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Howes: The UAW's day of reckoning is coming

Daniel Howes
Detroit News

The birthplace of the modern American labor movement is facing a reckoning.

Thank a growing cadre of United Auto Workers leaders, including two of the past three presidents.

Their scheming and embezzling, alleged and admitted, is pushing the 85-year-old union to the brink of federal oversight and racketeering charges, the tool the feds have long used to fight organized crime.

In the decade since American taxpayers rescued two Detroit automakers and bestowed a sweetheart deal on the UAW outside the rules of bankruptcy law, the union faces an existential crisis.

One of its own making.

It’s not because the U.S. auto market tanked, or because automakers are disappearing. It’s because a “culture of corruption” flourished under UAW presidents who didn’t hail directly from the union’s beating automotive heart and forgot who they work for – rank-and-file members.

It’s because high-level execs at Fiat Chrysler, plump with an infusion of taxpayer dollars, hatched a years-long scheme to corrupt union leaders, according to court records, reporting by The Detroit News, and a lawsuit filed by rival General Motors.

The goal was straightforward. Lower Fiat Chrysler’s costs. Inflate the costs of GM, and weaken it enough to force a merger that Fiat Chrysler boss Sergio Marchionne would control.

It never happened. He died two summers ago, spurned by GM and unable to find a partner for the recovering Italian-American automaker. His legacy is tarnished by the ugly emergence of UAW corruption that he can’t be blamed for creating in St. Louis and Palm Springs, Flint and Pennsylvania.

But he helped turbo-charge it.

Now the union that Walter Reuther built, deeply rooted in the modern American auto industry, is hurtling toward a reckoning with its members, with the feds, and with racketeering statutes.

This week, The Detroit News reported that President Rory Gamble is also under investigation for ties to a UAW vendor. He’s suspected of paying kickbacks in exchange for contracts to provide union-branded golf shirts and Kangol hats, among other things. The vendor’s attorney and Gamble reject the allegations, but the implication is sobering for the UAW:

The union, a cornerstone of labor in Michigan, in the country and in Democratic politics, is headed for federal oversight.

What does that portend for its role as a kingmaker in Democratic politics? A lot in the Midwest, especially in Governor Gretchen Whitmer’s Michigan, a state that looms as a major battleground for the 2020 general election. Democrats will need all the help they can get to keep President Donald Trump from winning the state a second time.

That’s why this drip-drip of legal troubles for top union leaders is making ranking Michigan Democrats so nervous. They know they need UAW foot soldiers in the run-up to the general election – and whatever campaign contributions they could muster.

More trouble looms: a grassroots movement of rank-and-file members is growing to demand direct election of union officers – a break with 70 years of tradition.

Yep, the reckoning awaits.

Daniel Howes is columnist and associate business editor of The Detroit News. A former European correspondent for The News, he has reported from nearly 25 countries on three continents and in the Middle East. Before heading to Europe in 1999, Howes was senior automotive writer and a business projects writer. He is a frequent contributor to NewsTalk 760-WJR in Detroit and a weekly contributor to Michigan Radio in Ann Arbor.
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