Members of United Auto Workers Union Local 961 in suburban Detroit have sued both the UAW International and Fiat Chrysler Automobiles to prevent the automaker from transferring an axle plant in Marysville, Michigan, to the giant German automotive supplier ZF.
The lawsuit asks a federal judge to halt the transition of the plant, which makes axles for the Jeep Grand Cherokee and Ram pickup, and give the Local the opportunity to determine if any of the corruption cases in which both UAW and FCA officials have plead guilty to violations of federal labor law might have tainted the transaction.
So far, five UAW officials and three FCA employees, including former FCA vice president of labor relations Alphons Iacobelli, have plead guilty in the federal investigation that originally began nearly several months before the original indictment was made public in 2017.
Iacobelli said he set up a scheme that diverted thousands of dollars in joint training funds into the pockets of union officials to influence the administration of the FCA-UAW labor contract. Iacobelli also admitted taking more than $800,000 in training funds to cover the cost of extensive improvements to his private residence in suburban Detroit, the purchase of used Ferrari and the acquisition of a collectible Mont Blanc fountain pen valued at $50,000.
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General Holiefield, the head of the UAW’s Chrysler Department, who died in 2015, also took more than $262,000 in training funds to pay off the mortgage on his suburban Detroit home. Holiefield’s widow, Monica Morgan, also has plead guilty to federal tax evasion charges.
All of the former UAW and FCA officials that have pleaded guilty in the scandal, the largest ever involving the UAW, have remained free on bond at the request of federal prosecutors so as they continue with the investigation. The defendants in the case are expected to begin returning to prison this coming summer.
Federal prosecutors also appear to have targeted Holiefield’s successor as head of the UAW’s Chrysler Department, Norwood Jewell, who abruptly quit the union’s executive board at the end of 2017. Jewell, however, has not been charged with any crimes.
(Click Here for the latest about UAW and FCA officials sentenced in the bribery scandal.)
ZF has leased the Marysville plant and its employees from FCA for more than a decade under a deal first negotiated during Holiefield’s tenure as head of the UAW’s Chrysler Department. The agreement was renewed in 2010 and 2012.
The UAW has insisted since the summer of 2017 that the illicit payments to union officials were a matter of personal greed and never had any influence on the UAW negotiations or representation.
“There are many layers of checks and balances in our contract negotiations and ratification, including membership voting, and we are confident the terms of our UAW contracts were not impacted by Iacobelli’s fraudulent conduct at the NTC. The UAW has and continues to respond by making changes to ensure this type criminal behavior will not happen again,” the union noted last summer.
(Proposed class action lawsuit against UAW, FCA dismissed. Click Here for more.)
FCA also has repeatedly said that it was a victim of the scheme because the diverted money had been earmarked specifically for the training of employees.