Volkswagen workers in Mexico agree to 9% raise in third vote

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, 12 Sep. (Reuters) – Volkswagen workers (VOWG_p.DE) Mexico’s main plant voted on Monday to approve a 9% pay hike after the proposal was rejected twice last month.

Volkswagen de Mexico last week agreed to delay the proposed wage increase for an additional month to get workers’ approval. read more

The agreement between the company and the Automotive Workers’ Independent Trade Union (SITIAVW) at Volkswagen’s Puebla plant marks the highest premium for a Mexican automaker in years. However, it only slightly exceeds inflation.

According to the union’s calculations, about 63% of eligible voters voted in favor of the final agreement.

“We applaud the decision of Volkswagen Puebla workers to approve an agreement that represents wages and fringe benefits and avoids a strike conflict,” Labor Minister Luisa Alcalde tweeted after the vote.

Under the terms set out on Monday, the new wage rate will apply retroactively to July 20 instead of August 18, the expiration date of the previous contract.

The contract, which covers nearly 7,000 unionized employees, takes effect within two years, with negotiation fees again one year later.

Reporting by Dinah Beth Solomon; Additional report by Kylie Madry; Edited by Christopher Cushing and Ana Nicolaci da Costa

Our standards: Thomson Reuters Trust Principles.