Volkswagen Plant Workers Reject Union’s Agreement

Workers at Volkswagen’s assembly plant in Puebla recently rejected a salary and contractual agreement reached between the Independent Union of Workers of the Automotive, Similar and Related Industries (SITIAVW) and the automotive company. Negotiations began on June 20, 2022, and included a 11 percent salary increase, with a 9 percent increase in direct salary and a 2 percent increase in benefits. The rejected deal also included a 0.85 percent increase in the contributions to their savings funds and the full payment of the annual profit shares.

On Aug. 9, 2022, 53.4 percent of the unionized workers overturned the contract negotiation, which could lead to another strike on Aug. 18. To greenlight an agreement, it must be backed by over 50 percent of the 6,687 registered workers at the plant.

SITIAVW said in a press release that 70 percent of union members voted, with 2,248 votes in favor of the agreement, 2,586 against, one null vote and 2,032 unused ballots, according to El Economista. This would have been the greatest salary increase in the automotive industry, topping General Motors’s 8.5 percent wage hike in Silao, Guanajuato. This latter agreement had a 87 percent approval rate, as reported by Reuters.

The union and Volkswagen representatives are expected to meet again to negotiate a new wage increase and call for a new vote. “If an agreement is not reached, it is expected that the Volkswagen plant in Puebla will go on strike on Aug. 18 as planned,” said SITIAVW.

Volkswagen’s plant in Puebla produces the Jetta, Bettle, Bettle Carbiolet, Golf, Golf SportWagen and Tigual Long, making it one of its largest assembly plants in Mexico.

The automotive industry remains critical for the Mexican economy. For every dollar exported, US$0.30 comes from the automotive industry. Volkswagen had recently announced a new investment in the plant to back its electromobility efforts. “[This investment] will improve infrastructure and technology at our plant in Puebla. The project considers the production of a new vehicle. This investment package will prepare everything for us to move forward on the road to electrification, ensuring the long-term stability of our work team,” said Holger Nestler, CEO, VW Mexico, as reported by MBN.