- the united auto workers has been under federal investigation for racketeering and fraud since 2017. four former union officials are in prison.
- what began as a probe into the workings between fiat chrysler (fca) and union officials has now broadened into looking at similar deals gm allegedly has made with the union, the wall street journal is reporting.
- expect more corruption charges and indictments against union officials and automaker employees as the year continues.
in the five months since general motors attacked fiat chrysler in a fraud lawsuit based on charges that its rival was involved in racketeering with the united auto workers, it appears the feds have pointed their crosshairs straight back at gm. according to the wall street journal, the justice department is looking at possible corruption schemes between the uaw and gm as the u.s. bolsters its unprecedented criminal probe into one of the country's most powerful unions.
the wsj reports that federal investigators "have interviewed both current and former gm employees within the company's labor relations department" and, in particular, have subpoenaed financial records from the uaw-gm joint employee training center (pictured above)—the very same jointly owned entity that at fca has led to the indictments of 14 former fca and uaw officials, the majority of whom have pleaded guilty. four union reps are currently in prison. gm agreed to shut down its training center this year, according to the wsj, as the uaw was on strike for five weeks. that plant shutdown cost gm more than $1 billion—and it helps to explain why gm filed the lawsuit against fca shortly afterward.
but the wsj says that "relatives of union leaders" may have been given jobs in return for unspecified bribes and that there could be more gm employees and uaw officials who may have orchestrated a "kickback scheme," which led to last year's arrest of former union vice president joe ashton. he pleaded guilty in december of having funneled a quarter-million dollars into his own pocket, according to federal prosecutors. at least one scheme involved 50,000 wristwatches that ashton ordered from the uaw-gm training center for uaw members, who allegedly never received them.
gm claims that corruption between the uaw and fca is the reason it lost "billions" on two labor contracts it signed with the uaw in 2011 and 2015. yet that case will certainly lose merit if investigators find gm to be just as culpable as fca in what appears to be a sordid game of bribes, shakedowns, and embezzlements.