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Volkswagen to partially idle Mexico plant in July

Automaker Volkswagen will temporarily shut parts of its plant in central Mexico from next week until early August but exports of the popular New Beetle should not be affected, a union spokesman said.

The partial closure, starting Wednesday, will be the latest in a series of temporary shutdowns at the plant in recent months as the global slowdown hurts demand for new cars.

Union spokesman Arturo Monter said by idling some operations at the plant in the city of Puebla, the German auto maker hoped to save jobs while also taking advantage of the drop in orders to make adjustments to assembly lines.

He said about one-third of union workers on assembly lines for the Bora and Bora Variant models would be off work for 14 days. For 10 of those days, their pay would be cut by 50%.

The Puebla plant is Volkswagen's only factory in North America and most of the cars it produces are shipped to the United States, Canada and Europe. About 70% of cars produced across Mexico are destined for the US market, which is suffering its worst downturn in almost 30 years.

Mexico is the world's No. 10 producer of autos but output fell 39.4% in May year-on-year, hit by slumping US demand. The country's plants assembled 108,162 automobiles in May and exported 83,910, industry group AMIA said. (Reuters)