Fiat Chrysler Automobiles CEO Sergio Marchionne had good reason to praise General Holiefield at the former United Auto Workers vice president’s funeral service in March 2015.
Holiefield, whose wife, Monica Morgan, is charged with misappropriating $2.2 million from joint UAW-FCA accounts, was instrumental in keeping in check the demands of union members frustrated by the automaker’s 2-tier wage system and changes in local contracts that chipped away or ended what had been traditional union prerogatives on the factory floor.
Bob King, the UAW president during Holiefield’s tenure as head of the union’s Chrysler Dept., clearly had reservations about his lieutenant’s freewheeling style, first challenging in 2011 a contract awarded Morgan by the jointly operated UAW-Chrysler National Training Center (NTC) in Detroit, according to court documents filed by the U.S. Department of Justice.
King hasn’t said anything publicly, but Harley Shaiken, a labor expert at the University of California-Berkeley and a longtime friend of the former UAW president, notes in an interview King may have set in motion the investigation that led to the recent federal indictments of Morgan; former FCA group vice president Alphons Iacobelli, the automaker’s chief labor negotiator; and FCA financial analyst James Durden.
“From the very beginning, Bob set a tone that said he would have no tolerance” for corruption or any questionable practices by union staff, Shaiken says.
The dispute with King, along with the cancer that ultimately killed him, forced Holiefield to retire in 2014 after six years as the UAW’s chief Chrysler negotiator. King praised Holiefield’s service to the union even though they had long been at odds over money.
The rift between the two union officials was exacerbated by FCA’s refusal to turn over certain financial records from the NTC. Iacobelli had deflected King’s inquiries into the credit cards, contracts and charitable contributions paid for with NTC funds, according to the Justice Dept.
Iacobelli, who faces federal charges of diverting more than $1 million in training center funds for personal use and helping steer $1.2 million from the UAW-NTC to Holiefield, other UAW officials and Morgan, blocked a union inquiry, according to the 42-page indictment.
Durden and several FCA employees were listed as members of the board of directors of the Leave the Light On Foundation, which federal investigators described as a conduit Iacobelli allegedly used to funnel NTC money to Holiefield and Morgan.
The federal indictment notes an FCA employee identified only as FCA-10 wrote in an October 2013 e-mail to Iacobelli, “The UAW President and UAW General Counsel want to go through NTC financials looking for something. They are apparently questioning something. Not sure why they should have access to a charity’s records,” the employee wrote. “General needs to talk to you directly.”
Court records also include a subsequent e-mail sent in early 2014 in which an employee identified as FCA-7 states to Iacobelli: “We can’t provide the requested type of information to such people. If we tell (King and a senior UAW assistant) that we aren’t giving them (anything), what are they going to do, tell (another employee identified as FCA-1) we are being uncooperative?”
Replied Iacobelli, who allegedly spent NTC funds for personal items such as a new swimming pool and outdoor kitchen at his Rochester Hills home, a Ferrari and two gold Monte Blanc pens valued at $37,500 each: “We are providing nothing. We’re going to have fun with these evil people.”
At the time Iacobelli, publicly at least, was promoting greater cooperation between FCA, the union and the automaker’s blue-collar employees.
“FCA’s conduct was absolutely reprehensible,” Shaiken says. “But it's the union that’s gotten tarred.”
For its part, FCA has said it, like the UAW, was a victim of Iacobelli, Durden and Morgan’s misfeasance. FCA also has declined to comment on whether employees such as FCA-7 or FCA 10, who are not named in the indictment, were disciplined or fired.
In a letter to FCA employees issued after Iacobelli and Morgan were arraigned July 26 on charges including conspiracy to violate the Labor Management Relations Act, CEO Marchionne denied the alleged conspiracy had any effect on 2015 FCA-UAW contract negotiations.
“This conduct had nothing whatsoever to do with the collective-bargaining process, but rather involved two bad actors who apparently saw an opportunity to misappropriate funds entrusted to their control and who, unfortunately, co-opted other individuals to carry out or conceal their activities over a period of several years,” Marchionne wrote.
Marchionne said Iacobelli was “separated” from FCA a month before contract talks began in 2015.
