FacebookTwitterRedditEmail

Fiat Chrysler/UAW Corruption Case Shows How Labor-Management Cooperation Profits the Companies

The Wages of Collaboration

The indictments involving a Fiat Chrysler exec and a UAW official should confirm long-held suspicions that the “team concept” and cooperation between union and company has led to bad contracts, and sapping the fighting spirit of the members. Charges have been laid against Al Iacobelli, former VP of Fiat Chrysler, and Monica Morgan, wife of former UAW VP General Holiefield. (Holiefield himself was not indicted because he died in 2015.) Charges may be laid against further company and union officials.

Despite Fiat Chrysler and UAW claims, this is not the result of a few corrupt individuals – it is the inevitable consequence of decades of a culture of class collaboration.

The problem is union leaders who start to identify more with corporate executives than with the workers, and who see union office as a path to self-enrichment.

This also raises questions about the 2016 negotiations between GM and Unifor, representing Canadian GM workers – since Iacobelli was a leading member of the GM management team. (GM had hired Iacobelli after he ‘left’ Fiat Chrysler).

“Fat, dumb and happy”

Iacobelli and Holiefield conspired over at least 6 years to both enrich themselves, and also, to pay off other top UAW reps, in what was described as an effort to keep the union reps “fat, dumb and happy”. The brazen theft involved diverting funds from the negotiated National Training Center (NTC) to pay for such things as a Ferrari Spider ($350,000) and 2 solid-gold Mont Blanc pens ($37,500 each) for Iacobelli, and paying off the mortgage on the house owned by Morgan and Holiefield ($262,219). But the most important lesson to learn is that the source of the corruption was the culture of labour-management cooperation, or “team-concept” that has spread like a cancer through the North American labour movement.

Jointly-administered slush fund.

Fiat Chrysler contributed between $13 million and $31 million per year to the NTC, a joint company-union program that was supposed to provide education and training for union members. Corrupt practices were made easier because the fund was designed to serve as a slush fund, jointly administered by Iacobelli and Holiefield with no oversight. Funds were siphoned off directly to pay for air travel and lavish hotel suites including a four-night stay for Holiefield (at $3,100 per night) in the Beverly Hills Hotel in California. Credit cards were issued to senior UAW negotiators, as described in this Detroit Free Press account on July 27:

Starting in 2012, Iacobelli saw to it that Holiefield and other senior UAW officials obtained National Training Center credit cards. He directed Durden [a Fiat Chrysler Financial Analyst] to obtain the cards. The financial analyst obliged. And the union officials were encouraged to use them for personal expense. According to the indictment, Durden reported that he, Iacobelli and others at FCA “had created a liberal spending policy for the NTC-issued credit cards as part of their effort to keep the senior members of the UAW Chrysler Department ‘fat, dumb and happy.’ ” The cards were used liberally. The indictment alleges Holiefield made more than $200,000 in personal purchases on his credit card, including jewelry, furniture, designer clothing and other items. Iacobelli authorized the charges. Durden collected Holiefield’s credit card statements, instructing members of the NTC accounting staff “not to open, examine or review the NTC credit card statements.”

Phony children’s charity

Even more distasteful was the fact that Holiefield created a fake children’s charity, the “Leave the Lights on Foundation”. Iacobelli funneled hundreds of thousands of dollars from the NTC through the foundation to Holiefield and Monica Morgan. Companies owned by Morgan received money from the foundation and from the NTC, including getting the contract to provide T-shirts, mugs and other items to the NTC without submitting a quote or a bid. Most of that money went to Morgan and Holiefield’s lavish personal expenses. In the words of Fiat Chrysler’s financial analyst Durden, the payments were “an investment in relationship building” with Holiefield.

Two-tier wages and brutal 10-hour shifts

What did Fiat Chrysler get in return for this investment? As reported by David Barkholz in the Automotive News June 9, 2015:

FCA negotiated the best contract of the Detroit 3. FCA’s overall labor costs since the four-year UAW contract was signed in the fall 2011 have nudged up less than 1 percent per year. Consequently, FCA enjoys nearly a $10 an hour labor cost advantage over Ford and GM.

