Workers at Volkswagen's Mexican unit have rejected the automaker's proposal for a 13.16% overall wage increase over two years, prompting authorities in the country to call on the company and the union to return to the negotiating table.
The vote was taken by 5,608 members of the Independent Union of Workers in the Volkswagen Automotive Industry (SITIAVW), or 90.3% of those eligible to vote. 3,135 voted against the agreement, while 2,452 voted in favor. Another 21 ballots were invalid. Thus, nearly 56% of those who participated in the vote voted against the proposal.
Following the result, the Mexican Ministry of Labor and Social Security and the Federal Center for Reconciliation and Labor Registration called on Volkswagen and workers' representatives to resume dialogue and seek a solution to the disagreements over wages.
The proposal provides for a total increase of 13.16% over a period of two years. The information provided does not indicate that this is a one-time increase in basic wages by the entire percentage, so the amount should not be interpreted as an immediate increase in monthly wages by 13.16%.
The dispute is particularly important for Mexico's automotive industry. Volkswagen is among the largest employers in the sector, and the German group's plant in the state of Puebla is one of the largest automotive production complexes in the country. It produces cars for the local market and for export.
Mexico is a key manufacturing base for the global auto industry thanks to its extensive network of suppliers and access to the US and Canadian markets. Therefore, labor disputes at large plants such as Volkswagen's plant can have an impact not only on the company's production but also on related suppliers.
Volkswagen did not immediately respond to Reuters' request for comment after the vote. After the rejection of the agreement, the company and the union will have to decide whether and under what conditions to resume negotiations.