MEXICO CITY -- Volkswagen's Mexico unit has agreed an increase in worker pay and benefits of 5.5 percent in a new collective contract.
Manuel Aburto, spokesman for the Independent Union of Automotive Industry Workers (SITIAVW), said the deal comprised a salary hike of 3.62 percent and a rise in benefits of 1.84 percent.
Unionized workers at Volkswagen's plant in the central state of Puebla, one of the largest auto plants in Mexico, had sought a 12 percent wage increase and threatened to strike over the demands by Aug. 18.
The new deal, which came after more than three weeks of negotiations, would go into effect at 11 a.m. local time on Tuesday, Volkswagen Mexico said in a statement.
The company said the union would provide details of the deal.
