By Nora Naughton
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (November 6, 2019).
The governing board of the United Auto Workers is trying to move
past an internal split over the terms of President Gary Jones's
recent departure and focus on salvaging the union's reputation amid
a corruption probe, contract talks and shrinking membership.
Days after securing a new four-year labor contract at General
Motors Co. that many union members considered a win, the UAW found
itself tarnished yet again by new allegations in a long-running
criminal investigation that alleges extravagant spending of union
funds including on trips, cigars and golf resorts and that has
implicated some of its top members, including Mr. Jones. On
Thursday, federal prosecutors claimed that a former union official
close to Mr. Jones embezzled dues.
On Saturday, Mr. Jones requested -- and was granted -- a paid
leave of absence following the latest allegations, people familiar
with the matter said. The request for a paid leave and its timing
rankled several board members who had earlier wanted him out, some
of the people said.
In September, some members of the 14-person UAW board had called
for Mr. Jones's removal after the Detroit News first linked his
name to the federal probe, the people familiar with the matter
said. They added that the board never formally voted on that
effort. On Saturday, six of the 13 voting members voted against the
embattled union leader's request, but Mr. Jones prevailed as he was
able to cast a vote, the people said.
The board tension comes as the union pursues new labor contracts
with Ford Motor Co. and Fiat Chrysler Automobiles NV after the GM
deal.
One of the oldest unions in the country, the UAW once wielded
significant influence in the automotive industry, with membership
last peaking at 1.5 million in the late 1970s. Last year, it had
fewer than 400,000 members, as U.S. auto makers have closed plants
and downsized workforces.
The board, now led by interim President Rory Gamble, is working
to rebuild credibility with members and regain influence. In a
Tuesday letter to members, Mr. Gamble said he was angered by
"recent events concerning members of our leadership" without
mentioning the federal investigation.
"I am not here to pre-judge anyone," he wrote. "I am here to
take this union forward."
The probe has ensnared multiple union officials, including close
associates of Mr. Jones. Prosecutors say they have uncovered
evidence of costly trips, designer clothing, exotic sports cars and
high-end shotguns paid for out of union funds. Authorities allege
some of the most extravagant spending -- including thousands of
dollars spent at steak houses, golf courses and spas -- happened on
trips to Palm Springs, Calif., for conferences hosted by Mr. Jones
when he was a UAW official at Region 5, the union's largest
regional office.
Federal prosecutors said Thursday that Edward Robinson, a former
official in UAW Region 5 and one of Mr. Jones's former aides,
embezzled up to $700,000 in union dues and split the money with an
unnamed union official, referred to as "UAW Official A." That
unnamed person is Mr. Jones, according to a person familiar with
the investigation.
Mr. Jones's attorney, J. Bruce Maffeo, didn't comment on the
allegation. He said Mr. Jones took a voluntary leave of absence and
didn't face pressure to do so.
"Gary made the decision to request a leave of absence at this
point in time in order to allow the UAW to continue its fight to
improve the lives of its members and their families without
distraction," Mr. Maffeo said.
Mr. Robinson's attorney didn't respond to requests for
comment.
The UAW's International Executive Board is the union's 14-member
governing body, though it currently has only 13 voting members. The
current Region 5 director, Vance Pearson, took a leave after
federal prosecutors charged him in September with embezzling union
funds. Mr. Pearson plans to plead not guilty, his attorney has
said.
"This is still going to be a cloud hanging over the union until
something gets resolved with Gary Jones's case," said Kristin
Dziczek, an economist and labor expert at the Center for Automotive
Research in Ann Arbor, Mich.
The faction of the board that had pushed for Mr. Jones to step
down in recent months is ultimately satisfied that he decided to
move aside, people familiar with the matter said. Since Mr. Jones
hasn't been charged with a crime, board members at this time aren't
looking to make further changes to the union's leadership or
structure, the people said.
Still, some board members believe that Mr. Jones waited too long
to step aside and wielded too much influence over how his departure
was handled and how it was communicated to members, according to
the people.
Previous UAW leaders, including Mr. Jones, already enacted
changes in response to the federal probe, which became public in
2017. Changes included independent audits, formalized credit-card
policies and more vetting for vendors used by the union.
Mr. Jones, who has led the UAW since June 2018, was coming off a
victory in labor talks after workers ratified a new four-year
contract with GM that delivered substantial gains for workers.
Similar gains will carry over to workers at Ford if a tentative
agreement is ratified this month by members. The UAW will then turn
its attention to Fiat Chrysler, using the agreements at GM and Ford
as a template.
The win came after a challenging summer for Mr. Jones, who is
62. FBI agents in August executed search warrants at the homes and
offices of several current and former UAW officials, including Mr.
Jones's home in Michigan. Days before the UAW's contracts with the
Detroit auto makers were set to expire in September, Mr. Jones's
former assistant, Mr. Pearson, was charged. These charges spurred
the September UAW board meeting in which Mr. Jones was encouraged
to step down, people familiar with the meeting said.
(END) Dow Jones Newswires
November 06, 2019 02:47 ET (07:47 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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