UAW President Jones Risks Upending Union’s Long Tradition of Leadership Integrity

Surely Walter Reuther and Doug Fraser are rolling over in their graves. For all the bad situations that business leaders can find themselves in these days, United Auto Workers President Gary Jones is in about one of the worst: as a target of a fast-expanding federal probe into corruption.

And it’s even worse because Jones is the besmirched chief of a proud union whose founders, such as Reuther, and later leaders of demonstrated integrity, including Fraser, made sure that, whatever else the critics of the UAW could say about one of America’s most powerful organized-labor groups, they couldn’t say it was corrupt.

Jones’s situation leaves the union and its rank-and-file with flaccid leadership, rattled and unable to enjoy fully what it might consider a “victory” for gains made during the just-concluded six-week strike against General Motors. Even worse, in the wake of the demonstration of its remaining power against the marquee member of the Detroit Three automakers, the UAW is still dwindling and is more uncertain of its future now than ever.

Rory Gamble, vice president in charge of the UAW Ford department that just reached a deal with America’s No. 2 automaker without a strike, has become acting president and vowed in a letter to union members that he is “angry” with the stains caused by the investigation but “not here to pre-judge anyone. I am here to take this union forward.” He may follow in the tradition of other UAW presidents, such as Owen Bieber and Steven Yokich who, even while not possessing quite the leadership or rhetorical skills of Reuther or Fraser, also demonstrated integrity.

Jones is taking a leave of absence as federal prosecutors in the widening corruption investigation appear to be closing in on possible charges against him and, even worse, are investigating his predecessor, Dennis Williams.

According to the Detroit News, Jones has been implicated in the probe that so far has resulted in 12 charges and 10 guilty pleas among UAW leaders and some low-level auto-company executives. He hasn’t been charged with any wrongdoing. But Jones’ weekend request to the union for a leave of absence came two days after prosecutors accused a former top aide to Jones and six other UAW officials of embezzling $1.5 million in union funds and filing false expense reports to conceal the wrongdoing.

The admitted and alleged wrongdoing uncovered by the investigation is ugly stuff involving not only embezzlement but also gross abuse of expense accounts—which ultimately stem from UAW member dues—by union officials renting villas in California, scoring rounds of golf at prominent West Coast courses, and buying some very expensive liquor.

The News also reported that “UAW Official A,” which is the moniker for Jones in the investigation, was in possession of more than $32,000 in cash at his personal residence on August 28. That’s the day Jones’ home was raided, along with those of other UAW officials, and when media reports quoted witnesses as saying that investigators were counting cash, according to the newspaper.

With all of this going on in the background, it’s not a stretch to believe—as many have posited—that Jones helped lead the union’s strike against GM as a sort of Wag the Dog gambit to distract attention from the probe and to seem like a tough-guy leader to unionists who were demanding more gains from the automaker than it initially wanted to give.

Still, Jones lost two key things at the table. First, GM CEO Mary Barra publicly disclosed the basic outlines of the automaker’s last offer to the UAW before the strike, and now union members can see that the walkout led by Jones didn’t gain them substantially more than the company was prepared to offer two months ago.

Second, Barra actually won her key “demand” even after the strike and $3 billion in lost profits: to maintain the labor flexibility the company needs for the future, including no reversals of its closure of three big assembly plants.

Even more important, the union leadership discreditation and paralysis comes at a time when UAW membership overall continues to dwindle and the future of blue-collar work in America’s auto plants is under intensifying assault from the growing capabilities of industrial automation and from the lower labor requirements for the all-electric vehicles that are becoming commonplace in the market.

What’s more, with leadership that they can’t trust, there’s the prospect that more rank-and-file members of the UAW may begin to opt out of the union under provisions of the right-to-work laws that have been put on the books over the last several years in significant membership states including Michigan and Indiana.

Jones may have helped lead an epic UAW strike against GM that squeezed more gains for expectant union members out of a company that has enjoyed a decade of strong profits after the Great Recession and U.S.-government bailout. But he may not be around to enjoy the afterglow.

Dale Buss: Dale Buss is a long-time contributor to Chief Executive, Forbes, The Wall Street Journal and other business publications. He lives in Michigan.