Audi union in Mexico sets Jan. 1 strike deadline as workers eye higher pay

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MEXICO CITY (Reuters) - Worker representatives at automaker Audi's Mexico plant have set a Jan. 1 deadline to reach an agreement with the company over pay raises without launching a strike, the union said on Thursday.

The Independent Union of Audi Mexico Workers (SITAUDI) and Audi had previously negotiated two options to raise wages for the plant's 4,000 unionized employees in the central state of Puebla.

Workers last week voted down both proposals, sending their union and employers back into discussions.

One option offered an 8.4% pay increase in 2023. The other put forward a 9.4% hike next year followed by annual raises through 2026 in line with inflation, plus one percentage point.

SITAUDI leader Cesar Orta said workers felt disappointed by previous multi-year deals, and he respected their rejection of the new offers.

"They voted 'no' and that's respectable. Union democracy was exercised and we respected the voice of the majority," he said, adding workers could walk out if a new deal is not reached by Jan. 1.

Audi, which is owned by German carmaker Volkswagen (ETR:VOWG_p), said it would continue talks with SITAUDI in hopes of reaching a deal that benefits the company and workers.

The company's Puebla plant, open since 2016, produces the Audi Q5 SUV.

Workers at a nearby Volkswagen plant initially rejected an offer negotiated by their union for 9% raises, one of the highest at an automaker in recent years.

They accepted the deal in September after the company agreed to backdate the increase by an extra month.

Mexico's annual headline inflation hit 7.77% in the first half of December.