A strike by workers demanding higher wages has brought tyre production and activity at two major car factories in Argentina to a complete halt, government and union sources confirmed on Monday.
"The strike is affecting the entire automotive chain," said the government's Industry Secretary José de Mendiguren told the A24 television news channel.
The strike is being carried out by 5,600 employees of major tyre manufacturers, including the market leader Bridgestone, multinational producer Pirelli and local firm FATE, in a trade union conflict that has spread to "the Toyota and Ford plants because they lack the stock they need," claimed De Mendiguren.
Labour Ministry officials met with representatives from the union and the relevant business chamber on Monday though talks remained at a standstill. A fresh round of negotiations has been called by the government for Wednesday.
The wage dispute involving the Sindicato Único de Trabajadores del Neumático (SUBNA) union has been going on for more than 100 days without agreement, but the situation has worsened since the weekend as work at factories was paralysed.
Pirelli said it was halting production on Sunday. A source at the company confirmed to the TN news channel on Sunday that Pirelli had “stopped the entire operation” until the blockade imposed by the SUTNA tyre-makers union is lifted.
"We stopped the entire operation and have shut down the factory's boilers until the union blockade is lifted," the company later confirmed in a statement.
National producer Fate confirmed a halt in its production on Saturday and had Japanese multinational Bridgestone on Friday, which declared a "temporary" closure of its operations in Argentina.
"The employers are in fact trying to impose the closure of the 2021-2022 wage negotiations, ignoring the demands of the workers and proposing an insignificant increase of 38 percent when government projections of inflation reach 100 percent for that period," the SUTNA union said in a statement.
Consumer prices rose by 56.4 percent up to August in Argentina this year. The Central Bank’s most recent survey of market expectations forecast a final rate of more than 90 percent this year.
De Mendiguren criticised the extent of the union protest by indicating that "of the 265 industrial salaries [in Argentina], the tyre industry has the 19th best average salary."
He claimed that the paralysis affected 127,000 direct and indirect jobs in the national automotive chain.
The secretary added that vehicle exports increased by 70 percent this year compared to 2019’s data, before the coronavirus pandemic.
Economic activity accumulated an increase of 6.4 percent and unemployment fell from 9.6 percent to 6.9% year-on-year in the first half of the year, according to data published by the INDEC national statistics bureau.
Argentina's automotive industry grew by 69 percent in 2021 compared to 2020, when the pandemic brought it to a near standstill. Production last year reached some 430,000 units.