Week 12: Corruption, Lawsuits, and the Like

            In the past, this blog has spoken only briefly about the ongoing corruption investigation into the UAW. That will now change. Gary Jones has stepped away from his role at the union, making him the now former president of the UAW (WSJ). As reported by Christina Rogers of the Wall Street Journal, “Mr. Jones made the decision to resign from his position and retire from the union,” on Wednesday (WSJ). How do the newest developments in the corruption investigation relate to GM? Let’s explore

Obviously, as you have seen by following my blog for the past few months, General Motors does a lot of dealings with the United Auto Workers. So do GM’s competitors, like Fiat Chrysler. Another article from Christina Rogers, co-authored by Nora Naughton, states that GM accused Fiat Chrysler of, “bribing union negotiators to gain a competitive advantage, triggering an unusual legal dispute between crosstown rivals by filing a federal racketeering lawsuit,” (WSJ). This lawsuit is quite novel, “industry analysts say they can’t recall the last time one Detroit car company sued another, especially over dealings with the UAW,” (WSJ). GM has taken issue with the fact that Fiat Chrysler has historically had low labor costs. As Naughton and Rogers note, the company, “currently has an $8 hourly labor cost advantage over GM,” (WSJ). In the suit, GM accuses Fiat Chrysler of, “corrupting the collective bargaining process in 2011 and 2015 … to solidify a labor cost advantage,” (WSJ). GM goes further, alleging that, “Fiat Chrysler executives obtained advantageous contract terms from the UAW by paying off union leaders,” (WSJ). Fiat Chrysler has already been embroiled in the federal investigation, three employees have entered guilty pleas.

This year, the UAW initiated a strike at GM factories that lasted forty days and resulted in a new labor contract. After this contract was ratified, the UAW turned its efforts to Ford and Fiat, with whom it has been negotiating contracts. In response to the lawsuit, Fiat Chrysler, “accused GM of trying to interfere with ongoing UAW negotiations,” (WSJ). Not only is the company in the middle of labor talks, it is also attempting to pull of a merger with French auto maker PSA. The accusations by General Motors though are far from the first. Federal prosecutors have been focused on, “a conspiracy by Fiat Chrysler executives to keep UAW officials ‘fat, dumb and happy,’ as prosecutors have said,” (WSJ). As Rogers and Naughton report, “GM will ask for ‘significant damages’ … after the discovery phase of the lawsuit is complete,” (WSJ).

The ongoing investigation has until now been a point of periphery interest for this blog, however now it comes to center stage. The outcome of both the federal investigation and the GM lawsuit will certainly have lasting ramifications on the auto industry. Unfortunately, I doubt they will be resolved before the end of the semester. Even if I no longer post on this blog regularly, I know I will keep up with my new friends at GM, and I hope you do too.

Sources:

https://www.wsj.com/articles/general-motors-files-racketeering-lawsuit-against-fiat-chrysler-11574270231

