Volkswagen Approves 4% Pay Increase

Volkswagen de México agreed on a 4% pay rise with the union at its plant in Puebla after conducting the 2025 pay review under a “respectful and constructive dialogue process,” the company reported.

It is worth mentioning that the Independent Union of Volkswagen Automotive Industry Workers (SITIAVW), which has about 7,000 members, had initially proposed a 14% increase.

However, the proposal contrasts with the German automaker's performance both globally and in North America, where in the second quarter of the year alone it reported a drop in sales in the US market of almost 30% compared to the same period in 2024.

This double-digit slump was partially offset by the first quarter results, when sales increased by 7.1%, bringing the decline in deliveries for the first half of the year to 12.8%, with a total of 159,310 units.

Due to these figures, production at its largest plant outside Germany fell by almost 20% during the first seven months of this year, to 186,484 units.

Similarly, exports fell by 21% to 148,432 units in the same period.

In the Mexican market, Volkswagen sales fell by 3.2%, with just over 94,000 vehicles sold between January and July.

In the global context, Europe's largest automaker posted an operating profit of €6.7 billion (US$7.791 billion) in the first half of the year, which translates into a 33% drop from last year's figure of around €10 billion.

The German automaker reported an impact of just over US$1.5 billion in the first half of the year as a result of tariffs implemented by the Trump administration, but also recorded an additional charge of more than US$800 million in restructuring costs for both its main brand and its Audi subsidiary.

Due to the aforementioned costs, the operating margin for the first half of the year was reduced from 5.6% to 4.2%, while the projected operating return on sales for the full year was adjusted downward to a range of between 4% and 5% from the previous range of between 5.5% and 6.5% forecast at the beginning of the year.

In this context, the company and the union said they had carried out “a detailed analysis of the current environment, marked by significant challenges for the automotive industry globally, as well as for the Volkswagen Group and Volkswagen de México,” which led to the wage agreement.

“At Volkswagen de México, we are convinced that open dialogue and mutual respect are fundamental pillars for building agreements that benefit all parties,” said Ricardo Guerrero, executive vice president of Human Resources and Organization at Volkswagen de México.

“This result reflects our commitment to a business strategy focused on people and their well-being,” emphasized the executive.

Volkswagen de México thanked the labor authorities and the team of mediators who accompanied this process, “facilitating an environment of understanding and collaboration.”

“This agreement sends a strong signal of stability and labor peace, key elements for strengthening the position of the Puebla plant as a relevant and attractive subsidiary within the Volkswagen Group,” the German company concluded.