UAW President Pledges to Put Automakers on ‘Defensive’ in Talks

(Bloomberg) -- The leader of the United Auto Workers struck a fiery tone in advance of contract negotiations with the three major U.S. automakers, promising to go on the offensive while also expressing contrition for a corruption scandal that has engulfed his union.

The union has a “bargaining strategy that puts the auto companies on the defensive,” Gary Jones, the UAW’s president, said at a press conference following the union’s three-day bargaining convention in Detroit. “We’ll take this fight to them and we’ll use every last ounce of our leverage. Every last ounce.”

Jones’s remarks come ahead of negotiations for contracts covering more than 150,000 U.S. hourly workers at General Motors Co., Ford Motor Co. and Fiat Chrysler Automobiles NV. Those contracts expire Sept. 15 and talks are expected to officially begin this summer. In a shot across the bow of auto executives, the UAW said earlier this week it will increase strike pay for workers. The union last went on strike in 2007, when workers briefly walked out on both GM and what was then DaimlerChrysler.

At its convention, the UAW resolved to push for a number of wins, including shortening how long it takes new workers to reach the top pay scale, increasing starting wages, reducing the number of temporary employees and maintaining generous health benefits.

The UAW chief also expressed regret about a scandal involving at least seven people, including four union officials and three ex-employees of Fiat Chrysler, who have been implicated for their roles in a scheme to embezzle funds from a UAW training center jointly run with the automaker.

“I am deeply saddened and irritated that some members of this union and some leaders of the auto companies exploited their position to benefit themselves,” said Jones, who declined to take any questions from reporters. “To my brothers and sisters sickened by the scandals, we make one thing clear: It is my responsibility from this day forward to strengthen your trust in your union. We do not take your trust for granted.”

Jones, who was elected president of the union last June, said he is introducing reforms aimed at preventing such scandals in the future. “We will continue to work with the authorities and we will continue to change the way this union works,” Jones said.

The Department of Justice contends that the UAW-Fiat Chrysler National Training Center was used as a conduit to facilitate payments from the auto industry to union and company executives, buying peace from the labor union during contract negotiations in 2011 and 2015.

Union leaders received credit cards and lavish gifts, including golf trips, designer clothing, furniture and jewelry, as part of a plan to keep senior UAW officials “fat, dumb, and happy,” according to legal documents. Fiat Chrysler executives also took advantage of the scheme for their personal benefit.

Al Iacobelli, who led U.S. labor relations for the automaker until June 2015, was charged with taking more than $1.2 million from the training center, buying a Ferrari and leasing a private jet. In August, he was sentenced to 5 1/2 years for his involvement in the misuse of training center funds. At a sentencing hearing in December, the government strongly hinted that its investigation is continuing and additional indictments may be coming.

UAW officials have denied the scandal compromised collective bargaining agreements with Fiat Chrysler. For its part, the automaker also said it neither knew about nor sanctioned the illicit payments.

“FCA US firmly restates that it was a victim of illegal conduct by Al Iacobelli and certain other rogue individuals who formerly held leadership roles at the National Training Center,” a company spokeswoman said in an email.

To contact the reporters on this story: Keith Naughton in Southfield, Michigan at knaughton3@bloomberg.net;Gabrielle Coppola in New York at gcoppola@bloomberg.net

To contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, Chester Dawson

©2019 Bloomberg L.P.