United Auto Workers and Volkswagen reached tentative agreement Feb. 4 on a historic first contract covering 3,200 workers at the company’s Chattanooga auto plant.
Workers there voted by a three-to-one ratio to join UAW in April 2024. It was the first foreign-owned auto plant in the United States to unionize. Everywhere else in the world, VW factories are union-represented. Volkswagen is the world’s second-largest automaker.
“People said Southern autoworkers could never form a union or win a union contract,” UAW president Shawn Fain said in a press statement announcing the agreement. “Volkswagen workers in Chattanooga said, ‘Watch this.’”
Details of the agreement were reported by UAW and by the magazine Labor Notes. If ratified, the new agreement will raise wages 20% over four years, an increase that works out to about $7 an hour. New hires will start at $23.40 per hour and rise to the top wage over four years. The top rate for production workers will be $39.41 when the contract ends. The contract also provides an immediate $6,550 bonus followed by annual bonuses of $2,550. And the raises come on top of the 11% increase Volkswagen implemented in November 2023 right after UAW won big raises in its strike at the Big 3 — likely in hopes of preventing the union vote.
The contract also improves health insurance coverage and lowers out-of-pocket costs: Premiums will drop from $400 a month to $80.82 for a family on a premier plan, and family deductibles will drop from $1,300 to $900. And it adds two more paid days off and codifies protections against shift reductions and outsourcing.
The four-year raises totaling 20% are below the 24% UAW had been pushing to reach parity with wages at the Big 3 automakers — General Motors, Ford, and Stellantis, but they bring the VW workers closer to their peers at the Big 3.
Ratification was under way as this went to press; if approved as expected, the agreement will run through February 2030.