After leaving FCA, Iacobelli joined General Motors as executive director of labor relations. GM has not commented on whether Iacobelli is still with the company. He and Morgan both are free on bond after pleading innocent to conspiracy and other charges in U.S. District Court in Detroit.
Durden, who was controller of the NTC from 2008 through 2015, is charged with conspiracy.
Charges against others not identified in the indictment are expected to be filed.
Holiefield, who then-UAW President Ron Gettelfinger put in charge of the union’s Chrysler department in 2008, and his chief lieutenants had substantial influence over hiring of new employees as FCA steadily increased production in the years after the recession and the automaker’s federal bailout, according to UAW officials and FCA employees.
“In my plant we’re supposed to have a lottery system where if you win, you get to make a referral or a family member or a friend,” says Martha Grevatt, a union activist employed at the Warren, MI, stamping plant. “But we also had people hired who seemed to have no connection to anybody.”
Jobs and hiring have been sensitive topics for union officials since the U.S. auto industry began to contract in 1980s. Job openings became harder to come by, Washington Post reporter Amy Goldstein writes in “Janesville: An American Story,” a recently published book about the aftermath of the 2009 shutdown of the General Motors assembly plant in Janesville, WI.
“Even when GM had openings, getting hired was a clubby thing, a matter of who you knew. Applicants need a referral and each GM employee was given one referral that could be bestowed on a relative or friend,” writes Goldstein, who conducted extensive interviews with GM employees and Janesville residents.
One of the biggest scandals to hit the UAW in recent years involved charges a union official, Donny G. Douglas, had demanded jobs for friends and relatives to settle a strike at what was then GM’s Pontiac, MI, truck plant in 1997. Douglas and Jay Campbell, the bargaining chairman of UAW Local 594, were sentenced to prison in 2006 over the job scheme.
At FCA, while nothing was made public, the talk about selling jobs apparently prompted King to remove James Hardy from his position as Holiefield’s top administrative assistant.
Holiefield, who had started working for the then-Chrysler as a teenager in the 1970s and had feared for the automaker’s future during the 2008-2009 recession, formed what he described as a partnership with Marchionne to help revive the company. Jobs, Holiefield said repeatedly, were the prize as the company rebuilt.
However, even as FCA began to prosper Holiefield’s relationships with union members and, critically, with King, continued to deteriorate. In 2011, Holiefield had a difficult time selling the new contract to the rank and file even though the UAW had no leverage because it was prohibited from striking under terms of the federal bailout. The final vote was very close and could have sent the proposed contract to arbitration, something the UAW wanted to avoid at all costs.
But only months later, in 2013, FCA’s push to implement new operating routines met opposition from blue-collar workers who were becoming increasingly militant as they resisted the changes.
The fight contributed to a brief, unauthorized strike at the Dodge truck plant in Warren, MI, and a demonstration on a bitterly cold day in February 2013 led to the firing of Alex Wassell, one of the organizers.
Wassell, who is now 68 and retired, was told by Holiefield he should retire. “I didn’t want my job back,” Wassell says in an interview. King also said in a television interview that dismissing a worker was wrong. Wassell ultimately was returned to work, but he says he was disappointed the information about Holiefield’s alleged wrongdoing didn’t come out sooner.
“I guess it takes a long time to build a case,” he said.
By then the rift between King and Holiefield was complete. King has said nothing publicly about the indictments. However, Shaiken, who has known King for decades, says King is concerned about representation. “Bob believes union members deserve the best representation possible,” he says.
Bruce Baumhower, the longtime president of UAW Local 12, which represents workers at the FCA Jeep plants in Toledo, OH, says he doesn’t want to speak ill of Holiefield.
“The UAW is a great institution that has helped millions of people over the years,” Baumhower says. “But it's made up of people and sometimes people have failings.”
Holiefield had earned the respect of Marchionne, who said at his 2015 funeral: “He knew, as I did, that the agreements we would come to and the decisions we would make were a matter of life and death for the company and its workers. But General was a man of hope. He didn’t shy away from the challenge.
“He was a tough negotiator and sometimes we butted heads, but our discussions led to great mutual respect and trust and we were able to agree on a shared future. In the end, it is often in the darkest and most difficult moments that we get to see someone’s real character.
“Even when they were not very popular, he was always ready to make tough decisions.”