This article originally appeared in Labor Notes on Sept. 27, 2021. It is shared here with permission.
United Auto Workers members will soon vote in an unprecedented referendum to decide whether the union’s 400,000 working members and nearly 600,000 retirees will directly elect their top officers. Ballots hit the mail Oct. 19 and are due back Nov. 29.
The UAW’s executive officers are currently elected to four-year terms by delegates at its convention. An “Administration Caucus” has dominated these positions for the past seven decades, using the powers of appointment available to International officers to wield tight political control.
In the auto industry, where most UAW members work, many are frustrated with years of concessionary contracts that have allowed automakers to build a two-tier workforce, with the number of temporary and lower-paid workers ballooning.
“Two-tier was the worst thing,” says Mark Gevaart, who works at GM’s Fort Wayne Assembly and is a former president of Local 2209. “I work right across the line with someone making half my wage. How do we deal with that?”
For Will Hughes, a line worker at Ford’s Kansas City Assembly and member of Local 249, the referendum is about making leaders answer for the conditions members face on the job. “Right now there’s no accountability for these guys under the current delegate system,” Hughes said. “No one ever gets tossed out for doing a bad job on these contracts.”
The road leading to the referendum was paved with corruption, specifically the scandals over UAW officials embezzling and misusing funds and taking bribes from one of the Big Three employers, Fiat Chrysler (FCA). Federal prosecutors filed the first charges against FCA and UAW officials in 2017, kicking off a series of revelations, resignations, and prosecutions that continue to this day.
Much of the criminal activity centered around the FCA-UAW National Training Center, a labor-management partnership founded in the 1980s with a massive budget. Both FCA and UAW officials used the training center for personal gain. From 2009 to 2016, FCA used it to funnel $3.5 million to union leaders in hopes of influencing contract negotiations.
Outside of the training center scandal, there were also kickbacks to other union officials in exchange for contracts to produce UAW-branded merchandise, and slush funds used to finance four-figure dinners and lavish trips to Palm Springs. Cigars and golf were a recurring theme.
So far the Department of Justice has secured convictions or guilty pleas from five officials from FCA and 10 from the union, including former UAW Presidents Dennis Williams and Gary Jones. FCA was ordered to pay a fine of $30 million—though that’s chump change to a company that made a record $7 billion in profits in the first half of this year, following its merger with French automaker Peugeot to form Stellantis.
Last December the union entered a consent decree with the Department of Justice. One of its main provisions was this referendum on whether or not members should directly elect their top leaders.
Rank-and-file organizers hope that the right to vote will give members the power to break the Administration Caucus’s one-party reign.
Concessions to Corruption
Corruption in the UAW wasn’t just a few bad apples. Its roots are in the concessionary bargaining the UAW embraced in the late 1970s and ’80s and doubled down on before and during the 2008 financial crisis.
In 1979, in the wake of global oil crises and rising competition from foreign automakers, Chrysler faced bankruptcy. In response, the UAW negotiated its first contract with a Big Three automaker to walk back monetary gains, delaying raises and saving the company over $200 million (about $750 million in today’s dollars).
Then in 1980 the federal government bailed Chrysler out, and as a condition of that loan, demanded more concessions. A third round of givebacks was negotiated in 1981.
The Chrysler spectacle ushered in an era of concessionary bargaining across the labor movement. One staffer for the Food and Commercial Workers remarked at the time, “After Chrysler, everything changed.” Employers everywhere were emboldened to demand givebacks, and unions, frightened and weakened by the recession and plant closings, often said yes.
The UAW, for its part, turned increasingly to “labor-management partnership,” where the union officially rejected fighting the boss and instead sought shared interests.
At the core of these partnerships were the training centers, nonprofit institutions funded by the company and jointly run, where workers were trained to reduce labor costs and increase productivity. For years these training centers operated with massive budgets—and they became vehicles for corruption. First, through nepotism and soft jobs—the UAW-GM Center for Human Resources (CHR) was dubbed the “Center for Hiding Relatives”—and later through outright graft and embezzlement.
The 2008 Crisis
When the financial crisis loomed, the Big Three were already in rough shape and losing market share to foreign automakers, whose nonunion plants in the US South the UAW had failed to organize. In 2007, the UAW allowed a drastic “two-tier” workforce at the Big Three, where new hires would come in at half pay and be paid permanently less than existing workers. The lower tier was contractually capped at 25% of the workforce.
Then the financial crisis really hit. By 2009 Chrysler and General Motors had filed for bankruptcy and closed plants and dealerships, and were asking for more concessions. Union contracts were reopened, cost-of-living adjustments were eliminated, wages were frozen, and the cap on the number of lower-tier workers was functionally lifted.
Within six years, FCA’s workforce was 45% second-tier—plus a ballooning number of temps, who made up 13% of the workforce by 2019.
The crisis also found the UAW in a financial hole. Membership had plummeted by half since the early ’90s; the numbers only buckled further under the mass layoffs and economic downturn post-2008.
