Volkswagen workers in Tennessee vote to authorize strike

(Corrects dateline to Oct 29)

By Nora Eckert

DETROIT (Reuters) -Workers at a Volkswagen plant in Tennessee voted to authorize a strike, the United Auto Workers union said Wednesday evening, paving the way for a potential walkout at the Chattanooga facility.

The UAW and automaker have been in contract negotiations for more than a year, after workers there voted 73% in favor of joining the union in April 2024.  

A strike authorization vote gives the union the right to strike, but doesn't guarantee one will happen. 

Volkswagen didn't immediately respond to a request for comment.

"It is a historic first, as the first strike authorization vote at a non-Big Three automaker in the modern era," the union said in a release Wednesday.

The Chattanooga factory became the first auto plant in the South to unionize via election since the 1940s and the first foreign-owned auto plant in the South to do so. Since then, the union's $40 million organizing drive has stalled, following a defeat at a Mercedes plant in Alabama.

Negotiations at the facility, which produces the electric ID.4 and gasoline-powered Atlas SUV, have centered on pay, healthcare and financial benefits such as cost-of-living adjustments (COLA).

About 3,200 workers at the plant are represented by the union, the labor group said.

After the union notched record labor deals with Detroit's automakers in late 2023, Volkswagen joined many other companies in offering their workers a wage bump of 11%. The company's proposed deal would offer an additional 20% wage increase over the four-year contract.

“Our ask is let the employees vote on that," Volkswagen Group of America CEO Kjell Gruner said at a Reuters conference in Detroit on Wednesday. “We are very confident with this offer that our employees would say ‘let’s do this.’”

Employees would also receive COLA for the first time, as well as a $4,000 ratification bonus, according to what the company described as its last and final offer, which was posted to the VW website.

"Volkswagen’s most recent proposal does not include the job security language needed to protect workers from plant closures, outsourcing, or the sale of the Chattanooga facility," the union said in a Wednesday release. 

Many workers have pushed for an equal or better deal than the one ironed out with the Detroit Three automakers in late 2023, which included a 25% wage increase over the life of the contract with Stellantis, Ford Motor and General Motors. 

(Reporting by Nora Eckert; editing by Diane Craft)