UAW pres­i­dent steps down as GM sues ri­val over union bribery

Times-Herald (Vallejo) - - NEWS - By Tom Kr­isher

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. The move to oust the two lead­ers would have brought union tri­als for both.

Pear­son is fac­ing crim­i­nal charges while Jones has not been charged but fed­eral agents raided his sub­ur­ban Detroit home in Au­gust.

In the email, Maf­feo said Jones de­cided to step down be­fore learn­ing of the move to oust him.

Jones, who has been a UAW mem­ber for 44 years and started as a fac­tory worker, stepped down to let the union fo­cus on its core mis­sion of im­prov­ing the lives of mem­bers and their fam­i­lies, Maf­feo said.

Pear­son’s sta­tus with the union was not clear late Wed­nes­day. A mes­sage was left seek­ing com­ment from his at­tor­ney.

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. “We in­tend to vig­or­ously de­fend against this mer­it­less law­suit and pur­sue all le­gal reme­dies in re­sponse to it.”

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.

In ad­di­tion to Fiat Chrysler, GM’s law­suit 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, which has al­leged that Fiat Chrysler bribed UAW of­fi­cials to keep them “fat, dumb and happy.”

Au­thor­i­ties have said that pay­ments were made through a train­ing cen­ter jointly run by the com­pany and the UAW. Dur­den han­dled the train­ing cen­ter’s fi­nances, and Brown helped run the cen­ter.

Af­ter leav­ing Fiat Chrysler, Ia­co­belli went to GM’s la­bor re­la­tions depart­ment in 2016. He was sus­pended af­ter his in­dict­ment and fired in De­cem­ber of 2017.

In a sep­a­rate state­ment, the UAW said it had mul­ti­ple safe­guards in place to en­sure the in­tegrity of its con­tracts ne­go­ti­ated with Fiat Chrysler, in­clud­ing re­views by lo­cal and in­ter­na­tional union of­fi­cials.

“We are con­fi­dent that the terms of those con­tracts were not af­fected by Ia­co­belli’s mis­con­duct, nor that of any UAW of­fi­cials in­volved in the mis­use of joint pro­gram funds at FCA,” the state­ment said.

The UAW says it’s com­mit­ted to make what­ever changes are needed to make sure mis­con­duct never hap­pens again.

Glid­den told re­porters that in the three UAW con­tracts, FCA was able to re­duce its la­bor costs be­cause the union al­lowed it to hire more tem­po­rary and lower-paid work­ers than GM.

In 2007, the union agreed that new hires would be paid less than long­time work­ers, set­ting up a “sec­ond-tier” of em­ploy­ees who were paid less. FCA has more sec­ond-tier work­ers than ei­ther of its Detroit com­peti­tors.

The Cen­ter for Auto Re­search, an in­dus­try think tank, cal­cu­lated ear­lier this year that Fiat Chrysler’s to­tal la­bor costs in­clud­ing wages and ben­e­fits were about $55 per hour, giv­ing it an $8 per hour ben­e­fit over GM and a $6 ad­van­tage over Ford.

Glid­den said GM is not su­ing the UAW be­cause it be­lieves that re­spon­si­bil­ity rests with FCA, which was the “or­ches­tra­tor” of the con­spir­acy.

He 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.

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