VW's Mexico producer sees short-term hit from scandal

23rd September 2015, Comments 0 comments

A Mexican state home to a major Volkswagen factory that exports to the United States expects a short-term impact to production following the German firm's pollution-cheating scandal.

It comes just months after a May announcement that the German automaker would invest $1 billion to expand the sprawling plant in the central state of Puebla.

Other manufacturers have also ramped up production in Mexico in recent years, vaulting the country into seventh place among auto-producing nations.

"Obviously a situation like this one will have a short-term impact on sales and export capacity, and, as a result, on production at the Puebla factory," Puebla Governor Rafael Moreno Valle said.

Moreno Valle said he planned to meet Volkswagen executives in the coming days.

The diesel versions of VW's Jetta, Golf and Beetle cars, three of the five models at the center of the current controversy, are produced at the Puebla plant.

The company faces a US criminal investigation and worldwide legal action after admitting that as many as 11 million of its diesel cars are equipped with software capable of fooling official pollution tests.

Moreno Valle said the "regrettable" situation will have "an immediate impact but it can be corrected in the medium term and the company will keep growing."

Workers at the Puebla plant, off for maintenance work on the facility, fear the scandal could jeopardize their jobs.

"We have been looking at the news but we haven't talked with the company," Federico Ruiz Garita, the union's spokesman, told AFP.

Last year, the Puebla plant produced 475,000 vehicles. More than 80 percent were exported, mostly to the United States.

The factory employs 11,000 people and is linked to 35,000 other indirect jobs in the auto parts sector.

© 2015 AFP

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