UAW Scores Volkswagen Deal in Chattanooga

New contract offers big raise for workers but raises concerns for the automaker

Published on Feb. 19, 2026

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The United Auto Workers (UAW) union has secured a new collective-bargaining agreement with Volkswagen's plant in Chattanooga, Tennessee, marking a major victory for the union as it seeks to organize foreign automakers in the American South. The deal offers significant pay increases for workers, but some experts warn it could create new challenges for Volkswagen.

Why it matters

The UAW has long struggled to gain a foothold in the South, where foreign automakers have resisted union organizing efforts. This agreement in Chattanooga represents a significant breakthrough for the union and could embolden it to target other non-union auto plants in the region. However, the rich contract terms may create financial pressures for Volkswagen as it navigates an increasingly competitive electric vehicle market.

The details

Under the new agreement, Volkswagen workers in Chattanooga will receive substantial pay raises, with some production employees seeing their hourly wages increase from around $23 to $32. The UAW was able to secure these terms by highlighting its recent contract victories with Detroit's Big Three automakers. Volkswagen also agreed not to oppose the union's organizing efforts, likely in an effort to maintain favor with the Biden administration as it distributes electric vehicle subsidies.

  • The UAW notched this victory in Chattanooga two years ago, despite workers there having previously rejected the union twice.
  • The new collective-bargaining agreement was reached in February 2026.

The players

Shawn Fain

President of the United Auto Workers (UAW) union, who is leading the effort to organize foreign automakers in the American South.

Volkswagen

The German automaker that operates a manufacturing plant in Chattanooga, Tennessee, where the UAW has now successfully organized workers.

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What they’re saying

“The UAW has sought to organize foreign-owned auto plants in the South for decades with little success. But it notched a major victory two years ago in Chattanooga, despite workers there having previously rejected the union twice.”

— The Editorial Board (The Wall Street Journal)

What’s next

The new contract terms will likely put financial pressure on Volkswagen as it competes in the electric vehicle market, and the UAW's success in Chattanooga could embolden it to target other non-union auto plants in the region.

The takeaway

The UAW's victory in Chattanooga represents a significant breakthrough for the union in its long-running effort to organize foreign automakers in the American South, but the rich contract terms could create new challenges for Volkswagen as it navigates an increasingly competitive EV landscape.