PUEBLA, Mexico -- Striking union leaders and management at Volkswagen's Mexico plant on Thursday said they hope to cut a new pay deal by the weekend to end a shutdown of the auto maker's sole North American unit.
Union leader Jose Luis Rodriguez told Reuters that talks with management late on Wednesday failed to clinch a deal and the strike entered its second day on Thursday at the world's only plant producing the popular New Beetle.
But he said the two sides plan to resume negotiations on Friday and thrash out an accord on or before the weekend to end the strike in the cider-making city of Puebla, about 75 miles east of Mexico City.
"They (the company) have not yet improved their offer, but they have said there is a possibility to improve their offer," Rodriguez said. "The stances of both sides are negotiable, but until there is an agreement the strike continues."
Red, white and black union banners hung on fences outside the eight entrances to the plant on Thursday and strikers stood at picket lines blocking entry for a second day.
Huge yellow tents were set up at the gates to the plant, offering union members shelter from the sweltering sun.
Thousands of workers walked out on Wednesday morning after rejecting a 4.45 percent salary hike offered by the company.
Union leaders had agreed to the offer but rank-and-file members rejected it and insisted on strike action.
"It is the last resort that the company has forced us to take," said Ruben Gonzalez, a 40-year-old paint sprayer who has worked at the company for 20 years.
LOVE BUG MADE HERE
Nearly 10,000 unionized employees work at the Volkswagen factory, which produces several models, including the New Beetle that is sold in around 80 countries.
The plant was also the last manufacturing site of the classic "Love Bug" Beetle before Volkswagen stopped making the legendary vehicle last year.
Rodriguez said striking workers, seeking a 8.5 percent wage hike, will hold talks among themselves early Friday before union chiefs go back to the negotiating table with management.
VW Mexico spokesman Thomas Karig said the company hoped for a swift end to the strike and shutdown -- slashing production by 1,300 vehicles per working day -- when talks are renewed on Friday.
"Right now the union is in an internal process to agree to a position," Karig said.
The last strike at the plant was in 2001 and lasted for 18 days before the two sides finally reached an accord that gave workers a pay rise of 10 percent.
The plant plans to produce about 235,000 vehicles this year. Its output has slipped in recent years because of a decline in export demand, especially from the United States, and it now produces vehicles just four days a week.
In the first half of the year, Volkswagen exported about 85,000 vehicles from its Mexican plant, making it the third biggest auto exporter in the country after General Motors and DaimlerChrysler.