Volkswagen to Invest US$763.5 Million in Puebla

Volkswagen Mexico announced a US$763.5 million investment to build a new paint shop in Puebla, reaffirming the importance of the region for the company. The plant is expected to be finished by the end of 2023 and seeks to modernize the application of paint with a process that will eliminate the need for gas consumption, reducing emissions while also fully operating with renewable energy. 

Volkswagen first opened its doors in Puebla over 55 years ago and has invested upwards of US$1.16 billion in the state. "This investment is a vote of confidence from one of the largest car factories in the world," said Miguel Barbosa, Governor of Puebla, according to Cluster Industrial. He added that Puebla cannot be imagined without Volkswagen. 

Mexico’s automotive industry is heavily investing in measures to reduce emissions and increase sustainability. Another popular measure has been to invest in electromobility to provide for a cleaner and more sustainable industry. “Our industry is facing a dizzying transformation process. That is why we have to invest in electric vehicles, without neglecting combustion vehicles, to face this transition that will take more or less years, depending on the markets. But it is inevitable,” said Pablo Di Si, President and CEO, Volkswagen Group of America. 

Workers at Volkswagen's plant in Puebla recently reached an agreement with the company to increase their direct salary by 9 percent. They also received a 2 percent increase in benefits. The deal was brokered by the automaker company and the Independent Union of Automotive Workers (SITIAVW), as reported by MBN. The consensus was obtained after two similar proposals were discarded, but the new deal was approved with 63 percent of votes in favor. This deal represents the highest salary increase made by an automotive company in Mexico. 

"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. This new deal covers almost 7,000 unionized employees and has two-year period extensions. After that, the workers and the company will have to bargain again. “The ratification of the agreement motivates us to continue working on strengthening the relationship with our collaborators," said Volkswagen.