Volkswagen of Mexico Workers Win 21% Pact

Workers at Volkswagen of Mexico won a pay raise substantially higher than the rate of inflation, in a settlement that’s likely to encourage other Mexican unions fighting to recover the buying power workers have lost over more than a decade of austerity policies. The workers won a 21% overall increase, consisting of a 13% wage hike, a 5% increase in productivity incentives, 2% in loans and 1% in aid for school supplies for workers’ children, a union spokesman said. The union originally sought a 35% wage increase and the company offered 10%, which matches the government’s inflation target for this year. The union’s 12,600 members went on strike Aug. 18, halting production at the German car maker’s only North American plant, but went back after federal authorities declared the strike illegal five days later.