Volkswagen in Mexico offers extra pay to get worker approval for new deal

Union at Volkswagen in Mexico holds new contract vote

By Daina Beth Solomon

MEXICO CITY (Reuters) – German carmaker Volkswagen will offer workers at its main Mexico plant an extra month of wages in a bid to secure their approval of a deal negotiated by their union for a 9% raise, labor officials said on Friday.

Workers in votes twice last month rejected the agreement, which would mark the highest raise at an automaker in Mexico in recent years. However, it is only slightly above inflation.

The nearly 7,000 unionized employees are set to vote again on Monday, Mexico’s labor ministry said in a joint statement with Volkswagen de Mexico and its union in the central state of Puebla, the Independent Union of Automotive Workers (SITIAVW).

The contract, which is good for two years with pay up for negotiation again in one year, is now set to apply retroactively to July 20 instead of Aug. 18.

The new terms offer “a direct benefit to workers,” the statement said. A strike deadline is in place for Wednesday if workers again fail to approve the contract and a new deal is not reached, it added.

Volkswagen last week said it was disappointed by workers’ failure to approve the 9% pay accord, and that the rejection harmed all parties.

Inflation in Mexico reached 8.70% in August, and analysts expect 2022 to end with the figure still above 8%.

(Reporting by Daina Beth Solomon; Editing by Dave Graham editing by Jonathan Oatis)