Volkswagen Chattanooga workers get 11% pay raise

Staff photo by Matt Hamilton / Visitors applaud during the launch celebration for the Volkswagen ID.4 electric SUV at the Chattanooga Volkswagen Assembly Plant in 2022.
Staff photo by Matt Hamilton / Visitors applaud during the launch celebration for the Volkswagen ID.4 electric SUV at the Chattanooga Volkswagen Assembly Plant in 2022.

Volkswagen is providing an 11% pay raise for production workers at the automaker's Chattanooga assembly plant, the company announced Wednesday.

The pay hike is effective starting in December, and a compressed wage progression timeline begins in February, the company said in a statement.

"Volkswagen of America annually evaluates compensation for our production team members at the end of the year to ensure we continue to offer a competitive and robust compensation package designed to attract and motivate employees who make our daily operations possible at the plant," the automaker said.

The 11% raise will come immediately and in full, according to VW. Starting wages at the plant are now $23.42 an hour, rising to a maximum of $32.40, the company said.

The compressed wage progression means employees can go from starting wages to topped out wages in a shorter timeline, according to the automaker.

Earlier this year, Volkswagen Chattanooga revealed plans to hire more than 500 additional workers. The Enterprise South industrial park plant employs about 5,000 people. The sprawling factory builds the ID.4 electric SUV as well as the conventionally powered Atlas and Atlas Cross Sport SUVs.

(READ MORE: VW hiring 500 more workers in Chattanooga)

"There's high demand for all of the cars. All three vehicles are doing well," said Burkhard Ulrich, VW Chattanooga's senior vice president for human resources, in an earlier interview.

VW is the latest of the international automakers to unveil raises in the wake of the United Auto Workers winning labor agreements with Detroit Three companies Ford, General Motors and Stellantis.

Toyota said earlier it's raising wages by more than 9%, and Honda announced 11% wage hikes beginning next year. Hyundai said it will give workers in Alabama and Georgia a 25% raise over the next four years.

Like the Chattanooga Volkswagen plant, Toyota, Honda and Hyundai do not operate unionized assembly plants in the United States.

Harry Katz, a professor of collective bargaining at Cornell University, told CBS News earlier the UAW deal is raising pressure on nonunion automakers to retain workers.

"There's also a strong labor market, the companies are doing very well," Katz said. "They've always wanted to stay nonunion, and they try to stay close to the Detroit top-tier wages."

The UAW has tried twice at Volkswagen Chattanooga to organize the plant's production workforce, losing the last time in June 2019 by a margin of 833 to 776.

(READ MORE: Future at Volkswagen eyed amid union loss)

State Rep. Greg Vital, R-Harrison, on Friday said in a statement the additional compensation will benefit families in meaningful ways, especially during the holiday season.

"Not only is Volkswagen a valued employer, but it is also an outstanding community partner through the valuable workforce training programs and support for local nonprofits that it provides," he said.

According to Volkswagen, in addition to the pay raise, production team members already have a quarterly attendance bonus and benefits package.

Volkswagen said it provides matching contributions to employees' 401(k)s, a defined contribution retirement plan and multiple options for medical coverage plans to serve the varying needs of the workforce, including prescription, dental and vision benefits. The company said it provides paid parental leave, a tuition reimbursement program and an employee vehicle leasing benefit for employees and their family members.

Contact Mike Pare at or 423-757-6318.

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