NO STRIKE as Volkswagen and Mexican Autoworkers Reach Salary Deal

10:33 am ET

MEXICO CITY September 3,2002 AP reported that unionized workers at Volkswagen's plant in the central Mexico state of Puebla agreed Tuesday to accept a salary increase of 5.5% and a 1.5% increase in benefits, averting a potential strike. The union had set a Tuesday deadline for reaching an agreement in annual contract talks for 10,300 workers at the plant, the government news agency Notimex reported.

Volkswagen's plant in Puebla, 65 miles east of Mexico City, produces the New Beetle, the old-model Sedan and other cars. The plant, which has slowed output in 2002, was hit by an 18-day work stoppage in 2001.

The final agreement reflected a middle ground between the union, which had demanded a 10.2% increase, and the German automaker, which had initially offered only 3.5%.