Volkswagen Mexico union to hold new contract vote after workers reject deal

Workers at Volkswagen's VOW main Mexico factory will be asked to vote again on whether to approve their union's deal with management for 9% raises after initially rejecting the agreement, the union said on Monday.

The plant's Independent Union of Automotive Workers (SITIAVW) reached a deal with the company for what would have been the biggest automaker raise in Mexico in recent years, covering some 7,000 people in the central state of Puebla, but the plan failed to pass a worker's vote needed for approval.

SITIAVW, one of Mexico's strongest independent unions, initially sought a raise above 15%, citing inflation. Last year, it negotiated a 5.5% increase with Volkswagen and in July settled on a 9% hike for the next year-long pay cycle.

Union salaries at the Puebla plant range from about $15 to $48 a day.

Mexico's Federal Center for Labor Conciliation and Registration has instructed the union to redo the vote in an effort to ensure higher turnout, SITIAVW said in a statement.

In the initial vote on Aug. 5, about 70% of eligible workers cast ballots, the Federal Center said. The "No" votes pulled ahead by 338 ballots.

SITIAVW said in a statement it has yet to set a date for the new vote but will repeat the entire process, including distributing the recently negotiated contract for the Puebla plant, where Volkswagen makes the Jetta, Taos and Tiguan.

Volkswagen said it hoped the new vote would represent all unionized workers. The company last week said it was committed to "constructive dialogue" with the union after the rejection.