Auto News: GM Sues Rival Over Bribery Allegations, UAW President Resigns

Nov 21, 2019
Originally published on November 21, 2019 11:22 am
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GM is suing crosstown rival Fiat Chrysler over a scheme to bribe top United Auto Workers officials. And Gary Jones, UAW president, resigned abruptly yesterday under pressure from the union's executive board. Michigan Radio's Tracy Samilton reports.

TRACY SAMILTON, BYLINE: Let's start with that lawsuit. Here's how Erik Gordon with the University of Michigan Ross School of Business describes it.

ERIK GORDON: It's unprecedented.

SAMILTON: Beginning in 2009, three Fiat Chrysler executives, now in federal prison, bribed UAW officials. The aim, as one of them put it - to make union leaders fat, dumb and happy in return for favorable contracts. The union's bargaining is supposed to result in roughly similar labor costs for all three Detroit automakers. GM says the bribes resulted in unique concessions for Fiat Chrysler, like, they got to employ more, lower-paid workers. Meritless, says Fiat Chrysler. GM claims billions of dollars in damages. Again, Erik Gordon...

GORDON: It shows how angry GM is over what it thinks is unfair treatment, which, if it's true, is highly illegal.

SAMILTON: Gordon says, while the misconduct has already been proved...

GORDON: The hard part for GM is getting a jury to believe that that misconduct also resulted in a sweetheart deal for FCA.

SAMILTON: Now, about the resignation - federal investigators looking into the bribery scheme uncovered what they believed to be new and different kinds of corruption in the union. An FBI raid of the home of then-UAW President Gary Jones found, quote, "wads" of cash in his garage and evidence of possible misuse of union funds. To date, Jones hasn't been charged with any crimes. The UAW executive board says Jones turned in false, misleading and inaccurate expense records.

Peter Henning is with Wayne State University's Law School. He says he can't blame union members if they feel betrayed.

PETER HENNING: If I'm a UAW union member, I have to ask whether back in 2015 or 2009, whether we got sold out.

SAMILTON: All of this is happening at an awkward time for the union and Fiat Chrysler. They're in the middle of negotiations for a new contract. For NPR News, I'm Tracy Samilton.

(SOUNDBITE OF WU-TANG CLAN'S "SLOW BLUES") Transcript provided by NPR, Copyright NPR.