Volkswagen and UAW Reach Tentative Contract Agreement in Tennessee

Volkswagen-UAW Agreement Overview

By Nora Eckert

Key Terms of the Agreement

Feb 4 (Reuters) - Volkswagen and the United Auto Workers reached a tentative agreement on their first contract at a plant in Tennessee, nearly two years after workers voted in favor of joining the labor group, the union said Wednesday evening.

Impact on Workers

The agreement provides workers with a 20% pay increase over the contract, as well as improvements in healthcare and job security, the union said.

Unionization Efforts in the South

"They’ve secured a life-changing first agreement,” said UAW President Shawn Fain in a statement. 

"This comprehensive agreement will provide meaningful changes for our workforce, including increased wages, reduced health care costs, and more paid time off," Volkswagen said. Workers will now vote on whether to ratify the labor pact.

Workers at the plant voted 73% in favor of joining the union in April 2024, making the Chattanooga factory 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. The UAW narrowly lost votes at the same plant in 2014 and 2019.

Fain has aimed to unionize auto plants across the nation from automakers including Toyota and Tesla. His organizing drive has slowed following the win at Volkswagen, with a loss at a Mercedes plant in Alabama. 

The UAW president led a strike across Ford Motor, General Motors and Stellantis' plants in late 2023, clinching a 25% wage increase for workers. Workers at the Volkswagen plant had signaled they wanted similar gains in their talks with the company. 

(Editing by Nivedita Bhattacharjee and Christian Schmollinger)