After three weeks of negotiations, Volkswagen’s Mexico unit has agreed to increase the pay and benefits of workers by 5.46 per cent, with increase in pay by 3.62 per cent and an increase in benefits by 1.84 per cent. A collective contract to this effect was signed between the Independent Union of Automotive Industry Workers and the management of Volkswagen, Mexico. Although the exact nature of increase in benefits, that the Company has offered to the workers is not known, the decision has come from the German auto maker after it froze workers’ salaries in Germany this year, owing to the financial pressure brought on by the COVID-19 crisis.
The 3.62 per cent hike in pay by the Company takes into account the inflation rate in Mexico in July. The workers have been struggling to get an increment ever since the pandemic struck. The union in the central state of Puebla, which is the largest plant run by Volkswagen in Mexico, had sought a 12 per cent increase in pay and threatened to go on strike by Aug 18, if the demands were not duly fulfilled.
The plant in Mexico consists of over 11,000 workers, and manufactures the Tiguan, Jetta and Golf models for the Mexico and the US markets.
This increase in pay and benefits has come into effect from August 17, 2021.