UAW, FCA Reach Tentative Contract As Probe Continues

A federal investigation into UAW corruption hangs over the impending ratification vote at FCA. The scandal became public two years ago when federal authorities charged FCA’s labor relations staff had bribed UAW officials.

Joseph Szczesny

December 3, 2019

4 Min Read
FCA Kokomo IN
Worker assembles transmission at FCA plant in Kokomo, IN. UAW members could vote as early as Friday on new 4-year contract with automaker.

The UAW faces another potentially difficult ratification vote as it tries to wrap up the last of three contracts with Detroit’s automakers to close out 2019 negotiations marked by a 40-day strike against General Motors and a scandal that forced the resignation of the union’s president.

The union said over the Thanksgiving weekend it reached a tentative agreement with Fiat Chrysler Automobiles. The tentative 4-year deal, which includes a $9,000 bonus and 3% pay increases in its second and fourth years, follows the pattern set earlier in bargaining with GM and Ford.

The agreement includes $4.5 billion in major investments previously announced by FCA, and UAW negotiators secured an additional $4.5 billion for a total of $9 billion of investments adding 7,900 jobs during the life of the contract, says Cindy Estrada, director of the union’s Chrysler Dept.

“The pattern bargaining strategy has been a very effective approach for the UAW and its members to negotiate economic gains around salary, benefits and job security,” Estrada says.

FCA has doubled the size of its hourly workforce in the U.S. and as at GM and Ford, the status of new hires was a major issue in the talks. Some 64% of FCA’s 47,000 hourly workers should make it to the top of the pay scale, roughly $32 per hour now, throughout the tentative contract, say UAW officials who asked not to be identified because they were not authorized to speak publicly.

Also, the new contract improves health-care benefits for new hires.

FCA has transferred some 6,700 temporary workers to full-time employment over the past four years, and the 4,800 temporary workers now working there also will have a chance to become full-time, just as at GM and Ford.

The UAW-FCA National Council will meet Wednesday to go over details of the proposed tentative agreement. If adopted, it will go to more than 49,000 FCA hourly and salaried workers for a ratification vote beginning Friday, the UAW says.

Workers at FCA voted down a tentative agreement in 2015 and the militancy has carried over into this year’s contract talks. The two-tier pay system used in the industry since 2007 has been a major issue in the negotiations.

Meanwhile, the federal investigation into UAW corruption also hangs over the impending ratification vote at FCA.  The scandal became public two years ago when federal authorities charged FCA’s labor relations staff had bribed UAW officials, starting with the late General Holiefield, a former UAW vice president and head of the union’s Chrysler Dept., with cash from joint company-union training funds.

Next month, Holiefield’s successor, Norwood Jewell, is scheduled to begin a 15-month sentence for violations of federal labor law, including accepting payments from employers.

Joe Ashton, a former UAW vice president and a former UAW representative on the GM Board of Directors, is due to appear this week in federal court on charges of stealing from joint training funds.

Former UAW President Gary Jones (below, left) resigned from the union Nov. 20 to avoid an internal union trial on embezzlement charges. The charges had been pushed by UAW locals around the country angered by the scandal. The union’s executive board is expected to meet soon to name a permanent replacement for Jones, who was elected UAW president in 2018.

Jones has not been charged by federal authorities. But the case drawn up by prosecutors against two of his top lieutenants, Vance Pearson and Edward Robinson, implicate him in an embezzlement scheme that netted participants an estimated $1.5 million in cash and other benefits. An FBI raid turned up $30,000 in cash in the garage of his suburban Detroit home.UAW President Gary Jones (2).jpg

UAW President Gary Jones (2)_3

GM has sued FCA in U.S. District Court in Detroit, claiming its rival sought to gain competitive advantage and possibly pressuring GM into a merger by bribing UAW officers.

GM alleges former FCA CEO Sergio Marchionne, who died in 2018, authorized bribes paid to UAW officials. FCA denies GM’s claims and is preparing to defend itself in court.

The union has insisted neither Holiefield nor Jewell’s misconduct influenced the outcome of past negotiations.

Jones’ resignation follows the first court appearance in Detroit of Pearson, the former director of UAW Region 5 in Hazelwood, MO, on federal charges of embezzlement and misusing union funds for personal gain.

In all, three FCA executives and six UAW officers or officials have pleaded guilty to federal crimes as a result of the wide-ranging corruption probe.



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