VW Mexico strike ends; workers get 3% raise

 

 

 

 

 

 

 

VW Mexico strike ends; workers get 3% raise

 

Automotive News | August 24, 2009 – 12:01 am EST

 

PUEBLA, Mexico — Management representatives from Volkswagen AG’s Mexican subsidiary agreed on Saturday to give workers a small raise, clearing the way to end a strike that has disrupted shipments of Jettas and New Beetles to the United States.

Union members, on strike since Tuesday, will return to work later on Saturday, said union official Victor Jaime Cervantes.

Volkswagen said in a press release it agreed to give workers a 3 percent raise and a one-time cash payment.

Volkswagen is one of Mexico’s biggest manufacturers, and like the rest of Mexico’s auto industry its Mexican plant has been hit hard by the U.S. recession. Mexico’s auto output fell 25 percent in July from a year earlier.

"Labor costs at Volkswagen in Puebla continue to rise while the rest of the auto industry in Mexico did not give raises this year. This obliges the company to reinforce measures to improve production," Volkswagen said in a statement.

Mexico’s plummeting auto exports have been a leading factor in the country’s recession, with the economy this year expected to contract more than any time since 1932.

UBS analysts estimated a shortfall of about 1,000 to 1,200 vehicles a day because of the work stoppage at the factory, in the central state of Puebla. Volkswagen makes cars for both the Mexican market and for export.

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