The Mexican unit of German automaker Volkswagen AG agreed to a pay rise with its 11,000 unionised workers on Saturday and averted a weekend strike, the union said.
Workers at the plant, the world's only producer of Volkswagen's New Beetle model, won a 5.5 percent increase in pay and benefits, lower than their 8.3 percent demand but above an initial company offer of 2.5 percent, said union leader Jose Luis Rodriguez.
"We were able to increase (the company's) first salary proposal," Rodriguez told a news conference after late-night talks in the Labour Ministry in the Mexican capital. The Volkswagen plant in the central Mexican state of Puebla, 75 miles (120 km) east of Mexico City, exports mainly to the United States and Europe. It is Volkswagen's only plant in North America.
The plant has a target output of 400,000 vehicles this year compared to production of 347,020 in 2006, when the company suffered a six-day pay strike.