain levels, but they have not represented an operational crisis.

Researcher Sandra Polaski, in her analysis of the need for a “second floor” of labor income in Mexico, documents that between 2019 and 2025, the general minimum wage grew 111.9% cumulatively, while the average wage grew only 26.7% in real terms. This gap, Polaski points out, is an indication that the benefits of wage policy have been concentrated at the lowest end of the distribution and have not permeated to the middle segments of the workforce.

When asked if the Trim Division’s wages are sufficient to cover the basic needs of its workers, López Rubio’s response is cautious but affirmative: “As for basic needs, yes, I believe they are covered. Is it enough? Well, everyone always tends to want more. But in the strict sense of basic needs, I believe so.”

However, the subdirector acknowledges a clear limit to his own knowledge: he does not have comparative data on what other plants in the region pay. What he does have is the turnover indicator as an indirect thermometer. If wages were unsatisfactory, he argues, people would be looking for other options.

Wage Parity with the United States: Possible, Distant, and Without a Plan

The question that generates the most discomfort in the conversation is not about the minimum wage increases that have already occurred, but about those that might come. What would happen if the USMCA imposed real wage convergence between the three countries?

López Rubio is honest: no one at Tachi-S yet has a strategy for that scenario. The topic is discussed in board meetings when communications or openings about negotiations arise, but not as a certainty, rather as a possibility. There are no concrete plans.

“The impact, well, there will definitely be a significant impact on the company’s economy. Honestly, I still have no idea how we could face it to remain a viable option and a profitable company,” admits the subdirector.

His analysis of the scenario is pragmatic: if the final result of wage increases is that the company can no longer sustain itself and has to close, the supposed benefit for the worker becomes their worst nightmare. “From receiving, let’s say a number 15, and the company survives, to receiving 16 and the company no longer survives, that’s when all these factors start to come into play.”

Wage Parity with the United States: Possible, Distant, and Without a Plan

Therefore, the subdirector’s position is not one of rejection of wage increases but of demanding gradualism: any adjustment of that magnitude would have to be phased in, with sufficient time for companies to develop adaptation strategies.

Polaski, from her academic analysis, reaches a similar conclusion, albeit from a different angle: she proposes that Mexico build a “second floor” for wages in exporting sectors, requiring that workers in exporting companies receive wages equivalent to at least 2.5 basic baskets, a goal that the general minimum wage should reach by 2030. Given that exporting sectors have higher productivity and profitability, there is a solid justification for them to lead wage growth before the rest of the economy.

Pressure on Two Fronts: USMCA and Labor Reform in the Same Plant

The USMCA wage debate does not reach manufacturing plants as a diplomatic abstraction. It arrives through concrete mechanisms already in operation and domestic reforms advancing in parallel, often without the workers themselves knowing they are connected.

The first is the Rapid Response Labor Mechanism (RRLM), a tool introduced in the USMCA that allows the United States and Canada to act directly against facilities in Mexico when there are indications of violations of freedom of association or collective bargaining. Since 2021, the mechanism has been activated 37 times, with a resolution rate close to 71%. Concrete results for workers have included retroactive payments, reinstatements, and direct wage increases, primarily in the automotive sector, which accounts for 61% of cases.

However, the mechanism operates almost unilaterally: Mexico’s ability to invoke it against facilities in the United States or Canada is severely restricted by much more demanding evidentiary thresholds. COMEXI has indicated that the 2026 review is an opportunity to correct this asymmetry and ensure that the mechanism functions symmetrically for all three countries.

Pressure on Two Fronts: USMCA and Labor Reform in the Same Plant

The second front is domestic but equally urgent. The 2019 labor reform was partly a condition that the United States demanded to sign the USMCA, and its implementation remains incomplete nationally. The reduction of the workday, the next pending transformation, has not yet taken effect but already generates operational concern in the plants. López Rubio acknowledges this without hesitation: “Honestly, we are visualizing it; we haven’t yet figured out how we’re going to resolve it.” His view is that the solution will involve becoming more productive, improving lines, and innovating.

What both fronts share is direction: both the USMCA and internal labor policy push towards better working conditions and greater negotiating power for employees. The difference lies in the origin of the pressure and the timing. The treaty acts from the outside with sanctioning mechanisms; the reform acts from the inside with legislative deadlines. For companies, managing both simultaneously without losing competitiveness is the real challenge of the coming years.

Automation and Innovation: The USMCA Also Demands Technological Transition

In the first installment, Gómez de la Torre identified automation as the most underestimated threat in the public debate. López Rubio confirms this perspective from operations, but with an important nuance: to date, technology has not displaced workers at Trim Cover. It has facilitated their work, but not replaced them.

Tachi-S’s global strategy in this regard, named TVE (Transformative Value Evolution), encompasses three axes: deepening current processes, renewing equipment and methodologies, and innovation. In practice, self-guided vehicles (AGVs and AMRs) are already used for material transport between processes, and digital systems capture real-time production data. “Even with innovations, we have not yet reached the point of dispensing with human labor,” states López Rubio.

