United Auto Workers members at Volkswagen AG's assembly plant in Tennessee overwhelmingly ratified a historic first labor pact that locks in higher wages, lower health insurance costs, and stronger job security language for the next four years, the union announced late Thursday.

The result — with 96% voting in favor of the deal — ends a drawn-out contract bargaining fight at the Chattanooga plant that began nearly two years ago. Workers voted in April 2024 to join the UAW, making it the first foreign-owned plant in the South to organize. And earlier this month, union officials said they had finally struck a tentative deal with the automaker, with the final step being ratification this week.

“This victory shows what happens when workers stand up and refuse to be ignored," said Yogi Peoples, a worker at the plant that makes VW's Atlas, Atlas Cross Sport and ID.4 SUVs and member of the union's bargaining committee, in a statement. "We didn’t just win better wages and raise standards at our plant — we forced respect onto the table and got it all in writing."

The new Volkswagen contract could help kick-start the UAW's southern organizing push again, analysts have said, and give a boost to its embattled President Shawn Fain. He has faced recent leadership turmoil and sharp criticism from a federal reform watchdog, and is soon up for reelection.

Two years ago, the UAW was hoping its rich new contracts with the Detroit Three automakers and the quick victory organizing the Chattanooga plant would snowball, and it could get into more factories in anti-union southern states. But the effort mostly fizzled.

Still, the conclusion of the Volkswagen organizing and bargaining push is a notable accomplishment. Fain said in a Thursday statement that VW workers "have moved yet another mountain," and "are leading the way for the entire labor movement and non-union autoworkers everywhere."

Volkswagen confirmed the results of the automaker's first collective bargaining agreement for the plant.

"This milestone reflects our shared commitment to competitive wages, strong benefits, and the long‑term success of our employees and operations," spokesperson Michael Lowder said. "We look forward to building a strong future together in Chattanooga."

The deal includes a compounded 21.6% wage increase over the four-year life of the agreement, plus cost-of-living adjustments. Top hourly wages for production workers will rise by about $7 from their current level to above $39 by the end of the contract. Skilled trades workers' top hourly wages will tick up nearly $9 from the current level, to about $50.

The plant's approximately 3,000 unionized workers will receive a $4,000 ratification bonus and $2,550 bonuses each year for the life of the contract. There are also provisions for profit-sharing, an attendance bonus, and a $50,000 one-time retirement bonus for certain qualifying members.

Health care premium costs will be cut by at least 20%, depending on the plan, the contract says, addressing what the union said was a top worker concern. And the union said it now has job security language that include 80% base pay during temporary layoffs and a voluntary attrition program for indefinite layoffs.

It also secured a commitment that "core work currently performed by UAW-represented employees will not be outsourced" during the contract.

The union held informational sessions on the tentative deal with members earlier this week, and voting took place on Wednesday and Thursday.

Chris Brown, a UAW Local 42 member and part of a large team of members that had participated in the bargaining process, cast the first vote Wednesday, and said afterward he felt "really privileged and honored" to do so "after all of these years of struggle," a video showed. Workers at the plant had tried to unionize and held unsuccessful votes twice, years before the eventual 2024 victory.

The new agreement will take effect Monday and run through Feb. 24, 2030.

"There are a lot of major victories in this tentative agreement," Fain said in a letter to VW members included in a document showing the tentative agreement's highlights. "From massive wage increases, to finally addressing the healthcare crisis at Volkswagen, to ensuring job security for Chattanooga, to winning real enforceable union representation, dignity and fairness on the job, and a voice at work.

"Each of those victories is your victory, won because you ignored the cynics, stood together, and joined the UAW."

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