In addition, Fiat Chrysler gained the union’s support in implementing a brutal Alternative Work Schedule (AWS) of regular 10-hour days with no overtime pay. The AWS is also known as the 3-2-120 schedule because three crews work two shifts for 120 hours a week. For example, at the Jefferson North Assembly plant in Detroit, the “A” crew works 10 hours a day on day shift from 6 a.m. to 4:30 p.m. Monday through Thursday. The “B” crew works 10 hours on night shift 6 p.m. to 4:30 a.m. on Wednesday through Saturday. The “C” crew works 10 hours on the night shift Monday and Tuesday and 10 hours on the day shift Friday and Saturday.

Both Fiat Chrysler and the UAW now claim that the corruption was just the acts of individuals. They both say the “didn’t know”. But Holiefield and the other UAW reps at Fiat Chrysler were not acting on their own in capitulating to management demands. The concessions they made were part of the overall strategy of concession bargaining followed by the UAW leadership for many years. In 2007 the UAW had agreed to allow the auto companies to hire second tier workers at half the regular rate with inferior benefits and no pensions. Even before that, the UAW leadership had argued that workers had common interests with the corporations, and that they had to help keep the companies “healthy” and profitable by implementing “team concept”. The UAW had agreed to joint programs and joint funds back in the early 1980’s. Since management still made the decisions, this so-called “team concept” just meant the union became tied in to enforcing those decisions. It was just a capitulation to the corporations, who always strive to maximize their profits, pay workers the least they can get away with, and speed up the work until it is destroying the health of the workers. What is desperately needed are union leaders that understand that “the working class and the employing class have nothing in common” – and that their role is to fight for the working class.

CAW/Unifor leaders also cozy up to corporate execs

Instead of fighters, we have union officials who would rather rub shoulders with corporate executives and their political lapdogs than associate with the workers. This has been the case with the autoworkers in Canada as well. Former Canadian Auto Workers President, Buzz Hargrove swooned when he got a pat on the head from Magna head Frank Stronach – and gave him the infamous no-strike agreement in return. This was a pattern with Buzz – he liked to chum around with corporate execs, like ONEX head Gerry Schwartz. After Buzz was taken on a tour of Israel at Schwartz’s expense, he turned into an apologist for the Israeli onslaught on Gaza. Later, Buzz delighted in putting a union jacket on then Liberal Prime Minister Paul Martin.

In 2013 the CAW merged with the CEP and formed Unifor. The current Unifor president, Jerry Dias is following the same political path as Hargrove. He is smitten with Canadian Prime Minister Justin Trudeau, and supports the Ontario Liberal government of Kathleen Wynne. Last year at a General Motors photo op announcement in Oshawa, attended by Trudeau and Wynne, Jerry refused to sit with members of the union local (Unifor Local 222) because he wanted to be as close as possible to the GM executives and Trudeau (see picture). A few months later, at the Oshawa ratification meeting for the new GM contract, Jerry was being questioned by a member of Unifor Local 222 who was calmly asking a reasonable question. His response was “You’re a f-ing idiot”.

Is Al Jerry’s Pal?

Most disturbingly – listen to Jerry’s response to the charges of fraud against Al Iacobelli:

“Jerry Dias, president of Unifor, the union that negotiated with Iacobelli for Canadian autoworker contracts, said he always viewed him as a professional labor executive.

I’ve probably known Al for 15 years. … This is right out of left field. I never would have expected it,” Dias said. “I’m in shock, to say the least.”

Could Jerry really have been totally unaware of the corrupt dealings between Iacobelli and UAW reps? He says he was “shocked” – Unifor members would like to know if he was also angry and working to prevent similar events here. There was widespread opposition to the 2016 contracts between Unifor and the auto companies. Many members were angry that new hires on the assembly line start at $15 per hour less than longer-term workers, and won’t get equal pay for more than 10 years. They also get an inferior pension. The ratification votes at all three companies were the lowest in the history of the Canadian union. Did Jerry’s demonstrated chumminess with corporate leaders and Liberal politicians influence what was negotiated?

UAW and Fiat Chrysler Cover-ups

After Iacobelli was indicted, Fiat Chrysler said they had fired him when they became aware of his fraud. But at the time Iacobelli left, they were happy to leave the impression that he had retired. Similarly, the UAW allowed Holiefield to serve out his term of office and retire with a pension in 2014, even though there had persistent complaints about Holiefield’s corruption for years. Even the indictment mentions that the then UAW President had cautioned Holiefield and Iacobelli over their financial dealings in 2011. Both the corporation and the union preferred to cover things up to preserve their public image.

Now that the indictments have come down, both the company and the union swear that the corruption had no influence on negotiations between the two. If you believe that, you must believe that Brian Mulroney had provided nothing in return for the three envelopes containing $300,000 in cash that Karlheinz Schreiber handed him in hotel rooms.