https://www.wsj.com/articles/uaw-board-moves-to-remove-leader-11574284116

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KXV7A1aLVVqqg74QMpADOobMpH1rWOzYd879mOljvG3TabfGct1pwRp1KdZCVRq9Nqg3dqLorAftK5B3XVZ0wZpKasM2KLixhonhBFE8Iz5U3L0hDEHgJ61yPN2FikYWQxi4k/VMk1uUG2WpCWpcpiC26WELblPpH01c7vWVcxUSn2jcIdKln0uLyy6EbQJlEgHYLyjn4FlHxK5wpX50gVCoso1l2pVG+JbFrwvDU2LikIK1uB9pkb8v5SY2/AlLxPPeuHdwnR6fuQfMU6V/tml6rrfG0P4nPpSebz8oQt8kX6tE/8AAf8AGajqct8bT5LUP9BHxnKH9Pfr/J1f1j0djFsYbRbTzzWDBMKATEhkWYyLaJBbRTGNaJMUAswYRgSwEmQZjTDECJMiTIAJlPpW/Y1MpCnI1idgsL3Jlwyr0moNGqDqOze/8plk9wfBwdUg/S4q/JMzD4CKVsONAlRzzIUeWXWPpAn6PCebZmHqbCPtiBtNOkPFFHteajL+flCabP8A4WEUc2UsfItaNqHEfr1kpjhmVbeGURNSmD9Ji78lzv8AZpIFCgNfzj8u6v8AeDklyyUd30Qino6vfpElgVbbVNrG1r32G87PqAjDDk9pnUkW365FLHN4m3lOC6r4mkcFiguBLWRTftahLd9NNBpx8p2fV2qq9FFkzU7CpsN2Vi2gudu0CYMvf1+xsxdv+G1odaMHVFhXVTts90Omv61gYfXFT8jqZbXU02F7W7tVCdvIGeV4zo3IXpllzAnacpBtcbTYi09AwuKat0XVWpTJKUmpkKyksFpgq1xs0I47N8rpUWmjo900wwo4SSRF4R8yI2uqqfUAxthw957FnkpAGrwg54wiQq8pLQ0y7QxWzWOOIlIKBFs05aUzpqaRYq1ogNziixg2lqKuQ17HfICQVTkYYpHgZGyEZeUyTkPH3EmFjRw/5SG/SKa/Voj3d/8ArNd1IF8YOVKofdB8Za/KI36X4UkHu5+MT1EF8U54UD7un3Tlx8MvQ785jvWimjGijMBqIgGFeDEhkW0MxbRIA0S0cYlogAYEIwYgY8yQ8mIEGZMkRIYYnFLdGHFWHsY6Da+kSp5xhx3B2mIKjcoztp5aDf6Q1TDDfUc/5VB9dZVwZKt9DmFhoQ1hz/HGWzUqMMy0UQC9iqgeOlzeX1Uji0Crqb5aIJOgNyba6abDIzFm7qqDpoNBflfZBrV6jDvONNQLqN+7ZrpAyKP8QEngDfzvOcnsKR6B+T2niGp4immKRc1N7KXHzwpII0OzTZOl6sFz0bXFVldlaobggggKj7ud55l1TxtOlXD1ajImV1ugu1mRl3ePvO06odL0KeFxFMF/ztQoqva96iFdo00C38pwb6r8jvClRp6qo5OYsDsPeLE201Wxt5tOx6l1y1KrTvmIoBVUjLcIthfU/WtflNDiepeJAX81eygd1lbYNSLm+pufObbqL0fVoYi1Sk6hqdRTdCF7rKR395OvpLzpx2Z1Rc6HcmhTN790C/G2nwl20r9DUylPszoUeono5N/eXiDxnoRnaR5so1JoUFP4Ek0zxklTBI5RsKMCjj6SS68CfaCfCAfCSyB9sNyjzgnEHkPKDl5SOzMNh3C7Y8YOeGtCYaENSHSwM8yZ8nMyS0FM8969vfG1OQpj+hT8Y7qAt61YjdTQerH7pR64tfG1/wCJR6U0Hwmx/J587EHlSH+4YZNvh16I6wd5n7nZNFmEzxZeeeazIMjPFtUiQZeLaD2kHtI0FkmJaEakU1SNEIMGQakDtI0FhvMvAd5gcRAOZAzyQ0SEyJl5F5Cp5riMVUzsGdrZmHziNjEa227BMphTYOx8hr7xeMt21QXUfnagub6AMRugFcz5UAOp1UnX18fsg7uznQ+qlKxsXvu+baKBUbvHUndw3Rj4B1XMwC7jmNje342xLU9gBPO5EHKx0tD8FWym4QE7r305ixGzz2Tp+p7BajZ3yhQGFM6LUqKGyFm3Wve/O2s5CnT1BB1vuM2nR7mm47XtAj2VsjDvKSL323Gl926c5ItE9U6q9b2q1FoBA6lj+cBNlU7LAk6aaa+k7elU2jn9ov8AGcz0J1jwQBCstNEAyu6lcwOh1I3WA26zbYfrDhHJC4qgdh0qpcXG/XTZOFGmPmavo5QKuKW5NsQzeAqIjgeGvvLptNWMZT+WYkK9MhloOGVh3iVZGuQdSMg9ZsM09HG/lRkmvmZJaCH5SC8EvL2UoIsTB9IJaC7SWShoYcoWcSveRmgKLPa84Jqc4i8iAju15zInLMiQ8o6x182Krn964/lOX4Tc9Q3stc8XQein75y/ST3rVTxq1D6u06PqSPzNQ/vT7Iv3zvnVYkvQ44n87Z1RrwDXiLQcsw0jVbHdtFtWgZJGSOwWF2sE1ZAWT2cdiAGrFtUjTTiykmxBRqSM5jMkjJG0QBnkhzCyQhTktEF55IeHkk5JLIDnkdpGFIJSNkPOuksKvymrdjrVdiLcWLEe8xKQBsi24e2+/hNh0oqjEVVIuS1wbai4Gw+c0lSoN4vs/G2cXJt0V4LDCwudo2WLabdR/aV2cHbtOvG5vxmdsCRodw1Pw84Iq3HPZeKvuI5WPHZ68plPNm+bfz094APHbxjKQvpe3/z+0qyG4TH1MhUsAtrEaHTTTZ+LScFizSclWHeAB0BFx5zXFwBltyi2rdw8V7wOmltTY85VXVDrd8nQP0640KqRptAtqTfYeXv427TB9csPkpKxN8oD2AsrBdRe/EexnktGtfTjCTEEAqSdn2S61R4JKblzuehdK9fXyqKFLI5JJ7TXu65QAP1joTw5yl0Z11rmvTFaoMhYBgEXZcX2C+gvOQp4giy3Oh47tZJq66aXI8jpsk1ysFR683WfC7qhPgj/AHSrietuGCE3a1tO6fKeSjGqVNwTrYXAOotz2Wt7wcbiVqd7IBUsoL6C4ChALAaaZfSdFKQ1Gj0Bfyg3bL2CrbbeqTpbccglnC9eqbkZaTHNZV7wuxzWWwttNxptvpPMkpksNdvpHUcSUqDNrquo27mU+OohcuwJLuj0ZuvaH5iKefae+i7JSPX8m4NILwuzcQBsnE9JqQ+bQAgWtt37RxveUc2hH40kuT7lnSdUegVetWIue8BqdAgIHK++ZK1EKyhiguQDs4i8yZ/1mbP/ADLyP//Z

One thought on “Week 12: Corruption, Lawsuits, and the Like

  1. I was not aware of the $8 difference in hourly wages – that seems pretty significant. it’s important to keep those UAW execs “fat, dumb, and happy”. It will be interesting to see how this plays out. And nice to know you’ve got friends in Detroit now…

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