In a historic vote, Tennessee Volkswagen workers get their first union contract

On April 19, 2024, workers at Volkswagen’s Chattanooga, Tennessee, assembly complex approved the plant’s first union contract with the United Auto Workers, winning immediate bonuses, a scheduled wage climb and new job-protection language. After earlier referendum defeats in 2014 and 2019, the plant voted to unionize in 2024 and approved the contract by an overwhelming margin: 96% of votes cast were in favor. The tentative agreement, reached between UAW and Volkswagen in early February, includes pay increases phased through the life of the agreement, stronger layoff protections and reduced health-care costs, and takes effect the Monday after ratification.

Key takeaways

• The ratification vote returned a 96% approval from bargaining-unit members, finalizing a tentative deal struck in early February.
• Workers will receive a $6,550 one-time bonus when the contract takes effect and a 20% wage increase over the contract term ending in February 2030.
• By February 2030, top production pay will be $39.41 per hour and top skilled-worker pay $49.86 per hour; cost-of-living adjustments are additional.
• Health-insurance premiums are reduced by roughly 20% and are locked from increases for four years under the contract.
• The agreement adds two paid days off and requires Volkswagen to consult the union before making layoffs and to maintain plant operations through the contract period.
• UAW membership dues are set at a minimum of 1.44% of monthly pay; Tennessee’s right-to-work law allows workers to opt out of paying dues without being fired.
• The plant’s 2024 union vote originally passed with 73% support; previous elections in 2014 and 2019 had rejected unionization.

Background

The Volkswagen assembly complex in Chattanooga had previously voted against joining the UAW in 2014 and 2019, reflecting a long-standing pattern in the U.S. South where nonunion foreign-owned auto plants expanded in exchange for large state incentives. That dynamic — significant public subsidies paired with competitive wages meant to deter union drives — helped keep the region largely nonunion for decades.

The UAW’s recent successes against the Big Three automakers and a targeted investment in organizing the South helped change momentum. The union launched a roughly $40 million campaign aimed at Southern plants, and the 2024 Chattanooga election, which produced a 73% pro-union result, became an early test of whether those efforts could stick outside the traditional union strongholds in the North.

Main event

Negotiations after the 2024 union election stretched for months and at one point included a union-authorized strike option. The parties reached a tentative agreement in early February addressing wages, benefits and job-security language; Chattanooga workers voted to ratify that deal on April 19, 2024, and the contract went into effect the following Monday with a $6,550 bonus paid immediately.

Under the deal, base wages rise by 20% across the contract’s term through February 2030. The contract sets top production pay at $39.41 per hour and top skilled-worker pay at $49.86 per hour by the contract’s end, not counting cost-of-living adjustments also provided. Health-care premiums will be cut roughly 20% and held steady for four years, and workers gain two additional paid days off.

Crucial to finalizing the agreement was strengthened language on job security. Volkswagen agreed to consult the UAW before layoffs and committed to keeping the Chattanooga plant open and sufficiently staffed for production through the life of the pact — commitments bargaining committee members said were necessary for worker confidence in the long term.

Analysis & implications

The Chattanooga contract is a rare UAW victory in the Sun Belt: it is not at one of the Big Three automakers and is located in a state with right-to-work laws. That combination makes the deal both symbolically and strategically important for the union’s growth plans. The concrete wage and benefit improvements give the UAW a clearer sales pitch in future drives at foreign-owned Southern plants.

Economically, the agreement tightens the gap between wages at unionized plants and the competitive pay Southern nonunion employers have offered to dissuade organizing. For recruiting purposes, the UAW can now point to a package that includes immediate cash, multi-year pay increases, lower health costs and added job protections — elements that may resonate where prior outreach emphasized ideological arguments more than tangible gains.

Politically, the pact arrives amid a shifting federal and state landscape. Tennessee’s right-to-work rules and recent national-level regulatory changes affecting electric-vehicle incentives and emissions policy alter automakers’ calculus; Volkswagen cited constrained margins tied to EV investment and changing federal incentives during bargaining. The outcome could slow or accelerate other campaigns depending on local dynamics and employer responses.

Comparison & data

The table highlights how the Volkswagen contract positions Chattanooga pay above a recent nonunion benchmark: Hyundai announced a phased 25% wage increase through 2028 that reaches a top production rate of $36.02 per hour, about seven cents less than Volkswagen’s projected production top rate in the contract year cited. The VW agreement therefore narrows or overturns the wage bridge employers have long used to discourage unionization in the region.

Reactions & quotes

“Today you showed the world Southern autoworkers are ready to fight.”

Shawn Fain, UAW President

UAW leadership framed the vote as proof that Southern plants can win union contracts with substantial gains. The union emphasized the contract’s pay, benefits and protections as a model for other organizing drives.

“These benefits recognize and reward the hard work and dedication our team members give every day.”

Volkswagen spokesperson (company statement)

Volkswagen’s communications highlighted the deal as balanced recognition of employee contributions while signaling a willingness to commit to the plant’s operations through the contract term.

“It’s very important for us and for the company to show to the workers that they are committed to this city.”

Tony Bodewes, bargaining committee member

Bargaining committee members credited stronger job-security language with overcoming a negotiation impasse and securing worker confidence that the plant will remain in Chattanooga through the life of the agreement.

Unconfirmed

• Whether Volkswagen’s production commitments will fully prevent any future plant retooling or reduced shifts beyond ordinary business adjustments has not been independently verified.
• The precise impact of this Chattanooga contract on union drives at other Southern plants — beyond providing talking points — remains uncertain and will depend on local bargaining outcomes and employer responses.
• Longer-term effects on regional investment decisions by automakers in the face of changing federal EV incentives and tariffs are still unfolding and not yet quantifiable.

Bottom line

The Chattanooga ratification is a concrete, high-profile win for the UAW in the South: it secures immediate pay and benefit improvements, job-protection language and a notable one-time bonus for workers. Those elements make the agreement a persuasive example for organizing advocates seeking to expand the union’s footprint in states that have long resisted unionization.

At the same time, this victory does not guarantee a wave of successful elections across the region. Political, legal and market headwinds — from right-to-work rules to shifting EV incentives and the strategic responses of automakers — will shape whether the Chattanooga package becomes a template that other plants adopt or an isolated success. Observers should watch upcoming bargaining outcomes and employer tactics to judge how far the deal’s influence will travel.

Sources

• NPR (news report summarizing the vote, company statements and union comments)