But the biggest thing that the UAW leadership and Fiat Chrysler want to cover up, is that their dedication to “labor-management cooperation” is to the benefit of the corporation and is against the interests of the union members. If the union had a culture of uncompromising struggle against the corporate elite, the union official that wanted to rub shoulders with executives and flaunt a lavish lifestyle would have stuck out like a sore thumb.

This article was originally published by the Unifor Solidarity Network.

More articles by:

James Napier is a veteran Unifor autoworker.

March 20, 2019
T.J. Coles
Countdown to “Full Spectrum Dominance”
W. T. Whitney
Re-Targeting Cuba: Why Title III of U.S. Helms-Burton Act will be a Horror Show
Kenneth Surin
Ukania’s Great Privatization Heist
Howard Lisnoff
“Say It Ain’t So, Joe:” the Latest Neoliberal from the War and Wall Street Party
Walter Clemens
Jailed Birds of a Feather May Sing Together
George Ochenski
Failing Students on Climate Change
Cesar Chelala
The Sweet Smell of Madeleine
Binoy Kampmark
Global Kids Strike
Nicky Reid
Where Have All the Flowers Gone?: Requiem for a Fictional Party
Elliot Sperber
Empedocles and You and Me 
March 19, 2019
Paul Street
Socialism Curiously Trumps Fascism in U.S. Political Threat Reporting
Jonah Raskin
Guy Standing on Anxiety, Anger and Alienation: an Interview About “The Precariat”
Patrick Cockburn
The Brutal Legacy of Bloody Sunday is a Powerful Warning to Those Hoping to Save Brexit
Robert Fisk
Turning Algeria Into a Necrocracy
John Steppling
Day of Wrath
Robin Philpot
Truth, Freedom and Peace Will Prevail in Rwanda
Victor Grossman
Women Marchers and Absentees
Binoy Kampmark
The Dangers of Values: Brenton Tarrant, Fraser Anning and the Christchurch Shootings
Jeff Sher
Let Big Pharma Build the Wall
Jimmy Centeno
Venezuela Beneath the Skin of Imperialism
Jeffrey Sommers – Christopher Fons
Scott Walker’s Failure, Progressive Wisconsin’s Win: Milwaukee’s 2020 Democratic Party Convention
Steve Early
Time for Change at NewsGuild?
March 18, 2019
Scott Poynting
Terrorism Has No Religion
Ipek S. Burnett
Black Lives on Trial
John Feffer
The World’s Most Dangerous Divide
Paul Cochrane
On the Ground in Venezuela vs. the Media Spectacle
Dean Baker
The Fed and the 3.8 Percent Unemployment Rate
Thomas Knapp
Social Media Companies “Struggle” to Help Censors Keep us in the Dark
Binoy Kampmark
Death in New Zealand: The Christchurch Shootings
Mark Weisbrot
The Reality Behind Trump’s Venezuela Regime Change Coalition
Weekend Edition
March 15, 2019
Friday - Sunday
Andrew Levine
Is Ilhan Omar Wrong…About Anything?
Kenn Orphan
Grieving in the Anthropocene
Jeffrey Kaye
On the Death of Guantanamo Detainee 10028
Stan Cox – Paul Cox
In Salinas, Puerto Rico, Vulnerable Americans Are Still Trapped in the Ruins Left by Hurricane Maria
Ben Debney
Christchurch, the White Victim Complex and Savage Capitalism
Eric Draitser
Did Dallas Police and Local Media Collude to Cover Up Terrorist Threats against Journalist Barrett Brown?
Jeffrey St. Clair
Roaming Charges: Straighten Up and Fly Right
Jack Rasmus
Trump’s $34 Trillion Deficit and Debt Bomb
David Rosen
America’s Puppet: Meet Juan Guaidó
Jason Hirthler
Annexing the Stars: Walcott, Rhodes, and Venezuela
Samantha M. - Angelica Perkins
Our Green New Deal
Mel Gurtov
Trump’s Nightmare Budget
Steven Colatrella
The 18th Brumaire of Just About Everybody: the Rise of Authoritarian Strongmen and How to Prevent and Reverse It
Evaggelos Vallianatos
Riding the Wild Bull of Nuclear Power
Michael K. Smith
Thirty Years Gone: Remembering “Cactus Ed”
FacebookTwitterRedditEmail