Matamoros maquila jobs in jeopardy as U.S. auto supplier winds down amid bankruptcy

Maquiladora workers in Matamoros are facing potential job losses after a U.S.-based automotive parts maker announced on Monday it is winding down key business units under bankruptcy.

The move is colliding with already tense labor negotiations across the manufacturing sector in Matamoros, where wage talks, bonus demands and labor activism have fueled protests, rumors of additional closures and mounting worker anxiety.

The company, First Brands Group, filed for Chapter 11 bankruptcy protection in late September, and on Monday, it announced it has begun winding down its Brake Parts Inc., Cardone and Autolite business units, including the shutdown of manufacturing in Mexico for those product lines.

First Brands employs more than 14,000 workers in Mexico between two distribution centers and 36 maquiladoras, including certified facilities in Matamoros that are part of its automotive manufacturing network. Its brands produce a wide range of automotive components.

What the wind-down means for Matamoros

The company did not disclose how many workers in Matamoros will be affected by the wind-down.

But Cardone Industries, which operates locally as Tridonex and was mentioned in the wind-down,  employed about 3,000 workers in the region prior to layoffs in 2020, according to previous reporting by MyRGV.

An internal company email shared Monday by labor activist and attorney Susana Prieto shows the wind-down is broader than initially described. Prieto could not be reached for comment Monday. 

According to the document she shared on Facebook, the move also affects Centric Parts, StopTech and International Brake Industries.

First Brands initially tried to sell or secure financing for those business units after filing for Chapter 11 in September, but it was unable to do so, prompting the decision to begin an orderly shutdown, the company email indicated. 

The email also said that employees will receive location-specific notices about what the closures mean and that other business units — including FRAM, Trico, Walbro, Reese and TMD — will continue operating.

Bonus demands, not widespread bankruptcies

Attorneys and business leaders in Matamoros say most current labor disputes are not being driven by bankruptcies, but by whether companies can afford new compensation demands layered on top of legally required wage increases.

“In many cases, these are not companies that are going bankrupt or planning to withdraw immediately, but rather businesses facing difficulties in meeting additional economic demands in an environment already strained by rising labor and operating costs,” said Alma Rosa Garza Díaz, an attorney at Pérez Garza y Asociados.

Union activity in Matamoros has intensified since 2022, with workers seeking regular raises, extra cash bonuses, and an end to long-standing arrangements that locked many factories into a single union.

“They are asking for an additional bonus on top of the wage increase,” Garza Díaz said.

Tridonex, which operates Cardone-branded manufacturing in Matamoros and has been operating in the city for decades, has been frequently mentioned in local discussions and rumors.

Garza Díaz said concerns about the plant stem from wage negotiations, not from any confirmed layoffs or closure.

“Right now, wage increases are being negotiated, and those companies in particular where the union is largely led by Susana Prieto are requesting an additional bonus on top of the raise,” she said. “Those of us in Matamoros who are familiar with the situation believe the issue lies more in the companies’ inability to pay those bonuses than in any declaration of bankruptcy at the plants.”

Previous abrupt departures by other companies have made workers and residents quick to fear closures whenever labor negotiations intensify, Garza Díaz said, even when plants remain in operation.

Weak coordination, rising tension

Business and legal leaders say weak coordination among city officials, business groups, private-sector leaders and unions in Matamoros has made disputes harder to contain and quicker to escalate than in other border cities.

“The problem here is that the Chamber of Commerce, the municipal government, the union and business leaders did not present a united front,” Garza Díaz said.

Despite the turbulence, multiple local stakeholders say there is no verified evidence of a mass exodus of maquiladoras from Matamoros.

Edgardo García Villanueva, president of the Matamoros Bar Association and legal counsel to maquiladora companies, said there is no official confirmation that Trico or other major plants plan to leave the city beyond the First Brands wind-down.

“There is no problem, and Trico is not leaving,” García Villanueva said.

He said union leader Juan Villafuerte Morales, general secretary of the Sindicato de Jornaleros y Obreros Industriales y de la Industria Maquiladora (SJOIIM), has also publicly stated that Trico continues to operate normally and that no document exists indicating a closure or departure.

Villafuerte has pointed to broader global uncertainty affecting manufacturing, including shifting market conditions, trade policy changes, tariffs and rising material costs.

Business leaders: No mass exodus

Local economic development officials echo that message.

René Xavier González, president of the Matamoros Economic Development Council (CODEM), said companies currently operating in the city continue to invest, maintain contracts and keep facilities running despite negative narratives circulating about the maquiladora sector.

“Matamoros has problems, like any city, but it also has significant investment, new restaurants, economic activity and companies that continue to commit to staying here,” González said.

González said although no new industrial projects have been announced recently, companies already established in Matamoros continue to operate normally, which he said reflects continued confidence in the city.

At the same time, García Villanueva warned that prolonged labor conflicts could damage Matamoros’ investment climate, as investors prioritize locations with predictable labor relations, legal certainty and social stability.

He pointed to Inteva, a global automotive parts manufacturer with multiple plants and significant investment in Matamoros, as an example of a company with a long-term presence in the city and said labor conflict should not be encouraged at large employers with established operations.

Workers, García Villanueva said, should seek information directly from company management rather than outside actors, warning that misinformation can lead to decisions with negative consequences for the local labor environment.

_{Kristen Mosbrucker-Garza, of the Rio Grande Valley Business Journal, contributed to this report.}