Volkswagen Mexico Workers Accept 9 Percent Salary Increase

Workers at Volkswagen’s assembly plant in Puebla voted for a third time on a union-negotiated salary increase on Sep. 12. This time workers accepted the 9 percent direct salary increase and 2 percent increase in benefits brokered by the automaker company and the Independent Union of Automotive Workers (SITIAVW).?

Similar proposals were discarded twice last month, after which the company decided to postpone the vote. The new deal, which received a 63 percent approval rate among eligible voters, represents the highest salary increase an automaker has made in Mexico. The raise will be retroactively applied to start on July 20.?

"We congratulate the decision of the majority of Volkswagen Puebla workers, for approving the contractual review agreement that represents benefits in their salary and benefits and avoids a strike,"?wrote?Luisa Alcalde, Minister of Labor, on her Twitter account.

Authorities of the state were expecting an agreement to be reached as soon as possible. Puebla’s Governor Miguel Barbosa had previously highlighted the importance of respecting both worker’s freedom to vote and the company’s rights. “[The voting] results must be respected, but at the same time reflected upon... I want to tell you and announce that even though the relations between Volkswagen and its union fall under federal jurisdiction, I will seek to participate in the balance, in the dialogue on this matter,” said Barbosa earlier this month when union workers rejected a previous deal, as?reported?by MBN.?

The new agreement covers almost 7,000 unionized employees and has a 2-year period extension. SITIAVW had first requested a 15 percent direct salary increase, taking into account that inflation in Mexico is expected to surpass 8 percent by the end of 2022.?

“The ratification of the agreement motivates us to continue working on strengthening the relationship with our collaborators," said Volkswagen, as?reported?by Reuters. The German automaker began operations in Mexico in 1964. Since then, the country has remained a critical point of operations for Volkswagen. Its assembly plant in Puebla is one of its largest, producing many of its bestseller vehicles including the Jetta, Beetle, Golf and Tiguan Long. The company recently announced a?new investment?in electromobility that will benefit over 11,000 workers in Puebla, as reported by MBN.?