UAW talks with VW over first contract could be long, contentious

Contract negotiations that began Sept. 19 between the UAW and Volkswagen and could be just as contentious as last fall's talks with the Detroit 3 — and potentially last even longer.

The union is seeking its first contract for roughly 4,300 workers at VW's plant in Chattanooga. It's likely to resemble pacts with Ford Motor Co., General Motors and Stellantis with respect to wages, health care, vacation time and other benefits. But experts said reaching a deal, even though it needs to cover only a single plant instead of dozens, could be tricky because the two sides are starting fresh.

"You're addressing lots and lots of issues, and you need to be sure you're in sync with what the workforce wants but also have to negotiate with the company," Stephen Silvia, a professor at American University, told Automotive News. "There's a substantial number of little things, but big things as well. Questions like pensions, paid time off, supplemental unemployment benefits — there's a long list of things that are settled with the Detroit 3. Here, you have to build a contract from scratch."

Union officials said profit-sharing, cost-of-living adjustments, retirement security, affordable health care and the elimination of tiered wages are top priorities. UAW President Shawn Fain has tapped Vice President Chuck Browning — a veteran negotiator who oversaw last fall's talks with Ford and in the last three years secured lucrative deals with John Deere, Caterpillar and Case New Holland — to represent the union at the table with VW.

At a Sept. 15 rally in Tennessee, Browning suggested the negotiations would be tough.

"You've seen a certain kind of battle, and you've seen the kind of fight Volkswagen can mount," he said, referencing two previous failed organizing attempts in which the company waged aggressive anti-union campaigns. "Make no mistake, that fight is coming. It's going to take everything we've got."

VW production workers earn $23.40 to $32.40 per hour, according to the company. The top wage is roughly $5 less than what veteran production workers at Ford make today, according to the UAW, including a cost-of-living adjustment won last fall. Pay for Detroit 3 workers is set to top out above $40 per hour by 2028.

VW workers do not receive profit-sharing checks as Detroit 3 workers do, but those who meet attendance requirements get yearly bonuses worth 8 percent of their salary.

VW covers 84 percent of its employees' health care costs and said production workers pay less than $2,000 per year in premiums. While above average for most U.S. workers across any industry, that's not as lucrative as the Detroit 3 health care plans that cover up to 97 percent of costs.

VW said it contributes up to 9 percent of employee pay annually to retirement accounts. The Detroit 3 last fall agreed in negotiations to increase annual retirement contributions to 10 percent.

The UAW could push for other benefits that are in its Detroit 3 deals, experts said, such as a neutrality or card-check pledge to make organizing future plants easier.

And while VW might match much of what the Detroit 3 offers, Marick Masters, a labor relations expert at Wayne State University in Detroit, said the union may not be able to win everything it wants in its first attempt.

"Parity is going to be the ultimate goal," Masters said, "even if it has to be reached over a period of time."

First contracts can be difficult.

The Economic Policy Institute said a number of studies have found that a majority of unions fail to get a contract within a year of being recognized by an employer.

Silvia said the negotiations could take longer than what's common with the Detroit 3, with talks typically heating up around Labor Day and finishing before Thanksgiving. That's because the expiration of the previous contract is an impetus to either reach a deal or begin a strike. Since no such date exists for VW, there's no telling how long negotiations could last.

While both sides have expressed a commitment to reach a deal quickly, there's some added motivation for the union to not drag it out.

If there's no contract one year after the April election that the UAW won in Chattanooga, decertification by the National Labor Relations Board could be requested if at least 30 percent of the workforce signs a petition. While that is highly unlikely, Silvia said, it is a possibility the UAW must be cautious of.

Still, he said, it would not be surprising if negotiations dragged into 2025. "There is no fixed deadline. They have to do a lot more, and Volkswagen, at this point, given what's going on in Germany, could make an argument about limited means," Silvia said.

The talks come at a challenging time for VW Group on a global scale.

In early September, the automaker said it was scrapping a 30-year-old job security agreement with Germany's powerful labor unions and considering plant closures in its home country. The group's Audi luxury brand also has warned it might end production at a plant in Brussels.

VW has not closed a factory since 1988, when it shut its first-ever UAW-represented facility, in Westmoreland, Pa.

"What is happening [in Germany] will have very little, if no, bearing on our contract negotiations as we enter in with the UAW," a VW official said. UAW members were in Wolfsburg, Germany, this month as part of the automaker's annual convening of workers, the official said.

Securing a good contract could give the UAW some momentum following a difficult spring and summer.

The union is threatening to strike Stellantis after layoffs and changes to future product plans, and a federal watchdog is investigating Fain's decision to strip assignments from two union board members.

After its historic organizing victory at VW in April, the union lost a similar election at an Alabama Mercedes-Benz plant in May and has not announced any progress with other automakers it's attempting to unionize.

A lucrative deal at VW could embolden workers at companies where organizing drives have stalled, Masters said. He thinks Browning is the right choice to make that happen.

"I think he realizes the stakes are high and he has to deliver," Masters said. "He's one that will really focus on getting the job done and getting the best deal he can for the members."