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VW Improves Pay Offer at Mexican Plant

August 29, 2001|From Reuters

PUEBLA, Mexico — Union leaders at the Mexican unit of Volkswagen said Tuesday that the German auto maker improved its pay offer in a bid to end a 10-day-old strike, but many workers reacted negatively as they began voting on the package.

Union leaders presented VW's new offer of an 8.5% salary increase plus improved benefits worth an additional 1.7% of their wages to an assembly of workers at the VW plant in Puebla, about 60 miles east of Mexico City.

The plant is the world's only factory producing the popular New Beetle, which is sold in 80 countries. It also manufactures the classic Beetle, Jetta and Golf Cabrio models.

VW said the strike is costing it about $30 million a day in lost output.

The latest wage proposal was an improvement on VW's initial base pay offer of 7% made last week.

Some of the nearly 10,000 striking workers who attended the union's assembly on Tuesday received the offer with boos and hisses, initially calling for the strike to continue.

Despite the offer's poor reception, workers began voting on the package on Tuesday afternoon.

The Puebla plant has about 16,000 workers, including 12,500 union members.

The VW offer for a 10.2% increase in workers' overall compensation packages was slightly above the union's 10% threshold for even considering company proposals.

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