November 10, 2023
No Relief for ULT Workers in Mexico Amidst Legal Battle
Federal judge's resolution on unpaid wages, severance and access to retirement funds still many months away
In March 2023, Universal Lighting Technologies (ULT) and Douglas Lighting Controls, under the helm of private equity firm, Atar Capital, unexpectedly ceased operations in multiple locations, including a significant factory in Mexico1. This abrupt shutdown left hundreds of workers from Componentes Universales de Matamoros, a ULT subsidiary, without employment or the income they depended on to support their families2. Many of these workers had dedicated over three decades of their lives to the company, only to find themselves in a precarious situation with no prior warning or severance pay which is a requirement under Mexican law2.
Last month, Inside Lighting reported that Signify, the global leader in lighting, acquired certain assets of ULT and Douglas Lighting Controls. Among four companies vying for Universal Douglas assets, Signify emerged as the successful bidder. However, none of the offers extended to the property at the Mexican factory, which has been embroiled in a labor dispute that deterred acquisition suitors.
The ongoing labor issues at Componentes Universales de Matamoros led to several potential buyers withdrawing their interest, particularly due to concerns about accessing former employees of Universal Douglas subsidiaries and the inaccessibility of inventory stored at the Mexican facility.
Reports from sources familiar with the situation reveal that laid-off workers are staying on the outskirts of the property. They are ensuring that factory assets such as machinery, finished goods, and components remain inside. This action is taken so that the assets can be properly liquidated, potentially channeling funds to the workers. This is as local union officials, former employees and government representatives continue working to resolve the details of this standoff.
Worker hardships
The factory's closure has inflicted substantial hardships on the workers, as reported by Antonio H. Mandujano of Expresso Press2. With no access to severance pay or their retirement funds, the workers face a bleak future3. Alicia Garza, a former employee, along with her colleagues, sought intervention from Governor Américo Villarreal Anaya for support in receiving their due payments2. However, they still await clear answers or assistance nearly eight months post-closure.
As of late October, the plight of these workers remains unresolved. Angélica Maldonado, head of the Tamaulipas State Labor Center, indicated that the workers might have to wait at least seven more months for a federal judge to issue a final resolution on the case4,5,6. The situation has evolved into a legal battle, with workers desperately clinging onto hope outside the factory premises, safeguarding the machinery and raw materials inside, which they hope will ensure the payment of their final dues5,6.
U.S. Companies reportedly not forced to comply with certain Mexican labor laws
This saga is not just a local issue but also raises broader questions about labor laws and corporate responsibilities in the context of international trade agreements. Hector Miguel Treviño Duran from Coparmex highlighted a significant gap in the Free Trade Treaty, where foreign entrepreneurs are not mandated to comply with certain Mexican labor laws that govern situations such as this one7. This legal vacuum leaves the workers of Componentes Universales de Matamoros in a precarious position, with their fate hinging on the outcomes of drawn-out legal proceedings7.
As this saga unfolds, it exposes the vulnerability of workers in the globalized economy and the limitations of existing legal frameworks in safeguarding their rights. The workers of Matamoros continue their struggle, not just for their dues but also for recognition and respect from a U.S.-based private equity firm, as well as within a system that has seemingly overlooked their decades of dedication and service.
Sources:
1Inside Lighting (June 19, 2023)
2Expresso Press (June 12, 2023)
3El Bravo (October 9, 2023)
4La Tarde (October 10, 2023)
5MexNoticias (October 17, 2023)
6iNoticias MX (October 17, 2023)
7EnlaceMx Noticias (October 17, 2023)
