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Union corruption and what should be done about it—Part II

Deja vu all over again

Image courtesy of Brown Dog Welding.

Let’s separate the tangible events I experienced from the rumors I heard during the seven years I worked at Chrysler.

What I experienced firsthand: There was lack of funding for training and apprentices; our training budget was cut, and Chrysler did not hire nearly the number of apprentices covered in the contracts under which we worked. The alternative work schedule (AWS) was shoved down our throats, despite the rank and file voting no. Family members of union officials were pulled up into well-paid appointed positions. UAW rules for seniority and plant rights were ignored during plant layoffs.

The rumors: National Training Center (NTC) funds were being misappropriated. The union and company awarded contracts to businesses owned by United Auto Workers (UAW) officials’ family and friends. Job applications were being sold by UAW officials, and payoffs were made to officials in exchange for the UAW pushing through the company’s agenda.

Why should we give credence to the rumors, and why should you believe my experiences? Because despite coming a decade earlier, they mirror the issues spelled out in the Department of Justice’s indictment1 of both UAW and Fiat Chrysler Automobile (FCA )officials and the 2013 FBI investigation into the UAW selling job applications.

Additionally, there was a rift in 2011-2012 over the AWS implementation at Warren Truck Assembly Plant (WTAP) that FCA, backed by then UAW Vice President General Holiefield’s muscle and the fact that technically they were still working under the terms of the government bailout, pushed through against the workers’ approval. Holiefield, much like “Big” John Willams (UAW Local SI president) did while I was at Mack Avenue Engine Plant 2, exacerbated the situation by insisting that he held the power, and the workforce needed to abide under his rule.

After the ensuing protest, Holiefield arranged for FCA to fire the handful of workers who organized a protest, a complete misuse of power. Officially, you’ll never see that entire story, because all but one of them bowed to the financial pressures of not having a job and caved to UAW/FCA demands that they admit wrongdoing, shut up, and get back to work.

Officially, only Alex WasseL, one of the protest organizers, was fired, because he had the money and the stubbornness to hold out. After a long legal battle, he won his job back and then retired.2

When word started leaking last year that the Feds were involved and the initial amount of stolen money was in the hundreds of thousands, I stated on Facebook that this was the tip of the iceberg, that “this investigation will go as far as they (the FBI) want it to go.”3 The next report was 1.2 million. Now it’s $4.5 million (or into the hundreds of millions if you include the recently filed class action suit). This was money earmarked for training—for preparing the next generation of tradespeople and keeping the current generation of workers sharp. Or as FBI Special Agent in Charge David P. Gelios more aptly put it, “The funds misapplied deprived working men and women of critical workforce and professional development opportunities …”4 Instead, the money was funneled through fake hospices and children’s foundations and phony businesses and used to pay for Ferraris, personal mortgages, $40k Montblanc “Honest Abe” fountain pens, designer shoes, pools, vacations, and God knows what else.5

If the culpable parties are dead or going to jail, why do I care? Because it’s been going on far longer than either the UAW or FCA will admit, and mark my words, there are more thieves to catch. Both FCA CEO Sergio Marchionne and current UAW President Dennis Williams have emphatically attempted to convince employees, union members, shareholders, and others in the court of public opinion that this recent scandal is the work of a few rogue employees looking to get rich, and it in no way affected the negotiations of contracts. But the Department of Justice isn’t in the business of dropping investigations based on bluster. I expect more indictments.

Special Agent Gelios added that the indictment “exposes a disturbing criminal collaboration that was ongoing for years between high-ranking officials of FCA and the UAW,” which “calls into question the integrity of contracts negotiated during the course of this criminal conspiracy.”10 So much for the contracts not being tainted. Now there is blood in the water.

There’s an additional lawsuit brought forth by former UAW workers at the Toledo Jeep plant accusing Holifield and Labor Negotiator Alphons Iacobelli of excluding their local representation and conspiring to push them out in order to bring in cheaper labor.7 At WTAP, individual skilled trade workers have begun filing complaints with the National Labor Relations Board, as the UAW (according to FCA WTAP management) will not allow them to transfer to SHAP (Sterling Heights Assembly Plant) with the move of Ram 1500 production, despite the contract demanding it. Again, the UAW isn’t supposed to direct manpower. This is what happens in a culture where backroom deals are the norm.

