UAW Announces Tentative Agreement with Volkswagen in Chattanooga

Read our editorial on the significance of strikes here and a history of the UAW’s Great Sit Down Strike here.

On February 5, the United Autoworkers (UAW) and Volkswagen (VW) in Chattanooga, TN reached a tentative contract agreement, marking the first time a union deal in the South has been cemented outside of the US Big Three Automakers (General Motors, Ford Motor Company, and Stellantis North America).

Workers at the VW plant organized nearly two years ago, becoming the first auto workers in the South to unionize under UAW in a National Labor Relations Board (NLRB) election since the 1940s.

The contract covers 3,200 autoworkers at the Volkswagen plant and includes a 20% wage increase, lower healthcare costs, paid time off, annual bonuses of $2,550 for the life of the agreement, and an initial $5,550 bonus for all workers at the plant. The contract has language against job cuts, shift reduction, and forced overtime, and includes the right to strike over unsafe company practices, though not the right to strike over contract enforcement.

If ratified, the agreement expires 2030 rather than the May 1, 2028 date of the UAW’s “Big Three” contracts. It faces a ratification vote this month by the rank-and-file.

The 20% wage increase was rejected by UAW workers and leadership as “too little” in October of last year, with workers voting in favor of a strike then in response to VW’s offer at the time.

Despite the rank-and-file support, the strike never took place. In the lead up to the strike vote last year, workers expressed their desire for more pay. “We should be making more than what we make because Volkswagen is a big industry, they’ve got money to buy all big threes”, Letonja Berry, an assembly logistics worker at the Chattanooga plant, told monopoly media at the time.

In 2024, Volkswagen paid out $3.72 billion in dividends to shareholders according to the company’s 2024 annual report, and annual profits in 2024 stood at $20.6 billion, standing as the world’s second largest automaker.

The tentative agreement comes after Volkswagen’s layoffs at the plant in March last year, which workers at the time described as company intimidation against fighting for a good contract.

The UAW is focusing on unionizing auto plants across the South since their “Stand Up” strike against the Big Three automakers in 2023. This focus is in line with the US auto industry shifting from its historic hub in the Midwest to Southern states, specifically Alabama, Arkansas, Georgia, Kentucky, South Carolina, Tennessee, Texas and Mississippi.

This shift is due in large part to lower labor costs, tax incentives and Right-to-Work laws which frustrate and restrict the independent initiative of the workers to organize at all and, when they can, they are hemmed into the business unions.

In addition to economic incentives, weak labor laws, and low wages, the South provides access to ports and a favorable logistical setup for supply chains for overseas export. While the Midwest remains the hub of the auto industry, the Southern “auto belt” has become the primary location for new manufacturing, employing over 200,000 workers in the region and comprising 37% of the industry’s Electrical Vehicle battery production.

Image: UAW President Shawn Fain announces a tentative agreement on behalf of autoworkers at Volkswagen’s Chattanooga, Tenn. Plant.

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