The Future of the UAW in Light of Recent Corruption Scandals

Ron Lare

January 26, 2018

Since this article was first written, FCA (Fiat-Chrysler) official Al Iacobelli has admitted in a plea deal that money spent on UAW officials was intended to influence UAW-FCA contract bargaining. Wider-ranging prosecutions now seem even more likely.

There is some good news. On Jan. 21, UAW Local 12, FCA-Jeep, bussed several hundred workers from Toledo to Detroit to protest outsourcing of UAW drivers’ jobs in a rally outside the Auto Show. Local 12 members were joined by UAW 212 (FCA-Detroit drivers) and other locals. This action reflects membership anger and perhaps a desire by replacement UAW-FCA leadership to re-assert UAW power. The rally showed the potential for militant UAW rank-and-file and UAW leadership unity, something gravely damaged by the UAW corruption scandal considered in this article. (A Local 12 member I interviewed at the rally expects Detroit’s infamous scoundrel-capitalist Matty Maroun’s trucking company to get the contract for the Toledo drivers’ work.)

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How financially close do you want your union rep and your supervisor, or your union and company management to be? This is a question on the minds of members of the United Auto Workers (UAW).

For the past two years the news media have focused on corrupt use of joint company and union training programs money by a now-deceased UAW-FCA (Fiat Chrysler Automobiles) vice president and a now-former vice president of labor relations at FCA. Lately the spotlight has also turned to possible prosecution of additional Big 3 auto company and union officials. A separate kind of fund is being investigated as well. These are UAW officers’ broadly-defined charity or social justice funds. There, too, prosecutions seem possible, if there is any company money in the charity funds.

I am ambivalent about this news. Prosecutions will expose my union, the UAW, to attack from the Trump administration. But the corruption itself needs to be addressed, for it confirms the view of many UAW members that the company and union are “the same thing.” The real problems are deeper than corruption, and can probably only be addressed by a new wave of social movements originating outside the union structure. That is a view I will elaborate on later. I begin, however, with the corruption scandals that dominate the headlines.

The problem of corruption is clear from UAW International President Dennis Williams’ own words, quoted in the Detroit Free Press last month:

A former officer of the UAW was implicated in allegedly defrauding the FCA (Fiat Chrysler) national training center for personal gain, along with other company officials and a few [UAW] international reps….
“These allocated funds were not union dues nor were they union funds. Nevertheless these individuals have been charged with a criminal offense and based on the info we have, we believe several former UAW officials acted in clear violation of UAW policy.

The scandal’s immediate consequences for organizing

In another story, The Detroit Free Press drew the connection between federal indictments and the UAW’s failed unionization campaign in Mississippi:

In July, just weeks before a scheduled union vote at the Nissan plant in Mississippi, federal investigators indicted Al Iacobelli, former Fiat Chrysler vice president of labor relations, and Monica Morgan, widow of General Holiefield, former UAW vice president. Millions of dollars earmarked for UAW worker training was spent on unauthorized purchases including a $365,000 red Ferrari, two solid gold fountain pens valued at $35,700, a pool and outdoor spa at Iacobelli’s mansion.

Nissan could not have written a more damaging Vote No leaflet against UAW organizing. The ink pens alone are worth more than a newly-hired assembly line worker’s annual take-home pay.

UAW members do need to remember that while they could win more with better leadership, most UAW auto workers (including myself as a retiree) fare far better than non-union industrial workers. And non-union workers at automaker transplants (Volkswagen, Nissan, etc.) earn wages similar to those negotiated by the UAW. But if the UAW collapses because we cannot find a way to organize the unorganized, those transplants as well as the Big 3 U.S. auto companies will end the benefits granted to keep the UAW out.

In the current scandal, we’ll differentiate between two categories: Joint Training Programs and Social Justice Charity Funds.

