Cars

Federal Raids of Auto Union Leaders Could Reveal Corruption

Recently, the United Auto Workers (UAW) and Ford began discussions about new contracts. Some of the issues among workers include no health care coverage, poor pay, and few opportunities for advancement and bonuses. Among many things, this is likely due to declining auto stocks and President Trump’s trade war with China. Both have increased the costs of producing cars in America.

Since talks began almost two months ago, terms have still not been reached between the auto union and automakers like Ford, GM, and Chrysler. Talks were delayed further due to the recent federal raid on UAW President Gary Jones’ home. On September 14, the contracts expired, which led to a strike from nearly 50,000 factory workers across the country.

The ongoing investigation

FBI and IRS agents raided Jones’ home at the end of August. Department of Labor officials were also present. In addition to this raid, agents investigated a Missouri office where Jones previously worked, the California home of the former UAW president, a former assistant’s home, and other areas of the union’s operations.

Agents reportedly went through documents and piles of money in Jones’ home. The IRS took multiple boxes for further investigation. Later, the UAW stated that the search warrants were completely unjustified because the union has always provided necessary financial documentation to authorities. No charges have been made against Jones yet.

Past auto union raids

This isn’t the first time the UAW and a Big Three automaker faced contention. In 2017, the FBI investigated the union following accusations from Fiat Chrysler of violating labor relations laws and bribery. Over $200,000 went directly into Jones’ pocket when it should’ve been used for training union members. At the time, Jones denied these claims.

Prosecutors also suspected that the auto union leaders encouraged these corrupt spending practices to influence current bargaining agreements between the union and its employers. Jones said this was false, too. Despite this, many people, including three Chrysler executives and five from the UAW, have been convicted of using union funds for inappropriate reasons.

A retired GM official, Michael Grimes, was also charged with money laundering and fraud. It’s estimated that he received over $2 million due to illicit negotiations between GM and the UAW. Grimes has not contested these charges, and it’s likely he will plead guilty in an upcoming hearing. The result of his actions caused a huge deterioration of trust among union leaders and workers.

Future negotiations

The current strike is predicted to lose GM over $100 million per day in profits. The workers formed picket lines on Monday night at midnight and have continued to strike for nearly three days. The main reason, according to multiple workers, was the 4% coverage of healthcare costs. The average coverage provided by other employers is 34%.

This marks the first strike against GM in 10 years. Following the strike, the automaker immediately extended an olive branch toward the union, stating it would build new plants to provide more jobs. There is at least one new plant in development at Lordstown, Ohio.

GM also stated that health care coverage would increase, along with an $8,000 bonus to each employee after negotiations were finalized. Talks for a resolution are still in progress.