UAW chief quits as GM sues rival, alleging bribery
DETROIT — United Auto Workers President Gary Jones abruptly resigned Wednesday, capping a tumultuous day that saw union leaders move to oust him and General Motors accusing rival Fiat Chrysler in a lawsuit of bribing union officials to get more favorable contract terms from the UAW.
Jones has notified the union that he would retire, his attorney, Bruce Maffeo of New York, said in an email.
The news of Jones came shortly after the UAW’s International Executive Board filed paperwork to expel him and Regional Director Vance Pearson from the union over allegations raised by a federal investigation into union corruption that has resulted in multiple arrests starting in 2017.
Pearson is facing criminal charges; Jones has not been charged, but federal agents raided his suburban Detroit home in August.
Pearson’s status with the union was not clear late Wednesday.
Jones’ departure came just hours after General Motors filed a racketeering lawsuit against Fiat Chrysler, alleging that its crosstown rival got an unfair business advantage by bribing UAW officials.
The unprecedented lawsuit, filed Wednesday in U.S. District Court in Detroit, alleges that FCA was involved in racketeering by paying millions in bribes to get concessions and gain advantages in three labor agreements with the union.
The lawsuit alleges that Fiat Chrysler corrupted the bargaining process with the UAW in the 2009, 2011 and 2015 union contracts to gain advantages over General Motors.
“FCA was the clear sponsor of pervasive wrongdoing, paying millions of dollars in bribes to obtain concessions” from the union, GM General Counsel Craig Glidden said. “FCA’s manipulation of the collective bargaining process resulted in unfair labor costs and operational advantages for it, causing harm to GM.”
In a statement, Fiat Chrysler called the lawsuit “meritless” and said it would defend itself vigorously. It also accused GM of trying to disrupt its proposed merger with French automaker PSA Peugeot as well as ongoing contract talks with the UAW.
“We are astonished by this filing, both its content and its timing,” Fiat Chrysler said. “
Glidden alleged that Fiat Chrysler CEO Sergio Marchionne, who died last year, was a “central figure” in the conspiracy, which was designed to put GM at a cost disadvantage to FCA.
Erik Gordon, a University of Michigan business and law professor, said one company suing another over bribes to union officials is without precedent. While GM’s allegations are believable given what federal prosecutors have already uncovered, it will have the burden of convincing a jury that the scheme actually happened, Gordon said.
GM’s lawsuit also names former FCA labor relations chief Alphons Iacobelli, and former FCA officials Jerome Durden and Michael Brown as defendants. All have pleaded guilty in the federal corruption probe.
Glidden said GM is seeking substantial damages in the case, but he could not give a specific amount. The lawsuit says GM doesn’t seek to reduce wages or benefits of any UAW workers.
Last week, a retired union vice president and former GM board member became the 13th person to be charged in the federal probe of the union and auto companies.
Joe Ashton is accused of receiving millions of dollars in kickbacks from a contractor who made watches for union members. The 58,000 watches are still in storage five years later.
Last month, the union settled with GM after a 40-day strike. Intense talks with Fiat Chrysler began Monday.