Dive Brief:
- The UAW has announced a historic tentative agreement with Volkswagen of America that will unionize roughly 3,200 workers at its Chattanooga, Tennessee assembly plant, the union announced in a press release Wednesday.
- Plant workers in Tennessee will receive a 20% across-the-board wage hike, an immediate $6,550 ratification bonus and annual bonuses of $2,550 for the life of the contract. The deal also offers lower out-of-pocket health care coverage and increased job security. Workers at the plant will now proceed with a formal ratification vote to join the UAW in the coming weeks.
- “For years, Chattanooga workers were told to settle for less while Volkswagen made record profits,” said UAW President Shawn Fain in a statement. “So, the workers stood together and won their union—and now they’ve secured a life-changing first agreement.”
Dive Insight:
The historic contract between Volkswagen and the UAW also establishes the first-ever cost-of-living allowance (COLA) at the plant. It also gives workers legally binding protections against outsourcing, shift reductions and unilateral job cuts, per the UAW.
The union will also work to create a safer work environment for its members at VW’s assembly plant, including enforceable safety rules with dedicated UAW representatives.
The Tennessee plant currently assembles the electric Volkswagen ID.4 and the Atlas and Atlas Cross Sport SUVs for the U.S. market.
The agreement comes after nearly two years of organizing efforts by workers at the plant. Workers voted 3-to-1 to join the UAW in April 2024. After the plant workers voted to join the UAW, they elected a 20-member negotiating committee to hash out details of a favorable deal with Volkswagen.
Fain had been outspoken and criticized the automaker in the past for not paying its workers higher wages. He visited the plant in March 2025 to rally support after parent company Volkswagen Group reported $20.6 billion in profits in 2024, arguing that its factory workers in the U.S. deserved a larger share of the company's financial success.
Fain and the UAW also ramped up pressure on other automakers assembling vehicles in the U.S. after it secured historic wage gains for its members working for the Detroit Three in November 2023.
Following that deal, the union launched a nationwide campaign to organize roughly 150,000 nonunion autoworkers at over a dozen plants operated by Honda, Hyundai, Mercedes-Benz and Toyota.
In February 2024, the UAW announced it would commit $40 million through 2026 to support unionization efforts around the U.S. The initiative was supported by workers at other major automakers as well. More than 30% of workers signed union cards at Hyundai’s assembly plant in Montgomery, Alabama, and at Toyota’s engine plant in Troy, Missouri.
Volkswagen presented a final offer to the UAW in September 2025 after negotiating with the union and Tennessee plant representatives for nearly two years.
The automaker’s proposal included a 20% wage increase, a first-ever cost-of-living allowance, a $4,000 ratification bonus, reduced health care costs, additional paid time off, including holidays, and other perks requested by the plant’s workers. It also included a new top hourly base wage of $34.02, with incremental increases each year through 2029.
Volkswagen also said it supports the deal reached with the UAW.
“This comprehensive agreement will provide meaningful changes for our workforce, including increased wages, reduced health care costs, and more paid time off,” Volkswagen said in a statement confirming the deal. “All these benefits recognize and reward the hard work and dedication our team members give every day.”
Fain is touting a historic win for the UAW and American workers in the deal it reached with Volkswagen. In its press release, the UAW said the Chattanooga victory signals a profound shift in the Southern auto industry, “as workers across the region stand up to global corporations (and) demand their fair share.”
"People said Southern autoworkers could never form a union or win a union contract. Volkswagen workers in Chattanooga said, ‘Watch this,’” said Fain.
