Volkswagen in Mexico offers additional payment to get workers’ approval for new deal

A Volkswagen logo is displayed at a factory in Mexico during a new vote to ask workers if they approve of a recently struck deal with management, in Puebla, Mexico on August 31, 2022. REUTERS/Imelda Medina.

MEXICO CITY, 9 Sep. (Reuters) – German automaker Volkswagen (VOWG_p.DE) will offer workers at its main plant in Mexico an extra month of wages in a bid to secure their approval of a 9% raise by their union, union officials said Friday.

The workers, who voted twice last month, rejected the agreement in what would be the highest increase for a carmaker in Mexico in years. However, it only slightly exceeds inflation.

Nearly 7,000 unionized employees are due 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 Automobile Workers (SITIAVW).

The contract, which runs for two years with a negotiation fee again a year later, must now apply retroactively to July 20 instead of August 18.

The new conditions offer “a direct benefit to workers,” the statement said. The strike deadline is set for Wednesday unless the workers approve the contract again and a new deal is reached, he added.

Volkswagen said last week that it was disappointed that the workers did not approve the 9 percent pay deal, and that the rejection hurt all parties.

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

Reporting by Dinah Beth Solomon; Editing: Dave Graham Editing: Jonathan Oatis

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