In April 2024, a majority of workers at Volkswagen’s Chattanooga, Tennessee plant voted to allow the United Auto Workers (UAW) to represent the nearly 4,300 workers there.
The victory was significant for the UAW, as the Volkswagen (VLKAF) plant had two failed attempts to unionize in 2014 and 2019. This victory made it the first foreign-owned automotive plant in the American South to unionize.
Union organizers and supporters sought to unionize the plant in response to the UAW’s contract victories with Detroit’s Big Three in November 2023, noting that a contract negotiated with the union could result in better pay, working conditions, and job security.
Volkswagen ID.4 on the production line in Chattanooga. The United Auto Workers union is yet to successfully negotiate a contract with the automaker for the plant’s workers.
Volkswagen
However, since September 2024, the union and the automaker have been negotiating back and forth to reach a contract that guarantees protections and benefits.
According to a new report by Automotive News, the two still do not agree on certain provisions and demands set by the union.
VW’s latest offer to the UAW includes a 20% raise over four years, bringing wages close to the approximate $42/hour wage that UAW members at Detroit’s Big Three (Ford (F) , General Motors (GM) and Stellantis (STLA) ) will earn in May 2028.
In addition, Vee-Dub is offering cost-of-living adjustment (COLA), annual profit-sharing bonuses, and improved health care benefits.
Though these terms seem to be a lot on paper, they are short of demands brought forward by the UAW. The union calls for retirement bonuses, shift premiums, and increased paid time off; demands that Volkswagen is not willing to fulfill.
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Volkswagen senior director of labor relations and former General Motors labor relations manager Christena Wilson, the lead negotiator for VW, told AutoNews that the German automaker fulfilled about 90% of the UAW’s demands.
She noted that while it is important to keep workers at the plant satisfied, Volkswagen needs an agreement with the UAW that keeps the Volkswagen Chattanooga plant competitive. She added that some demands were not considered due to cost.
“In our latest offer, we were clear with the UAW about the 23 demands that are just not economically feasible for Volkswagen Chattanooga, including demands that go beyond even what the Detroit Three agreed to,” Wilson told AutoNews.
“The UAW has so far refused to withdraw all but one of these demands. It takes two sides making concessions to get a deal done. We are continuing to negotiate and are still hopeful we can reach a deal.”
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However, while these negotiations with the UAW have been ongoing, Volkswagen revealed on March 13 that it would cut a shift at the Chattanooga plant in response to “cautious demands for EVs in the US,” reducing it to a two-shift operation beginning on March 31.
In a statement, VW defended that the move was made in response to sluggish EV demand and is offering production workers a “voluntary attrition program” that includes severance, retirement options, and benefits.
“This decision reflects the need for flexibility and a profitably-run business to support continued investment and growth in the U.S. market,” VW said in a statement. “[…] By consolidating production into a highly efficient two-shift model, we ensure that our operations remain competitive and agile.”
The same day, the UAW said it filed unfair labor practice charges against VW with the National Labor Relations Board (NLRB) for what UAW President Shawn Fain sees as “unacceptable, anti-union, anti-worker, and anti-American conduct.”
Volkswagen ID.4 on the production line in Chattanooga. The United Auto Workers union is yet to successfully negotiate a contract with the automaker for the plant’s workers.
Volkswagen
Labor experts say UAW losing representation rights is possible, but not likely.
NLRB rules dictate that workers can call for a decertification vote after one year after certification of an organizing election if 30% of the workforce signs a petition. For VW workers, that day is on April 30, 2025.
However, labor experts like Cornell University professor Art Wheaton denote that such an event is “highly unlikely” because less than 30% opposed unionizing in last April’s election, and there’s been no sign of growing discontent during bargaining.
In addition, Wayne State University professor Marick Masters is “doubtful” about UAW decertification because VW workers have much more to lose than to gain if they follow through on the scenario.
“The union won by a large margin and is in the midst of contract negotiations that promise to improve the working conditions there. Such a move would be contrary to the best interests of the workers,” he said.
Volkswagen AG is traded on OTC markets in the United States as VLKAF and on the Frankfurt Stock Exchange under the ticker VOW.
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