The General Motors lawsuit accusing Fiat Chrysler Automobiles and its predecessor entities of corrupting labor negotiations as far back as 2009 is a bombshell, but several labor experts say its impact on current bargaining between the UAW and FCA could be limited.
That’s not to say the allegations in the 95-page complaint filed Wednesday in federal court, naming FCA, Alphons Iacobelli, its onetime lead labor negotiator and a convicted felon, among others, won’t make the task of ratification harder. But it’s not clear the issues raised, many already suggested by the ongoing federal corruption probe, will be a deciding factor. Iacobelli, interestingly, was hired by GM following his unexpected retirement from FCA on the eve of 2015 contract bargaining.
The UAW, which has been buffeted by corruption allegations since the federal investigation burst to light in 2017, has already secured new contracts with GM and Ford, so the pattern established with those automakers sets certain expectations.
“FCA UAW workers have seen the pattern at GM and Ford and would have a difficult time accepting something that is really out of step already. I don’t know if this changes that that much,” said Kristin Dziczek, vice president of industry, labor and economics at the Center for Automotive Research in Ann Arbor. “No question this brings more light to this ongoing problem between FCA and the UAW, and it makes this task of getting a contract and getting it ratified more difficult.”
The scandal initially focused on the misuse of training center money, but has expanded to cover a wide range of corrupt activities, apparently prompting the resignation on Wednesday of Gary Jones as UAW president. Jones, along with predecessor Dennis Williams, Region 5 Director Vance Pearson and numerous other ex-UAW and FCA officials, have either been implicated or charged (Jones and Williams have not been charged). To date, 13 people have been charged and more criminal charges are expected.
Sergio the puppet master
GM raised the stakes by calling out FCA’s former CEO, the late Sergio Marchionne, in its suit this week, as a kind of puppetmaster for allegedly corrupting labor talks to gain an advantage and force a merger between the two automakers, which never came to pass. FCA called the case meritless, saying that GM was trying distract from its own problems.
But the corruption case is not new, even if allegations against Jones and others ramped up considerably in recent weeks. Jones, for example, identified as UAW Official A in court papers, is accused of splitting $700,000 in union money with another official and had more than $32,000 seized from his house in Canton, west of Detroit, during a raid this summer.
Workers who have spoken with the Free Press about contract talks are fully aware of the scandal and do not hesitate to express their frustration over it. Many have demanded reform, but others have tried to focus on the task at hand — getting what they consider to be an acceptable deal.
A worker at FCA’s Belvidere Assembly in Illinois who asked not to be named, when asked last week about his union negotiators, said “as of right now, I don’t trust them, but I have to.”
The UAW, under acting President Rory Gamble, has gone to significant lengths in recent weeks to try to restore the trust of its members and to avoid federal intervention, with Gamble announcing a series of ethics reforms. The UAW’s leaders have filed union charges against Jones and Region 5 Director Vance Pearson in an effort to expel them. Jones has not been criminally charged, but Pearson has.
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Harley Shaiken, a professor at the University of California, Berkeley, who specializes in labor issues, said the lawsuit allegations could prove decisive in a close contract vote, but he does not think that will be an issue. He expects workers to view the tentative agreement when one is reached as offering gains for workers.
Respect for Gamble
Shaiken noted that Gamble’s record helps.
“Rory Gamble is highly respected as the interim president, and he came on full force on issues of corruption,” Shaiken said.
Union negotiators are well aware of the key issues, including wages, the disparate treatment of temporary, in-progression and traditional workers and job security, and they remained engaged while talks were under way with the other automakers. They will also clearly recall the rejection of the initial 2015 agreement between the UAW and FCA, and they will work to avoid a repeat, he said.
“I don’t think they view this as something that will potentially derail the talks. It’s not helpful but I don’t think it’ll be defining,” Shaiken said.
Marick Masters, a business professor at Wayne State University, said that if nothing else, the lawsuit puts an even bigger spotlight on negotiations.
“I think they have to be extraordinarily careful that what they’re doing is being watched microscopically by many parties,” he said. “I think they will be extremely careful to avoid the appearance of any background deal (and be) as transparent as possible.”
Any impact on talks or how workers view a deal is not fully clear, but deviation from the pattern could generate skepticism.
The pattern deal, which includes gains for temporary and in-progression workers, would be costly for FCA because of its heavier reliance on them.
“If the agreement between Chrysler and the UAW were to deviate in any way (from the pattern at GM and Ford) to the disadvantage of workers, people would say, ‘We told you so, you’d better look in to this,'” Masters said.
Contact Eric D. Lawrence: elawrence@freepress.com or (313) 223-4272. Follow him on Twitter: @_ericdlawrence.
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