Mexican workers at Carlos Slim's Telmex launch first strike in decades

By Cassandra Garrison

MEXICO CITY (Reuters) -The trade union of Telmex, the Mexican telecommunications firm controlled by the family of tycoon Carlos Slim, went on strike on Thursday for the first time in nearly four decades after failing to reach a deal with the company, the union said.

Telmex's 60,000 unionized workers were set to walk out, a union representative said, adding that employees had begun hanging red and black flags outside Telmex offices to designate the start of the strike, its first since 1985.

Dozens of workers gathered outside the company's main office in Mexico City after leaving their posts, many chanting, "Carlos Slim, get this, the contract is not for sale," as passing cars honked in support.

Omar Hernandez, 35, a union representative, said the strike is a culmination of years of tension over disagreements in which he said the company disregarded the interests of workers.

"The company isn't changing its attitude," he said.

Telmex, a unit of Slim's America Movil (NYSE:AMX), said in a statement the union launched the strike after no agreement could be reached that was "financially viable" for the company. Telmex said it would continue negotiating with the union.

Workers said the negotiations broke down over a series of issues they said violated a collective bargaining agreement, including outsourcing work, the exclusion of union members from new Telmex projects and a lack of investment to cover main operation and administrative needs.

The union also said the company has yet filled nearly 2,000 vacancies that were previously negotiated. Telmex also wants to change contractual benefits for new hires, the union said.

Two hours after the strike began, Labor Minister Luisa Maria Alcalde said on Twitter (NYSE:TWTR) she expected the company and union to come to an agreement in "the coming hours."

The union, known as STRM for the Spanish acronym of its name, the Mexican Telephone Workers Union, said in a statement that Telmex used "coercive measures" while negotiating some aspects of the contract.

The union reached a deal last month for some workers to receive 4.5% raises.

The union for automaker Volkswagen (ETR:VOWG_p) in Mexico on Wednesday agreed on 9% raises in a one-year contract covering 12,000 workers, after talks in which the union said it stressed rising inflation.

Inflation recently accelerated to a level not seen since early 2001, with consumer prices rising 7.99% in the year through June.