Mexico & Nafta - 15 July 2003

The decision by the German car maker, Volkswagen, to lay off 2,000 people at its plant in Puebla and end production of the oldstyle Beetle, has drawn a fierce response from the traditionally militant VW workers. On 11 July President Fox tried to head off the union by meeting the leader of the Sindicato Independiente de VW, José Luis Rodrí­guez. The union leader said that his members stood ready to make some concessions in return for a commitment to no layoffs. This is a reversal of their position last year when the company offered lower pay in return for a no layoff guarantee. The workers at the plant voted, against the union's advice, for a package involving higher pay and 1,200 redundancies. 

VW expects to lay off the 2,000 people from 1 August. The union has toughened its position saying that it will call a strike unless VW reaches an agreement with it. The union offer is for a change in shift patterns which would mean that workers would have four days on and three days off. The union says that its members are prepared to see their pay drop by the commensurate 20%. The catch for the company, clearly, is that when demand for its cars, especially in the US, improves, it will be locked into paying overtime on the fifth day of a five-day week. 

VW said that it has been forced to cut production because of the weak demand from the US, where over 60% of the Puebla-made vehicles are usually sold.

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