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.
Dozens of Telmex's 60,000 union workers gathered outside the company's main office in Mexico City after leaving their posts for the strike, the first since 1985.
Many chanted, "Carlos Slim, get this, the contract is not for sale," as passing cars honked in support.
Workers said that 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 operational and administrative needs.
The union, known as STRM for the Spanish acronym of its name, the Mexican Telephone Workers Union, also said the company has yet to fill nearly 2,000 vacancies that were previously negotiated and wants to change contractual benefits for new hires.
Omar Hernandez, 35, a union representative, said the strike is the 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 that the union went on strike after no agreement could be reached that was "financially viable" for the company. Telmex said it would continue negotiating with the union.
Union leaders on Thursday afternoon asked workers to vote on a proposal mediated by the Labor Ministry that would create a working group comprised of company and union representatives along with government mediators.
The group would aim to find a solution to the dispute within 20 days, according to a document shown on the union's YouTube channel. The proposal did not define a date for ending the strike.
Labor Minister Luisa Alcalde said on Twitter (NYSE:TWTR) that progress was being made towards resolving the conflict, adding she expected an agreement to be reached on Friday.
The union said in an earlier 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.