Automation and Innovation: The USMCA Also Demands Technological Transition

This transition does not occur in isolation. The USMCA review contemplates the expansion of Chapter 19 on digital trade, which in its current version already establishes frameworks for cross-border data flows, cybersecurity, and privacy protection. COMEXI proposes that the 2026 review is an opportunity to more precisely incorporate topics of artificial intelligence, regulatory interoperability, and digital talent, creating a North American region competitive in innovation. For the manufacturing industry, this agenda is not foreign: the digitalization of production processes is part of the same route that the treaty seeks to accelerate.

The latent breaking point remains labor cost. If wage increases accelerate without being accompanied by productivity policies, business logic may shift towards automating tasks that are currently profitable with human labor. What Tachi-S’s experience shows, for now, is that digitalization does not necessarily equate to layoffs, but rather to redirection: technology can free workers from the most routine tasks so they can focus on those requiring judgment and supervision. That balance, however, depends on the pace of changes, both in the treaty and in wage policy, allowing companies to adapt without disruptions.

Mexico’s Stance and Its Two Possible Scenarios

While the industry internally prepares for various contingencies, the Mexican government has outlined a public position at the negotiation table. Secretary of Economy Marcelo Ebrard declared in May 2026 that the labor issue will not be a substantive element in this renegotiation, that the USMCA already includes complex rules of origin and an existing labor mechanism, and that Mexico will not accept the imposition of a general wage as a negotiation condition.

That declaration is, for now, Mexico’s objective at the table, not a confirmed outcome. The response from the United States and Canada to this stance is the variable that will define the real course of negotiations, and at this moment, it remains open.

Two scenarios are equally plausible.

In the first, Washington agrees to frame labor demands within existing mechanisms, primarily the Labor Value Content (LVC) rule and the Rapid Response Labor Mechanism (RRLM), without adding new wage conditions. Under this scenario, Mexico retains room to manage its own increases at a pace the economy can absorb, as has occurred since 2019.

In the second scenario, Mexico’s refusal becomes a point of friction that the United States uses as leverage to pressure on other fronts: energy, genetically modified corn, rules of origin in the automotive sector. Trade Representative Jamieson Greer has indicated that talks with Mexico are progressing constructively but without concrete commitments. This ambiguity leaves room for both outcomes.

Ebrard, for his part, was explicit about the process timelines in the same forum where he dismissed wage imposition: “We will probably go into reviews that are inconclusive for the next 10 years,” he anticipated. This scenario of annual reviews until 2036 has already been identified by researcher Gobea Franco as the most probable outcome in the absence of a long-term agreement, and one that would introduce constant uncertainty in investment planning and supply chains.

Faced with this panorama, COMEXI has put forth a stance that combines defense of Mexican interests with proposals for genuine modernization. Its first recommendation is to preserve the trilateral character of the agreement: any attempt to bilateralize negotiations weakens Mexico’s ability to influence the agenda and opens the door to conditions linked to the rivalry between the United States and China being imposed.

Regarding origin and compliance, COMEXI proposes establishing clear and verifiable criteria with digitized processes, incorporating a roadmap for the integration of batteries and semiconductors produced in the region, and technically reviewing rules as technology evolves. The organization also warns that Mexico must project itself as a stabilizing and reliable partner, capable of maintaining the legal certainty that production chains require.

From a labor perspective, Polaski’s proposal for a sector-differentiated second wage floor offers a route that could simultaneously respond to external pressures and internal needs: gradually raise wages in exporting sectors, link this improvement to the real productivity of each sector, and require companies receiving fiscal incentives from the Plan Mexico to formally comply with existing labor obligations.

The Message the Plant Sends to the National Debate

López Rubio closes the conversation with an observation that summarizes the spirit of this installment. The public discussion around the USMCA, he points out, focuses too much on wages and overlooks conditions that for the worker may be equal to or more important: safety in their community, access to quality healthcare, the possibility of growing within a company. None of these elements depend on how much the company pays; they are state responsibilities that cannot be substituted with a salary increase.

His recommendation to the government is consistent with this view: “The best thing the government could do is listen to companies. That if decisions need to be made, they should be made jointly for the benefit of all. That it should not be a unilateral decision.”

This request for inclusion, which Gómez de la Torre also made in the first installment by noting that Tachi-S has not been consulted in the USMCA negotiations, points to a systematic absence: the voice of those operating the plants is not present in the spaces where the future of the treaty is decided. In a process that will directly affect the jobs, wages, and working conditions of millions of people, this absence is not a minor detail.

The third and final installment of this investigation will seek to complete the picture from the perspective that has not yet had its say: that of the manufacturing worker who lives daily the gap between the minimum wage, the cost of living, and the demands of a treaty about which, as Adrián López Rubio himself documented, “what it implies and what is at stake is not very permeated in society.”

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From the Production Floor to the Negotiating Table: The Other Side of the USMCA Wage Debate