The president of the United Autoworkers Union, Gary Jones, abruptly resigned Wednesday just as union leaders announced they would expel him and another top UAW official in an unfolding corruption scandal.
In a related development, General Motors (GM) filed suit against rival Fiat Chrysler Automobiles (FCA) alleging that the company bribed UAW officials in order to get favorable labor contracts and disadvantage GM.
Michigan Radio's Sarah Cwiek reported that the UAW's International Executive Board unanimously voted to expel Jones.
"That kickstarted the process to remove Gary Jones and another UAW official, Director Vance Pearson.
"Both men have been implicated in a corruption scheme that involved misusing union funds for personal expenses, then covering it up.
"Both Jones and Pearson had already taken leaves of absence. Pearson already faces federal charges, while Jones has so far not been charged."
An attorney for Jones, Bruce Maffeo of New York, told The Associated Press that union president decided to resign before learning of the board's action.
Hours earlier, GM filed its federal racketeering lawsuit alleging that FCA bribed UAW officials in order to get contracts allowing the company to pay some newer employees less money — known as two-tier pay — resulting in lower labor costs.
"This lawsuit is intended to hold FCA accountable for the harm its actions have caused our company and to ensure a level playing field going forward," Craig Glidden, GM Executive Vice President and General Counsel, said in a statement.
The lawsuit alleges that FCA corrupted bargaining agreements in 2009, 2011 and 2015.
FCA responded with a statement dismissing GM's lawsuit as "this extraordinary attempt at distraction" with claims that "are nothing more than a meritless attempt to divert attention from that company's own challenges."
GM's lawsuit alleges that FCA's former CEO Sergio Marchionne authorized bribes of more than $1.5 million paid to UAW officials. Marchionne died in 2018.
It also alleges that Marchionne hoped to force higher labor costs onto GM in hopes of furthering a plan to induce the company to merge with FCA.
As Michigan Radio's Tracy Samilton reports,
"GM's lawsuit piggybacks on a federal investigation into UAW corruption that began several years ago - resulting in three Fiat Chrysler executives going to prison, along with six guilty pleas (so far) by union officials.
"Federal authorities says the executives were involved in a bribery scheme meant to keep union officials "fat, dumb and happy," (quoting one of the convicted FCA executives, Alphons Iacobelli) during contract talks.
"GM says normally, the union's pattern bargaining results in similar labor costs for all three Detroit automakers."
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