Then there’s the potentially nine-figure class action suit filed by workers against the UAW: "The conspiracy ... has resulted in tens if not hundreds of millions of dollars in union dues not being used for the intended purpose: bargaining for the benefit of the union members."8

The Solidarity House (UAW headquarters) has implied that there are just too many moving parts at the bargaining table, too many checks and balances in place for a few bad apples to spoil the contracts as a whole that cover FCA, GM, and Ford. Unfortunately for them, the FBI is not taking their word for it. Remember the shock when FCA was chosen to lead negotiations in 2015? With Holiefield gone, I guess they would be the most vulnerable.9

Or maybe they’re all just dirty. Many Big 3 workers still don’t understand how the UAW allowed for the two-tier wage systems, which drastically lower worker compensation, and some at Ford still believe there was foul play involved during the 2015 contract vote.10 These instances and more have led the corruption investigation to dive into Ford and General Motors, specifically their training funds, as well.11

Iacobelli left FCA for GM in 2015, so that’s of interest. Also under investigation are Joe Ashton , a retired UAW vice president and a member of GM’s board; Cindy Estrada, the UAW/GM negotiator; and UAW VPs Jimmy Settles and Norwood Jewell. According to the Detroit News, all are heads of nonprofits that bring in millions of dollars.12

My anger toward the corruption of the UAW’s FCA faction (and probably more) is not a case of hindsight is 20/20. We all saw it happening over the last two-plus decades. How about a quote from a worker at WTAP, from six years ago: “The UAW International doesn’t work for us. Holiefield got married in Italy, I can’t even afford a cruise to the Caribbean. Maybe Fiat paid for the wedding. Somebody had to.”13 Many of those who have been outspoken against the FCA/UAW collusion now are finally being heard.

A Rocky Road to Recovery

But what’s the solution? Beyond the guilty losing their jobs and getting jailed? There is an attitude of fraud and entitlement that has been trending in this direction for quite some time, and not just at FCA. Wiping out the union entirely would leave a huge void, but perhaps that is a lesser evil than keeping the infected structure in place.

Or maybe it stays, but the government sets up an oversight committee, at least in the interim, and gives the UAW, or it’s replacement, time to regroup. And if that happens, I can propose several changes that need to be made immediately.

For starters, appointed positions need to go. Every position at every level needs to be voted on. There needs to be more transparency in both the voting process and the Solidarity House, or whatever replaces the Executive Board.

Also, in my opinion, the “new” UAW needs to hire trained killers to negotiate all of our new (very transparent) contracts. I’ve said this since I first was hired. The idea of a young line worker running for steward, then becoming a committeeman, then winning the presidency of a local chapter, then getting appointed to an international position and residing in the Solidarity House, then somehow rising to the point at which he can negotiate billion-dollar deals is absurd. Not to mention most of them are currently under federal investigation. Let the workers work and represent them with the best lawyers union dues can buy.

As stated previously, I feel strongly that we need organized labor. The laws protecting America’s workers, whether they’re in a union or not, were paid for with the blood, sweat, and dues of union rank and file. I don’t think wiping them out is the solution any more than I think dissolving an automotive manufacturer is the answer to cleaning up the industry side.

Whatever happens with this case, with these investigations, the results are not going to be pretty. Bad people are going to pay dearly, but we’re all going to suffer for the sins of a few. The collateral damage will be severe. At this point my hope is that we can somehow learn from these mistakes and build a more transparent system. A strong democratic process that prevents these horrific acts of greed is needed to build a new, honest, and trustworthy union that will truly protect the American worker.

1https://www.justice.gov/usao-edmi/press-release/file/984601/download
2http://wardsauto.com/industry/late-uaw-vice-president-leaves-tarnished-legacy
3https://www.facebook.com/search/str/uaw/keywords_blended_posts?filters_rp_author=%7B%22name%22%3A%22author_me%22%2C%22args%22%3A%22%22%7D
4https://www.justice.gov/usao-edmi/pr/former-fca-executive-and-wife-former-uaw-vice-president-charged-scheme-pay-uaw
5http://www.detroitnews.com/story/business/autos/2017/09/19/fake-hospice-laundered-cash-fca-uaw-scan dal/105799814/
6https://www.justice.gov/usao-edmi/pr/former-fca-executive-and-wife-former-uaw-vice-president-charged-scheme-pay-uaw
7http://www.toledoblade.com/Automotive/2018/01/16/Ex-Jeep-paint-shop-employees-sue.html
8https://www.freep.com/story/money/cars/chrysler/2018/01/29/fca-uaw-corruption-union-dues/107.5362001/
9https://www.freep.com/story/money/cars/general-motors/2015/09/13/fiat-chrysler-lead-company-uaw-contract-talks/72091592/
10https://www.wsws.org/en/articles/2017/05/09/uaw-m09.html
11https://www.freep.com/story/news/2017/11/02/uaw-scandal-gm-ford/824911001/
12http://www.detroitnews.com/story/business/autos/general-motors/2017/11/02/uaw-training-center-investigation-expands-big-detroit-three/107251546/
13https://www.wsws.org/en/articles/2012/11/shif-n30.html