Overshadowed by U.S. corruption probe, UAW, GM close to contract deadline

DETROIT (Reuters) – Overshadowed by a mushrooming U.S. federal corruption probe into high union officers that has created uncertainty for collective bargaining talks, the contract between the United Auto Employees (UAW) and Basic Motors Co (GM.N) will expire at midnight on Saturday.

FILE PHOTO: United Auto Employees President Gary Jones delivers remarks on the opening plenary session of the Nationwide Affiliation of the Development for Coloured Folks's annual conference in Detroit, Michigan, U.S. July 22, 2019. REUTERS/Rebecca Cook dinner/File Picture

This yr’s talks between the union and GM, Ford Motor Co (F.N) and Fiat Chrysler Vehicles NV (FCA) (FCHA.MI) (FCAU.N) have been all the time going to be robust, with thorny points equivalent to healthcare prices and profit-sharing on the desk at a time when gross sales of U.S. new autos are declining.

Usually when the four-year contracts with Detroit’s automakers expire, the query is will contract talks be prolonged or will union employees exit on strike?

This time issues are extra sophisticated.

Over the past two weeks, the longstanding federal investigation into corruption on the union has raised questions on UAW president Gary Jones, who a supply mentioned was an unnamed official talked about in a searing federal criticism this week detailing alleged embezzlement by union leaders.

The union had focused GM as the primary automaker with which it needed to conclude contract talks.

The spreading probe raises recent questions in regards to the union’s choices and its leaders’ standing with rank-and-file members. Final month, greater than 96% of GM’s hourly employees voted to authorize a strike if crucial, that means if no deal is reached Jones might name for a walkout with out additional approval.

GM’s employees final went out on a short two-day strike in 2007 throughout contract talks. A extra painful strike occurred in Flint, Michigan, in 1998, lasting 54 days and costing the No. 1 U.S. automaker greater than $2 billion.

However the current strike authorization vote was held earlier than the dramatic occasions of the previous few weeks, which included a late August FBI raid on Jones’s dwelling and different areas as a part of the corruption probe.

Sources briefed on the matter this week mentioned GM could search a short lived extension of the contract and pursue different choices together with in search of help from a 3rd social gathering. Whereas the UAW has not granted that to GM, it has prolonged the deadline indefinitely with Ford and FCA.

It was not clear if the talks will proceed with the present UAW president beneath investigation, the sources mentioned.

Elected in 2018, Jones was chosen as an outsider with a clear slate as a result of he ran the union’s Area 5 – which incorporates 17 western and southwestern U.S. states removed from the epicenter of scandal in Detroit.

However the federal criticism this week in opposition to Vance Pearson, Jones’ former second in command and successor as head of Area 5, listed lavish events and spending by union leaders in that area, together with “UAW Official A.”

Sources have confirmed that Jones is Official A. In keeping with the criticism, brokers seized $30,000 in money from Official A’s residence.

Reporting by Nick Carey and Ben Klayman in Detroit; Modifying by Daniel Wallis

Author: Maxwell C.

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