DETROIT — UAW leadership is in flux after its president abruptly resigned amid a federal corruption investigation.
Gary Jones, 62, resigned Wednesday, the first time in the UAW’s 84-year history that a president resigned midterm under such disgraceful circumstances.
Under the UAW Constitution, the International Executive Board will select a permanent replacement for Jones, said union spokesman Brian Rothenberg. The selection could open a vice president vacancy that would then need to be filled, he said.
On Nov. 2, Jones took a paid leave of absence and UAW Vice President Rory Gamble, 64, who led negotiations with Ford Motor Co., stepped in to serve as acting president.
The UAW said Wednesday that the Executive Board had initiated union charges against Jones and Region 5 Director Vance Pearson, 58, to strip their union membership.
Rothenberg said the Executive Board, which is the governing body of the UAW, has not yet set a meeting date to decide the next course of action. The board would also decide the penalty against Pearson after a trial, when he could be expelled. No trial is expected for Jones because he resigned.
Pearson faces federal criminal charges in the corruption probe, and the union accused him of embezzlement. Jones has not been charged criminally, but he has been implicated in federal court papers as UAW Official A, accused of splitting up to $700,000 in union funds with another official. Union documents accuse him of a range of misspending.
The IEB is normally made up of the UAW’s nine regional directors, three vice presidents, the president and the financial secretary. But it’s currently composed of only 12 people, given Pearson’s leave in Region 5 and Jones’ resignation. The three vice presidents are Terry Dittes, Cindy Estrada and Rory Gamble.
On Wednesday, the IEB filed its charges against Jones under Article 30 of the UAW Constitution, which establishes a process for bringing charges against officers and setting up a trial.
“The Article 30 charges, signed by the entire International Executive Board, assert that Gary Jones and Vance Pearson directed the submission of false, misleading and inaccurate expense records to the UAW Accounting Department and further concealed the true information concerning those expenses, in violation of the UAW’s Ethical Practices Code and applicable federal labor laws,” the UAW said in a news release.
Labor experts said there is little precedent in the UAW’s history to dictate how to handle an officer vacating office midterm.
Former UAW President Walter Reuther died in a plane crash in 1970 in the middle of his term. In that instance, said Rothenberg, the Executive Board had an acting president before naming a permanent successor.
There is one other example in history: Homer Martin.
“He’s little known. He was president of the UAW from 1935 thru 1937,” said Harley Shaiken, who teaches labor issues at the University of California, Berkeley. “He was removed, I believe, by the Executive Board because he had secretly negotiated with the company.”
But the widespread corruption probe involving UAW leaders is new territory because of its damage to the union’s reputation, said Shaiken. The claims are tied to an ongoing federal corruption investigation that has led to 13 criminal charges and 11 guilty pleas among former FCA executives and UAW leaders, one of whom held a GM board seat.
“The UAW for decades was the gold standard to really being strong against corruption,” said Shaiken. “There’s a real effort now with Rory Gamble as interim president and with the executive board to re-establish that.”
Wayne State University’sMarick Masters said it’s conceivable that Region 5 is not the only region involved in corruption. It’s now on the UAW to clean its house. Otherwise federal prosecutors could decide the situation warrants government oversight to ascertain if the union rooted out all the corruption.
“The government would take over and look at the union’s finances and how they conduct their elections and if people have an opportunity to participate in how they elect their leadership,” said Masters, a business professor.
Indeed, one local UAW leader who was at the 2018 convention to elect Jones and Jones’ predecessor Dennis Williams said, “We don’t really have a vote, we’re just told the way its going to go and we follow the path we’re told to follow.”
Defending the deal
The corruption probe has spread from the misspending of money from a UAW-FCA training center to the highest reaches of the union, with both Jones and Williams implicated. Though neither is charged, their homes were searched in late August and they have been implicated in documents charging other union officials.
Forcing Jones out is unlikely to be enough to put the union back on track, said Erik Gordon, a professor at the Ross School of Business at the University of Michigan.
“The fact that the union defended him for so long shows that the UAW culture at the top is a culture of protecting the leaders, not protecting the members,” said Gordon.
Local UAW leaders say the membership is troubled by the news.
“There’s a lot of anger about it,” said one local leader who asked to not be named because he is not authorized to speak for the union. “Members should expect to have honest leadership who do not misuse our dues money. The attitude is hopeful that it’s being cleaned up.”
Some members are second-guessing the integrity of new four-year contracts they ratified with GM and Ford and they lack confidence now in union leaders.
“Workers say that I’m corrupt because the workers above me are corrupt,” said a UAW local leader who asked to not be named. “We don’t touch money at the plant level. But it’s guilt through association.”
From mid-September through much of October, Jones was a daily presence in Detroit’s Renaissance Center during contract negotiations with GM. During that time, nearly 50,000 UAW members walked the picket line at GM facilities nationwide during a 40-day strike.
Jones’ presence at the talks was grossly inappropriate in hindsight, some union members say. A local UAW leader who was at the Sept. 15National GM Council meeting to vote for a strike said he and other local leaders sought to invoke Article 30 against Jones at that time, after the FBI and IRS raid on Jones’ suburban Detroit home.
“We were thinking about this way back then,” said the local leader.
But regional directors said Jones was clean, and he’d remove himself from office if he wasn’t, this person said.
“It doesn’t surprise me, and it’s disappointing as hell trying to be in this plant and defend this contract now,” said this person. “Gary Jones should have been removed.”
Likewise, Pearson was actively involved in the UAW’s negotiations with GM until Oct. 5, when the UAW finally put him on leave.
This leader said he had his regular monthly meetings with members Thursday morning and Jones was the topic of the day, he said.
“I guess it’s up to me to keep everyone calm,” said the UAW leader.
The timing of this turbulence at the top of the UAW couldn’t be worse.
The union started negotiating its final contract among the Detroit Three with FCA this week. But labor experts and UAW leaders said Jones’ resignation should not derail the talks.
“The fact that you have someone as skilled and experienced as Cindy Estrada leading the negotiations is extremely important,” said Shaiken. “Rory also brings a level of understanding and experience from the Ford talks. So you have in place people who can do the job.”
As for Gamble, Shaiken said he is popular and highly regarded by most members.
“He’s come in very forcefully,” said Shaiken. “But I don’t think he views this as the final job he wants. But we’ll see. That will be up to him and the Executive Board.”
There are other strong candidates for president, said Shaiken, but he declined to name them saying that would be “counterproductive until after things shake out.”