MT Arcelor Mittal New

By Anthony Harrup

MEXICO CITY -- A strike at the Mexican plants of steel maker ArcelorMittal is causing lost production of between 8,500 and 10,000 metric tons of steel per day, the company said.

Members of the Mexican Mining and Metal Workers union went on strike Friday and began picketing the steel mills at Lázaro Cárdenas on Mexico's Pacific coast, alleging "multiple violations" of its collective contract. Mexican labor authorities ruled that the strike was illegal, but the union went ahead with the action saying that it follows months of talks with the company seeking to address union complaints.

"The effects of this illegal blockade are already being felt," ArcelorMittal said in a statement. With the loss of 8,500 to 10,000 metric tons of steel production a day, "we run the significant risk losing customers because of the uncertainty, placing the company in an even more critical situation considering the difficult situation the sector is going through."

ArcelorMittal is among of Mexico's largest steel makers. It produced 3.9 million metric tons of steel in the country in 2014, the latest figure available.

Ricardo Torres, local secretary general of the labor union in Lázaro Cárdenas, said the company refuses to fill vacancies and has let go part-time workers who would cover for absences, leaving heavier workloads for remaining employees and compromising safety.

"The company argues that it needs to reduce costs and expenses, and the worker base has diminished," he said.

The final straw that led to Friday's strike by some 3,100 unionized workers was the closure of a plant used to make coke, which left 238 workers without jobs, Mr. Torres said. Those workers had to be relocated or given severance pay, and the company complied with neither, he added.

ArcelorMittal officials weren't available to comment Tuesday. A Labor Ministry spokesman was unavailable for comment.

The Mexican steel industry has been suffering from weak global demand for steel, global overcapacity and cheap imports into Mexico from countries such as China. The government last year placed a temporary 15% import tariff on dozens of steel products that it deemed were hurting local industry.

"The situation for steel has been bad, with the imports of foreign steel, so productivity levels are very low," Mr. Torres of the metal workers union said. "We're aware of the difficult phase."

Write to Anthony Harrup at anthony.harrup@wsj.com

(END) Dow Jones Newswires

March 08, 2016 18:12 ET (23:12 GMT)

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