Workers at a Volkswagen AG plant in Chattanooga, Tennessee, approved a labor agreement negotiated by the United Auto Workers (UAW) with 96% support in a vote held on Thursday. This marks one of the most significant victories under UAW President Shawn Fain's leadership.

The Southern United States has long been a challenging region for union organizing. Since his election as UAW president in 2023, Fain has prioritized efforts to unionize factories across the South and nationwide.

Under the four-year agreement, employees will receive a 20% wage increase, along with improved healthcare benefits and job security.

"Volkswagen workers have overcome another major hurdle," Fain said in a statement.

The union's campaign at Volkswagen aimed to match the substantial gains made in Detroit in 2023, when Ford, General Motors, and Stellantis NV agreed to a 25% wage hike and cost-of-living adjustments following a six-week strike.

The UAW and Volkswagen spent approximately 18 months negotiating the terms of the contract for the company's sole U.S. plant, which produces the ID.4 electric SUV. A tentative agreement was reached earlier this month.

Volkswagen stated, "This milestone reflects our shared commitment to competitive wages, strong benefits, and the long-term success of our employees and operations."