Strike avoided at VW of Mexico

Volkswagen AG said early today it avoided a strike at its Puebla assembly complex in Mexico after its union accepted a 4.35 percent wage and benefits hike plus another 111 pesos (about $10) per month in grocery vouchers.

A company spokeswoman in Puebla told Automotive News the last-minute deal was completed at 5.30 a.m. local time after an all-night bargaining session. Miguel Angel Galan, the union’s spokesman, confirmed the agreement, calling it “one of the highest annual increases in the (Mexican) automotive industry. We are way ahead of other companies,” he said today.

The Puebla plant makes Jetta A5s, Jetta A4s, New Beetles and Golf/Bora/Jetta station wagons for Mexico and world markets. VW is aiming to produce 400,000 light vehicles at Puebla this year, up from 347,020 in 2006.

Late Friday, José Luis Rodriguez, secretary-general of the Independent Union of Volkswagen Workers, said that 70 percent of rank-and-file members voted to hold out for a 5.5 per cent increase.

If the company was unwilling to meet that demand, a strike would have been called at 11 a.m. local time today, Rodriguez said.

“At the conclusion of the review of the collective contract, which took place at the Labor Ministry in Mexico City, Volkswagen Mexico and its union have reached an agreement on a wage increase,” the company’s statement said.

“With this agreement, a strike, which was to have started at 11 a.m. today, has been avoided.”

Earlier Friday, VW said it made an improved offer of a 4.06 percent wage increase to the union. The automaker's initial offer was 2.5 percent.

The union had asked for an 8.3 percent increase, according to a Thursday news bulletin.

The talks are held annually to review workers’ wages and employment conditions.

In an interview earlier this week, Galan said the current average wage for hourly workers at the plant is $320 pesos ($28.25 dollars) per day, plus $110 pesos (about $10) in benefits such as transportation and food vouchers.

Labor issues date back several years at Puebla. Last August, production at the plant was halted by a five-day strike. It ended when the union accepted the company's offer of a 4 percent wage increase plus 1.5 percent gains in perks, such as grocery vouchers.

The plant employs 10,264 hourly workers after Volkswagen added 600 workers at the plant this year.