| | |  Business News | August 2009 
Union Reaches Deal to End Volkswagen Mexico Strike
 Julio Martinez - Reuters
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| | Workers at Volkswagen AG's Mexican plant arrives for wage negotiations between the union and the company at the Labour Ministry in Mexico City August 20, 2009. (Reuters/Claudia Daut) | |
Puebla - Management representatives from Volkswagen AG's (VOWG.DE) Mexican subsidiary agreed on Saturday to give workers a small raise, clearing the way to end a strike.
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.
Volkswagen builds 1,500 cars a day at the plant for both the Mexican market and for export.
(Editing by Vicki Allen) |
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