Red-and-black banners reading, "Volkswagen union on strike" went up in front of the plant as workers walked out that day. They shut down production after nine days of negotiations failed, with the company refusing to agree to a wage hike.

Since then the company has offered a 7 percent increase, but has threatened to withdraw that offer, saying the union demand for a 21 percent rise was "totally disproportionate" with inflation. It called on the government to declare the strike illegal.

José Luis Rodríguez, general secretary of the Independent Union of Volkswagen Workers, said the union had scaled its original demand of a 30 percent increase, and said the raise was "negotiable," but insisted that the union will not go lower than 10 percent.

"We want a wage increase within the levels in the auto industry," said Rodríguez. This year workers at Mexican plants of General Motors, Nissan, and Ford won wage increases of 10.5 percent to 16.5 percent, according to union officials.

The federal government sought to put an end to the labor dispute by proposing a 5.5 percent increase. The proposal was rejected at a union membership meeting the day before the strike began.

The strike has won the support of other unions, community organizations, and the Permanent Land Congress, a peasant organization that has been involved in recent farmers' protests demanding relief for the crisis in the countryside.

The VW plant in Puebla, which employs 16,000 workers, is the third-largest foreign company after DaimlerChrysler and Ford Motor Co. Last year it turned out some 426,000 vehicles, 80 percent of them for export, with the big majority for the U.S. market. The plant manufactures the new Beetle, Jetta, Golf Cabrio, and the old Beetle.

Company officials say the slowdown in the U.S. economy and the weakening of the dollar have affected sales of cars produced at its Puebla plant this year. The company has idled the assembly line for a total of nine days so far this year to avoid inventory overflow. Union officials argue that the company is using the strike as an opportunity to get rid of its excess stock in the face of a slow market in the United States and Canada.

The Mexican daily La Jornada reported that the VW plant is tied to some 90 outside parts suppliers, employing 100,000 workers. René Sánchez Juárez, general secretary of the Revolutionary Confederation of Workers and Peasants (CROC), the main union that organizes these plants, said that at least 10 plants will have to stop production in a matter of days, affecting more than 3,000 workers.

The strikers have received support from other unionists, including those organized by the National Workers Union (UNT), a labor federation. UNT leader Francisco Hernández Juárez said that if an agreement was not reached, the organization would hold rallies in the state of Puebla, a demonstration in Mexico City, and protests at Labor Department offices around the country.  
 
 
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