At the same time, Chrysler was looking to reduce its labor costs and make itself more attractive for a merger (the company hoped for GM but ended up merging with Fiat). A union looking for funds and a company looking for a friendly bargaining partner made a happy marriage.
What followed was the systematic embezzlement of training center funds by some top Chrysler and UAW officials and the diversion of training money to pay the salaries of International staffers. FCA even paid off a $262,000 home mortgage for the UAW’s chief negotiator with the company, the late Vice President General Holiefield. The goal was to keep him and other union officials “fat, dumb, and happy,” as FCA’s chief accountant put it.
To the surprise of many auto workers, the UAW chose Chrysler as its target company in negotiations with the Big Three in 2015, even though it was smaller and less profitable than Ford and GM. Even more concessions followed—the tentative agreement allowed the expansion of the lower-tier workforce and maintained a wide gap between the tiers.
But to UAW leaders’ shock, members voted the contract down 2 to 1. The UAW and FCA returned to the table and brought back an agreement that largely closed the wage gap between tiers over eight years, though it did not cap the expansion of the lower tier.
The Administration Caucus
What is remarkable about the UAW’s concessionary bargaining regime and subsequent corruption is how long it has lasted. For decades, members have taken giveback after giveback, with only occasional checks in the forms of “no” votes on contracts.
Part of what maintains the status quo is tight political control by the Administration Caucus, which has run the union since the 1940s. Since Walter Reuther’s time, every UAW president and almost every international officer has been a member of the caucus.
Under the current system, “delegates to the convention elect International officers,” explains Chicago Ford worker Scott Houldieson, former vice president of Local 551. “But those delegates typically are officers of the local unions. And they [the Administration Caucus] hold out the promise of being appointed to a staff position to get compliance with their candidates and their point of view on changes to the constitution.
“On the other hand, they also hold out the stick of product allocation, product being pulled from your plant [by the company] if you don’t go along. They don’t come right out and say it, but it’s always in the back of your mind.”
Former UAW President Gary Jones, who was sentenced to 28 months in prison this June, got 99.2% of the delegate vote in 2018. “That does not occur in a democratic system,” said Hughes. “One way or another, they get who they want in there.”
Cited in the consent decree were the use and misuse of “flower funds,” accounts that UAW staffers were required to contribute to but which their bosses used for internal political purposes. UAW vice presidents also each founded their own “charity,” funded by golf outings and the like. Most were hurriedly disbanded when the scandals broke.
The Members Strike Back
The push for democratic election of top officers wasn’t the idea of some federal prosecutor. It came from the membership. For decades UAW reformers have called for one member one vote—and it has always been voted down by convention delegates.
The first local to officially endorse one member one vote after the scandals, in November 2019—just after a 40-day strike at General Motors and the resignation of Jones—was Local 774, whose members work at a GM engine plant outside Buffalo. Soon 24 locals had passed a resolution calling for a special convention to amend the UAW constitution, with the goal of direct election of top officers.
Ultimately that push fell short; it received the support of locals representing 60,000 members but needed locals representing about 80,000.
The members involved didn’t give up. Unite All Workers for Democracy (UAWD), the new caucus behind the resolution push, has spent the past two years pushing for one member, one vote. It follows in the footsteps of Teamsters for a Democratic Union, which helped win direct elections in that union in a federal consent decree in the late 1980s.
UAWD members met with the independent monitor to advocate for one member, one vote and then for fair election rules to ensure that the International leadership doesn’t unduly influence the results.
Over the protests of the Administration Caucus, those rules ensure that neither local nor international UAW bodies or leaders may spend union resources on campaigning for or against an outcome in this fall’s vote.
They also provide for a national webcast forum on Oct. 7 among “registered advocates” for and against direct elections, and access to the union’s mailing and email lists. So far, the UAW has turned over to the monitor only 40,000 member emails out of a million eligible voters.
With direct elections, says Hughes, “you could hold [the leadership] accountable to the contract and other stuff that happens at convention. It’s a lot harder to control 400,000 people than it is 1,000 or so delegates.”
“What’s at stake?” asks Houldieson. “Everything, for future UAW members. If the Admin Caucus remains in control without the ability for members to really hold them accountable, then we can expect that the kind of contract negotiations that went on at Volvo are going to continue.”
UAW members at a Volvo truck plant in Virginia complained that they received almost no information on negotiations earlier this year. Following a two-week strike, 90 percent of members voted to reject two tentative agreements that raised health care costs and did not do enough to close the gap between tiers. After another strike, 60 percent rejected a third tentative agreement, before narrowly approving it a few days later when the union forced them to vote on on it again.
The lead negotiator was Ray Curry, head of the UAW’s Heavy Truck Department and now UAW president.
“If we want a union that’s willing to take on the company,” says Houldieson, “we’re going to have to change course, change leadership—and that’s not likely to happen without one member, one vote.”
Dan DiMaggio contributed to reporting for this article. The article benefited from material in The UAW: An Iconic Union Falls into Scandal by Wayne State University business professors Marick Masters and Frank Goeddeke, as well as reporting by Labor Notes staff.