There is fear over the future among employees at the Volkwagen assembly plant in the state of Puebla, but the governor remains optimistic, particularly as the company’s new Audi plant is proceeding as planned.
The German auto maker’s massive emission systems fraud, which allowed vehicle testing to be manipulated and produce results that showed acceptable emissions levels, is expected to result in huge fines, expensive lawsuits and a recall of close to half a million vehicles in the U.S.
In Puebla, the first effect has been the elimination of the Saturday shifts, creating concern about the 15,000 employees that their jobs might disappear at the company’s largest plant outside its Wolfsburg, Germany, headquarters.
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“Volkswagen has messed with everyone,” 29-year-old Alfredo Rodríguez told Bloomberg. He fears that his lack of seniority at the plant where he has worked full time for the past three years makes him more vulnerable.
“What worries me most is not knowing what’s coming,” said the father of two young children.
“They’re going to reduce production,” forecast the head of the Puebla branch of the Mexican Employers’ Federation, Coparmex. José Quintana said governments are nervous because they’ve been betting on the firm, the state’s largest employer, which is currently investing US $1 billion in its new Audi plant.
The company has declined to comment on any changes in Puebla, or a report that hiring has been frozen. Audi is expected to begin production in the second half of next year.
Automotive industry consultant Armando Soto of Kaso Asociados was not optimistic. “This is going to have a snowball effect,” he said, with auto exports falling, triggering a drop in Gross Domestic Product and a slowdown for the Puebla economy.
But Governor Rafael Moreno Valle said hundreds of people hired by Audi are currently enrolled at its training center and there is a waiting list to purchase the new Q5, the vehicle to be assembled at the new San José Chiapa plant.
He told Forbes that no one is currently being laid off, and the company faces sanctions if jobs are not created. Moreno Valle observed that Volkswagen must pay a $55,000 penalty for every job it fails to create under its agreement with the state.
The governor also said other industries are setting up in Puebla, including textile manufacturers and call centers, and that other investments are being sought to further diversify the economy.
Three of the five Volkswagen models with the fraudulent emissions system are built in Puebla.
An investigation is currently under way to determine whether Volkswagen’s vehicles are in compliance with Mexico’s emissions standards, the first results of which are expected within three months.
Reuters reported yesterday that Environment Secretary Rafael Pacchiano said diesel vehicles are being tested first, and that gasoline-powered cars would follow.