Daily Labor Report®

Fiat Workers Say Goodies to Union Leaders Tarnished Contract

Feb. 2, 2018, 1:11 PM

UAW members are calling for the union and the Big Three auto companies to revisit current labor contracts after a former Fiat Chrysler Automobiles negotiator admitted to his role in lavishing gifts on union leaders.

United Auto Workers President Dennis Williams issued a letter to membership last week denying that the acts of the negotiator, Alphons Iacobelli, resulted in a contract that favored the company.

But many members aren’t buying it, and they took to social media to say so. A majority called for a new contract and complete overhaul of the UAW leadership. Some expressed a sense of betrayal by the union and questioned how lead negotiators could say they weren’t swayed when evidence suggests otherwise.

“How could you not know?” Facebook poster Robert Richard asked Bloomberg Law in an interview. “They knew this investigation was ongoing” and haven’t been transparent with members, said Richard, a member of UAW Local 12. He is currently involved in a lawsuit from 2015 against the union and Fiat Chrysler.

Iacobelli said in a Jan. 22 plea agreement that money taken from the joint UAW-Chrysler National Training Center from 2009-2015 was used to give gifts and payments to union officials to gain concessions during contract negotiations. One of the recipients was identified as General Holiefield, a UAW vice president in charge of negotiations with Fiat Chrysler. Holiefield left the union in 2014 and died in 2015.

Some $1.5 million is alleged to have been shared with union officials. Three people have pleaded guilty, including Iacobelli, to charges related to taking the money for personal use. Holiefield’s widow is also charged, and that case is pending.

The UAW and FCA both repeated assertions that collective bargaining wasn’t influenced by the corruption, in response to queries from Bloomberg Law. The UAW also referred Bloomberg Law to Williams’ letter.

Workers Want Revised Contract

The union should go back to pre-2009 contracts because Iacobelli says that’s when payoffs began, Richard told Bloomberg Law.

“We shouldn’t be working. We don’t even have a valid contract,” he said. Richard works at the Toledo, Ohio, FCA Jeep complex.

Richard and Brian Gulley, a UAW member from Local 551 who works at a Ford assembly plant, said members were unhappy with contract agreements presented to them in 2011 and 2015 and were suspicious. “Some things didn’t add up,” he said.

Gulley said members felt pressured by the union to accept the contracts.

But Williams said in his letter that the 2015 Fiat Chrysler contract “was among the richest for workers ever reached, even renegotiating a more generous profit sharing formula that recently produced $5,500 on average to every FCA worker.”

Gulley said he believes it would be unwise to reopen the contracts too soon.

“I think any talk will have to wait until” the June convention, he said. “To make the call for that now, I don’t think that would go where workers want it to.”

Renegotiation? Wouldn’t Be First Time

In the past, unions and auto companies have reopened contracts to renegotiate certain terms. Ford and GM did so during the course of the 2005 labor agreement to settle disagreements about health-care coverage. The Big Three automakers all agreed to renegotiate their 2009 UAW pacts in response to the recession, Kristin Dziczek, the director of the Industry, Labor, & Economics Group at the Center for Automotive Research, said.

Both the union and the employer would have to agree to renegotiate the current contract, reached in 2015, she said.

If the union seeks to reopen the 2015 pact, it wouldn’t happen until after the federal investigation is completed, Dziczek said. It’s unlikely the UAW would preemptively jump in front of the investigation.

“We will have to wait until the federal investigation runs its course to figure out what happened and if there was in fact a violation of labor law” that would require both sides to take another look at the agreements, she said.

Probe Spreads to Ford, GM

The federal investigation has now expanded to include General Motors and Ford Motor Co. and members are asking for those contracts to be revisited, too. Those pacts expire in 2019.

No charges have been filed against anyone connected with Ford and GM.

A GM representative confirmed that the company has been contacted by federal prosecutors about an investigation into the UAW-GM Center for Human Resources and said it is cooperating.

To contact the reporter on this story: Jaclyn Diaz in Washington at jdiaz@bloomberglaw.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bloomberglaw.com

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