By Christopher Otts

More than 3,000 hourly workers at Volkswagen's assembly plant in Chattanooga, Tenn., would receive raises totaling about 20% over four years under a new tentative deal between the German automaker and the United Auto Workers, according to the union.

The agreement jointly announced late Wednesday by the company and UAW also includes enhanced healthcare benefits and other gains after nearly a year-and-a-half of negotiations. Workers still have to vote to ratify the deal.

For the union, the stakes of its pending agreement with Volkswagen are especially high, as it aims to persuade more U.S. autoworkers in the South to join the UAW.

The union coordinated strikes at several plants owned by Ford, General Motors and Jeep-Ram parent Stellantis -- and won large wage increases -- in 2023. UAW President Shawn Fain sought to quickly follow those victories by expanding union membership inside plants owned by Mercedes, Toyota, Hyundai and other automakers.

"When union workers at the Big Three join together with auto workers in the South, we all win," Fain said after announcing the Volkswagen deal. "This is exactly what our UAW family at Volkswagen has done in this agreement."

"This comprehensive agreement will provide meaningful changes for our workforce," Volkswagen spokesman Michael Lowder said. "All these benefits recognize and reward the hard work and dedication our team members give every day."

The union made a historic breakthrough at the Chattanooga facility in 2024, making it the only auto assembly plant in the U.S. outside of those owned by the Detroit Three to have UAW representation.

The UAW tried and failed to organize workers at a Mercedes plant in Alabama. Since then, the union's effort has stalled.

The Tennessee factory is Volkswagen's only U.S. assembly plant. Workers there assemble gas-powered Atlas sport-utility vehicles and the ID.4, an electric SUV.

A worker at the Tennessee plant's top hourly wage would earn about $80,000 in 2026, including an attendance bonus, before overtime and profit-sharing, the company said last September when describing its offer. The deal also gives workers an immediate bonus of $6,550 and job protections, such as limits to Volkswagen's ability to outsource work and commitments for future products at the plant, the UAW said Wednesday.

Write to Christopher Otts at christopher.otts@wsj.com

(END) Dow Jones Newswires

February 05, 2026 11:04 ET (16:04 GMT)

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