September 13, 2019 / 2:07 PM / 2 months ago

Scandal-hit UAW agrees to contract extensions with Ford, FCA

DETROIT/WASHINGTON (Reuters) - The United Auto Workers union agreed to temporary contract extensions with Ford Motor Co and Fiat Chrysler Automobiles NV on Friday as it grappled with a federal corruption probe that has implicated its president.

FILE PHOTO: United Auto Workers President Gary Jones delivers remarks at the opening plenary session of the National Association of the Advancement for Colored People's annual convention in Detroit, Michigan, U.S. July 22, 2019. REUTERS/Rebecca Cook/File Photo

But a Saturday midnight deadline for the UAW to agree on a new four-year labor contract with General Motors Co currently remains in place, a union spokesman said.

UAW President Gary Jones and his predecessor were two of the unnamed officials singled out in a federal criminal complaint released Thursday detailing alleged corruption and embezzlement by union leaders, a source familiar with the matter said on Friday.

The complaint has raised questions, not only about the once powerful union’s leadership, but about the status of the collective bargaining talks with Detroit’s automakers.

The complaint detailed charges against Jones’ former second in command and successor as head of the UAW’s “Region 5,” Vance Pearson.

It also referred frequently to several unnamed figures, in particular “Official A” who is Jones, and “Official B,” his predecessor Dennis Williams, said the source, who spoke on condition of anonymity.

The union had targeted GM, the largest U.S. automaker, as the one it wanted to conclude contract talks with and set a pattern for subsequent agreements with Ford and Fiat Chrysler

This year’s talks were widely expected to be contentious, focusing on thorny issues like healthcare costs and profit-sharing at a time when U.S. new vehicle sales are declining.

But according to sources briefed on the matter, the searing complaint throws into question whether talks will continue between GM and the UAW ahead of the Saturday deadline.

Two people briefed on the matter say GM may ask for a temporary extension of the contract and could pursue other options including seeking assistance from a third party.

It was not clear if the talks with GM will continue with the current UAW president under investigation.

In a statement, Ford said it agreed with the union to extend the contract talks while the focus “remains on reaching a fair agreement with the UAW.”

Rory Gamble, the official who oversees the UAW’s relations with Ford, said a contract extension was “not unusual and commonly occurs when another company has been identified as the lead.”

Neither Jones nor Williams has been charged with any wrongdoing. The UAW did not comment on reports implicating the two, which first surfaced in the Detroit News.

The union had hoped to put the growing federal probe behind it by electing Jones, a former regional director for the union, as president in 2018. However, Thursday’s arrest implicated the second in command in the region Jones ran.

Jones was chosen as he seemed far removed from the scandal.

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But two weeks ago, the FBI raided Jones’s home, a union retreat and multiple other locations as part of the corruption probe.

The federal complaint filed on Thursday said government agents had seized $30,000 in cash from the residence of Official A.

A lawyer for Jones could not immediately be reached for comment on Friday.

Additional reporting by Ben Klayman; Editing by Chizu Nomiyama and Tom Brown

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