Joint training programs: UAW officials allegedly diverted money from these funds to purchase the expensive gifts cited above, among others. President Williams says this is money only from the companies, not UAW dues. But members say company money contractually funneled into joint programs should instead go into base hourly wages and pensions, including for new-hires. The new-hires are second class citizens without pensions, starting at half pay and slated never to catch up. What kind of “training program,” they ask, beats a living wage?

Social justice charity funds: These funds are named for the officers who set them up. Prosecutors seem to be looking for direct theft of joint programs’ money, but also what one might call collaborationist intent. A Detroit headline reads, “Bargaining rivals stole millions from FCA; kept UAW officials ‘fat, dumb and happy’”. UAW charitable foundations have “received money from an automaker’s training center.” UAW officials’ anxiety is shown by their closing some of the funds that now “can distribute money already banked, but cannot legally solicit any more.”(Detroit News).

Perhaps behind the big picture was an unspoken thought: “Maybe we can boost the UAW’s reputation for social justice without old-school street action, if some of that training money goes to UAW funds for good causes.” While motivating some sincere activists whom we know, such a formula can entice the dishonest, and defy union democracy, class struggle, and federal law.

Why is the government attacking collaboration between union and management? It’s not for our reasons, not in order to resurrect democratic, fighting unions. Rather, it’s an excuse to crush the leaders and the unions themselves. Trump government prosecutors claiming to act in UAW members’ interests are as credible as Trump’s tweets. The Department of Labor just now dropped charges against Honeywell, which savaged the UAW with a ten-month lockout ending last year. The National Labor Relations Board and courts will almost certainly deprive the UAW of its small skilled trades unit at Volkswagen in Chattanooga. The UAW won’t be reformed by the government of Republicans and Democrats who gave us NAFTA and let the proposed pro-union Employee Free Choice Act die. For any solution we need political action independent of Republicans and Democrats.

UAW members’ reaction to President Williams’ defense of UAW leadership

Williams acknowledges some officers’ wrongdoing but counters, “Our members are getting pay increases.” He cites bonuses at Ford, GM, and Chrysler. But bonuses are a crap-shoot based on fluctuating profits, not an increase in hourly base pay. Raises have not matched inflation. Newer, second tier workers’ pay has risen somewhat. However, this is partly because the companies have been forced to pay more in order to find workers willing to endure high intensity assembly-line labor. This “higher pay” is in some places no more that what some cities propose to be the legal minimum wage.

Another Free Press article says Williams’ “won the first membership-approved dues increase in decades.” But the dues increase was passed at a delegated Convention, outraging the members who never voted on it. A union known for fighting would be justified in raising dues. But there are also ways to increase dues income without raising rates (dues are 2.5 hours pay per month): Win higher hourly pay and organize new members!

Why has the UAW declined more dramatically than other unions?
Some just say, “The leadership sold out.” But that’s not limited to the UAW. It’s not an explanation.

For reasons specific to the auto industry, the UAW faced an especially bald choice between organizing for international solidarity and surrendering to a protectionist, nationalist course.

Unions in sectors more tied to local economies—such as food service, medical care, or government—are less immediately susceptible to international competition than auto. For workers in the internationalized auto market, solidarity with international unions and workers’ movements is essential.

The UAW leadership went from a kind of semi-internationalist, social democratic ideology to a nationalist, protectionist version of neo-liberalism, now even turning Dennis Williams soft on Trump.

Two solutions: Community and International Solidarity

Radical communities leading organizing drives

Union activist rebellion against the UAW’s Solidarity House leadership and in favor of shop floor action is necessary but not sufficient. Reform of the UAW is not possible without outside community intervention, especially in the case of organizing new workforces.

After all, the most democratizing force in UAW history originated outside the union. The Civil Rights Movement intervened to establish the effective right to elect Black officers and to make corresponding changes on the shop floor (although incompletely, as one can see from Black, Arab-American and Latino/a workers’ under-representation in skilled trades). Women’s effective right to work in auto plants required Women’s Movement pressure and lawsuits (rights also incomplete, in light of women’s under-representation in both production and skilled trades and recent New York Times and other exposés of auto plant sexual harassment).

