UAW Prez Accused of Embezzlement in Federal Documents as Talks Stall on Temps

United Auto Workers President Gary Jones and General Motors CEO and Chairman Mary Barra shake hands during an event on Sept. 3 to officially open contract negotiations in Detroit. (General Motors)

As the strike enters its 19th day, both the UAW and GM are feeling increasing pressure to reach a deal.

Earlier this week, Moody’s credit rating agency warned GM that it would downgrade its credit rating to junk status if a deal isn’t reached soon. Already, General Motors has lost approximately $1 billion as a result of the strike. 

Additionally, car dealerships are putting pressure on GM to settle the strike as many GM car owners are complaining of long waits as they struggle to find repair parts. Auto part supply factories are also losing business as the strike drags on and threatening to start producing parts for other automakers in order to make up losses. 

Likewise, the UAW is facing pressure to settle the strike as workers are beginning to feel a financial pinch as the strike enters its third week.

According to sources within the UAW, the primary issue dividing the union and General Motors at the bargaining table is giving a pathway to permanent status for temporary employees. 

Currently, approximately 8% of GM’s workforce consists of temporary employees, make approximately $16 an hour with inferior health benefits. Additionally, temporary employees receive no profit-sharing checks, which can sometimes amount to $7,000 – $10,000 a year. 

The UAW is still in tough bargaining over making it quicker for second-tier employees to raise wages to the level of first-tier legacy employees. However, many observers indicate that UAW members would be willing to compromise on making the progression to legacy wages faster. 

Additionally, GM has backed off entirely on asking workers to pay more for healthcare than workers are currently paying. 

However, the issue of making temporary employees permanent is a black-and-white issue on which the area for compromise is much smaller. Many temporary employees, despite lacking union protections, have been some of the most active participants in the strike. Their courage has inspired many older workers to fight for them. 

“Being an old-timer, I don’t see a lot of this strike having to do with the older generation,” says Charlie McMillian, a Corvette worker in Bowling Green, Kentucky, “but we got a lot of young people who need this. If a temp gets made permanent out of this deal, it will all be worth it.” 

Additionally, many non-union Southern auto plants like Nissan, Volkswagen, and Mercedes have workforces, where approximately half of the workers are temp employees. If the UAW is successful in eliminating the usage of temporary employees at GM, it could make joining the UAW dramatically more appealing for many temp workers. (see my story “The massive GM strike is energizing a new push among autoworkers in the South”)

The UAW is facing extreme pressure from its membership to deliver as a corruption probe into the UAW widens. 

This week, court documents obtained by the Detroit News show that his former deputy Danny Trull is accusing UAW President Gary Jones of embezzling union funds for personal use.

Another longtime deputy of Jones, UAW Region 5 Director Vance Pearson, also has accused Jones of using union funds to rent private villas, to purchase expensive golf equipment, spend thousands of dollars on expensive cigars, and high-end liquor; spending more than a $1 million dollars on personal luxuries that most UAW members couldn’t afford. 

“These UAW officials have intentionally and fraudulently concealed these personal expenses within the cost of UAW leadership and training conferences to prevent their discovery by the government and the UAW membership,” wrote Labor Department Special Agent Andrew Donohue in documents obtained by the Detroit News. 

The revelation comes as part of a corruption probe that has already brought down 5 top UAW officials for accepting bribes from employers in exchange for concessions at the bargaining table. 

With many UAW rank-and-file members upset over the corruption probe, UAW leadership is feeling pressure to deliver. The UAW has already said that it won’t end the strike until whatever tentative agreement that is reached is ratified in a vote by the union’s 46,000 members; a task that many observers say would be tough without a pathway to giving permanent status to temporary employees. 

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About the Author

Mike Elk
A Sidney-award winning labor reporter, Mike Elk is the founder of Payday Report and also covers labor and immigration for The Guardian. In 2015, he was illegally fired for union organizing as Politico’s senior labor reporter and used his $70,000 NLRB settlement to start Payday. The son of United Electrical Workers (UE) Director of Organization Gene Elk, he lives in his hometown of Pittsburgh He can be reached at Melk@PaydayReport.com

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