Sergio Marchionne, CEO of Fiat Chrysler Automobiles N.V., apparently met with the U.S. attorney in Detroit to discuss the federal government’s ongoing investigation into criminal activity involving a joint training fund maintained by FCA and the United Auto Workers.
During the interview last year, Marchionne was accompanied by a prominent criminal attorney, according to press reports that emerged this week.
General Motors and Ford officials have recently confirmed that they are also cooperating with the federal probe into the joint training centers they operate with the UAW with money from the so-called “nickel fund,” which was created in the 1980s to help pay for training of autoworkers. The fund collects what amounts to a small tax for every hour of overtime worked by UAW members.
Two people, including one senior UAW official, Virdell King, and an FCA auditor, James Durden, have already pled guilty. Meanwhile, Al Iacobelli, FCA’s former head of labor relations, and Monica Morgan Holifield, the widow of General Holiefield, the former head of the union’s Chrysler Department in the critical period after Fiat brought Detroit’s number three automaker out of bankruptcy.
(Federal probe of union funds spills over to Ford, GM. For the story, Click Here.)
The federal indictment unsealed in July said Iacobelli, Holiefield and his wife siphoned off more than $4.5 million for personal use. Holiefield used the money to pay off the mortgage on his home outside Detroit, while Iacobelli used the money for a series of home improvements, a Ferrari, which has been seized by the government, and collectible Mount Blanc fountain pens.
The head of the Detroit FBI, David Gelios, said “years of fraud and corruption within a select group of the FCA and UAW hierarchy continue to be eroded through the diligence and collaboration of law enforcement.”
In a statement, Marchionne said the “deplorable” conduct “had nothing whatsoever to do with the collective bargaining process” and the “egregious acts were neither known to nor sanctioned by (Fiat Chrysler).”
Upon learning of possible malfeasance in June 2015, FCA officials said, the company investigated the matter and, as a result, fired Iacobelli and Durden after obtaining credible evidence of wrongdoing. The company has also worked with the UAW to implement governance, auditing and structural reforms to improve the accountability and transparency of the NTC.
(Click Here for details about an FCA analyst pleading guilty in UAW scandal.)
Marchionne, however, also had developed a close relationship with Holiefield and delivered an effusive eulogy at the former UAW official’s funeral in 2015.
“I had the honor and privilege of working for five years with General Holiefield on the same dream: the rebirth of Chrysler,” noted Marchionne in his eulogy of Holiefield. “We met at a time that certainly wasn’t one of the best for the auto industry.”
He described Holiefield as trusting, optimistic and sincere.
“In the end, it is often in the darkest and most difficult moments that we get to see someone’s real character. I knew him as honest and straight-talking,” Marchionne said.
“His assessment of what was happening to the U.S. auto industry, Chrysler included, was – and I quote: ‘They went to sleep at the wheel; they forgot about the competition and while they were lured asleep someone else began to eat their lunch. When they began to wake up and realize, it was a bit too late.’”
(For our initial report on the indictments, Click Here.)
“He always put the interests of others before his own,” he said.