The labour union at the Mexican unit of Volkswagen AG sought to clinch an 8.5% salary increase on Monday, two days ahead of a deadline to go on strike, while their German counterparts want a 4% rise and job guarantees, according to Reuters reports.

Jose Luis Rodriguez, leader of the 9,800 unionised workers at Volkswagen’s Mexico plant, reportedly said the 8.5% demand was an opening salvo in annual salary review talks with management. The union also wants a 4.1% increase in benefits, he said.

“That’s our starting point,” Rodriguez told Reuters. “We are about to start negotiations. Both positions are negotiable.”

Reuters said that union workers plan to strike at Volkswagen Mexico, the sole maker of the New Beetle car that is exported to 80 countries, on Wednesday if no accord is reached. Talks with management were scheduled to begin late on Monday.

At the outset of pay talks last year, the union demanded a 13.6% salary increase and eventually agreed to a 5.25% hike, the report noted.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Separately, workers at Volkswagen are seeking a 4% pay rise and job guarantees in contract talks with Europe’s biggest carmaker next month, a spokeswoman for the IG Metall union told Reuters on Monday.

She reportedly also rejected media reports that the metalworkers union was at odds with counterparts on the German company’s works council over strategy in the closely watched negotiations that start on September 15.

The news agency noted that VW works council head Klaus Volkert has said that job security was more of a priority than getting 1.5% more pay.

Reuters added that over 100,000 workers are covered by the contract with Volkswagen, which had to chop its 2004 earnings outlook last month after weak first-half earnings.

It aims to save more than €1 billion ($US1.23 billion) in costs this year as it battles a sluggish domestic market, the impact of a strong euro and loss-making US operations.

VW reportedly wants the wage talks to agree on more flexible working rules for its six plants in western Germany, laying the groundwork for its mid-term goal of cutting labour costs by 30%.