Volkswagen of America has announced an 11% pay raise for Chattanooga assembly plant production workers.

The increase is effective starting in December and a compressed wage progression timeline begins in February.

"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 in a statement.

"All our production team members also already enjoy a quarterly attendance bonus and an attractive benefits package. The company provides matching contributions to employees’ 401(k)s; a defined contribution retirement plan; multiple options for medical coverage plans to serve the varying needs of our workforce, including prescription, dental, and vision benefits; paid parental leave; a tuition reimbursement program; and an employee vehicle leasing benefit for themselves and their family members."

US operators of non-union plants, mostly in southern states, have been announcing wage hikes since the United Auto Workers (UAW) union reached agreement with the Detroit Three automakers on a new pay deal good until the end of April 2028 which includes a 25% increase in base wages and will cumulatively raise the top wage by 33%, compounded with estimated cost of living adjustments to over US$42 an hour.

The deal included a $5,000 bonus and an 11% immediate pay hike upon ratification. The contract also hiked wages of current temporary workers by 150% by 2028 and would make them permanent employees.

The UAW has promised to step up its long-running campaign to 'organise' the non-union plants such as VW's.