The League of Revolutionary Black Workers in Detroit brought radical activism developed outside to bear against the UAW bureaucracy inside the plants (Watch the film, “Finally Got the News.”) Community women fought in the streets of Flint during the sit-down strikes (Watch “With Babies and Banners”). To organize my own Ford Rouge Plant, NAACP youth rebelled against their conservative elders, using a sound truck to call Black workers out of the factory. The Ford Hunger March on the Rouge Plant was led by the unemployed.

Current reform forces like the rank and file Auto Worker Caravan are doing good work. In my own local I see reformers struggling in the Truck Plant, Dearborn Diversified, and other units. These forces are preparing resolutions and candidates for this year’s UAW Constitutional Convention. However, they and predecessors such as the New Directions Movement have been badly repressed and fragmented by the bureaucracy. It’s hard to connect with newly-hired workers and temps who tell us they risk their jobs just for requesting a first aid pass, let alone speaking out.

In the UAW Principles for Fair Union Elections, the current leadership identifies fully with the companies:

In order to promote the success of our employers, the UAW is committed to innovation, flexibility, lean manufacturing, world best quality and continuous cost improvement. Through teamwork and creative problem solving, we are building relationships with employers based upon a foundation of respect, shared goals and a common mission. We are moving on a path that no longer presumes an adversarial work environment with strict work rules, narrow job classifications or complicated contract rules.

Given that attitude, the most likely scenario for organizing Mercedes, Nissan or Tesla involves not just the shop floor but an outside community deciding to promote a strike that drags along or replaces its reluctant UAW leadership. Such a strike could electrify unions around the U.S. and the world like no “corporate campaign” could. Auto workers could follow the example of immigrant workers who sometimes go on strike, then contact a union.

Radical international solidarity replacing nationalist protectionism

A UAW Local 600 skilled trades committeeperson told me, “The companies globalized. We didn’t.” This guy was not a leftist. As a U.S. Marine he had been a bodyguard for Nicaraguan dictator Anastasio Somoza.

Under Victor Reuther, brother of President Walter Reuther, the UAW International Department had opposed protectionism. The Reuthers acted against the left, especially in my own local, but understood something about international solidarity. That position was replaced. As international competition increased and US workers’ conditions deteriorated, the leadership sought to pin the blame on Asian and Latin American nations rather than predominantly-white European nations.

When the UAW abandoned past gains in a contract a few years ago, a Detroit newspaper called the resulting contract “an import fighter.” In other words, the business press congratulated the UAW leadership on underbidding international competition in the race to the bottom. The UAW needs not just the remnants of internationalism–attending some conferences and writing articles–but walking picket lines organized by global union coalitions aiming for joint contract expirations and political campaigns.

A bit of optimism

None of that is likely soon. However, one of the Ford workers who read a draft of this article argues that natural youth rebellion; auto new-hires seeing their pay barely above fast-food workers’ “Fight for $15” wages; senior workers’ instinctive solidarity; and recent close Big 3 contract votes are all leading indicators of rebellion.

Conditions for new hires are approaching pre-UAW auto plant oppression. Compared to my generation new hires have less experience with traditional UAW solidarity and strong leadership. However, they have more to rebel against and they defer less to capitalism and its major political parties. Their creativity in organizing today may surprise the world as much as the sit-downs of the 1930s and the local independent political defense that those strikes inspired.

How far the UAW is from successfully organizing auto plants today, and the changes needed, are best covered in Labor Notes.

The UAW academic worker locals—mostly university teachers—have taken especially progressive positions. Auto workers trail them there, but the two can converge first around the fight for an aggressive and democratic union.

Thanks to Scott Houldieson for fact-checking some passages in this article.

Ron Lare is a retired UAW Local 600 member.