MEXICO CITY (Reuters) -- Unionized workers at Volkswagen's Mexico plant are seeking a 13.6 percent pay raise in contract talks with the German automaker that began on Tuesday, the union said.
The talks come four days after the workers agreed to cut their work week to four days from five to avoid job losses.
The 9,800-strong union said it would strike on Aug. 18 if no deal on a new contract was reached, but union leader Jose Rodriguez said he hoped a walkout could be avoided.
"Our salary demands are high, but they are subject to negotiation. It's very probable we can come to an agreement within our time frame," Rodriguez told Reuters.
Spokesmen for Volkswagen Mexico, a unit of Volkswagen AG, were not immediately available for comment.
The pay demands are well above those made by workers at other automakers in Mexico, which range from 3 percent to 7 percent. Labor relations at the Puebla plant, two hours east of Mexico City, are seen as a barometer of union negotiations across Mexico.
The talks come at a difficult time for VW Mexico. Like other Mexico-based automakers such as DaimlerChrysler, the company is suffering from weak demand for exports in the face of a weak U.S economy.
VW Mexico's car production fell 11.2 percent in the first seven months of the year compared with the same period a year earlier.
VW Mexico, which exports 80 percent of its vehicles produced in Puebla, in June said it would cut production by 23 percent because of the slow demand. It also said it planned 2,000 job cuts.
But workers avoided layoffs by agreeing last Friday to reduce hours and salaries until demand picks up again. The Puebla plant, which produces the New Beetle and the Jetta, will shut down production from Friday to Sunday.
"We've just come out of some difficult negotiations, but I think we can come to another good agreement," said union leader Rodriguez.
Workers at the Puebla plant went on strike in 2000 and 2001, but VW avoided a walkout last year as staff agreed to a wage increase of 5.5 percent and a benefit increase of 1.5 percent.