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News Article

Volkswagen, Workers Union Reach Agreement

By Antonio Gozain | Wed, 08/18/2021 - 15:22

In this year’s salary revision, Volkswagen de México and the Independent Union of Volkswagen Automotive Industry Workers (SITIAVW) agreed to a 5.5 percent salary increase beginning this Wednesday, the German automaker informed.

“The size of the challenge we face as an industry requires commitment and willingness to work as a team to succeed,” said in the statement Kai Linnenkohl, Vice President of Human Resources Department of Volkswagen de México. “That is why I congratulate the members of the negotiating commissions who understood these challenges and reached an agreement that protects the purchasing power of the staff on one hand, and gives financial sustainability to the company on the other.”

This new deal also included a 1 percent increase to workers’ saving funds. The negotiations were driven in Puebla, where Volkswagen has its main plant in Mexico. José Juan Hernández López, the workers’ union leader, started the negotiations asking for a 16 percent salary increase, reported MBN, following 2020’s negotiations, which started in a 12 percent demand and ended in a 3.62 percent increase.

The agreement was reached in “an environment of challenges, where the automotive industry struggles to keep recovering after more than a year of the COVID-19 pandemic, and in the face of the semiconductor (chip) shortage,” said Volkswagen in a press release.

Volkswagen’s Mexican unit employs over 15,000 people. In Puebla alone, Volkswagen assembles over 440,000 cars per year. With this agreement, the company sends a message of labor stability to the entire automotive industry in the country, said Linnenkohl.

Volkswagen de México’s situation in this regard is better than some of its competitors’, such as GM, which faces a complain recently presented by the US Trade Representative (USTR). The complaint claims that GM denied its workers the right to freely associate with their preferred union. The situation will now be reviewed by the Mexican Ministry of Labor (STPS), reported MBN.

"If Mexico were to determine that there is a Denial of Rights to workers at the General Motors de México facility in Silao, Guanajuato, the US further requests, pursuant to USMCA Article 31-A.4.2, that Mexico attempt to remediate within 45 days of this request," reads USTR’s complaint.

The agreement reached between Volkswagen and the SITIAVW prevented a strike and will let the automaker focus on different challenges in the near future, such as economic recovery from the COVID-19 pandemic or the semiconductor chip shortage. Another challenge Volkswagen will face is the digital revolution launched in its North American plants, including those ones in Puebla and Silao, Guanajuato. The company is investing US$1 billion in artificial intelligence and robotics, aiming to boost its productivity by 30 percent by 2025.

The data used in this article was sourced from:  
MBN, Volkswagen
Antonio Gozain Antonio Gozain Journalist and Industry Analyst