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UAW President Gary Jones resigns after GM sues rival for bribe union

DETROIT – United Automobile Workers President Gary Jones abruptly resigned Wednesday, limiting a tumultuous day when union leaders were forced to remove him and General Motors blamed Fiat Chrysler rival for bribery of union employees to receive more favorable UAW contract terms.

Jones has notified the union that he will retire, said his lawyer, Bruce Mfeo, of New York.

The news of Jones's resignation came shortly after the UAW International Executive Board filed expulsion documents with he and regional director Vance Pearson of the union on charges brought by a federal investigation into union corruption that led to multiple arrests beginning in 201

7 The move to remove the two leaders would lead to allied processes for the two.

Pearson faces criminal charges until Jones is arraigned, but federal agents raided his Detroit suburban home in August.

In an email, Mfeo stated that Jones had decided to step d on his own before learning about the move to remove him.

Jones, who has been a UAW member for 44 years and starts as a factory worker, stepped down to allow the union to focus on its core mission to improve the lives of members and their families, Maffeo said.

The status of Pearson in the union was not clear on Wednesday.

Jones' departure came just hours after General Motors

GM, -3.02%

filed a racketeering case against Fiat Chrysler

FCAU, -3,72%

claiming that its rival in the semicircle received an unfair business advantage by bribing UAW employees.

An unprecedented lawsuit filed Wednesday in U.S. District Court in Detroit alleges that the FCA was racketeering, paying millions of bribes to obtain concessions and gain benefits in three labor agreements with the union.

The lawsuit alleges Fiat Chrysler damaged the UAW negotiation process in 2009, 2011 and 2015 to gain benefits of rebates "from the union, said GM Counselor General Craig Gliden. "The FCA's manipulation of the collective bargaining process has led to unfair labor costs and operational benefits for it, causing harm to GM."

In a statement, Fiat Chrysler called the lawsuit "pointless" and said it would vigorously defend itself. He also accused GM of trying to suspend its proposed merger with French carmaker PSA Peugeot, as well as ongoing negotiations for a contract with UAW.

"We are amazed at this submission, both its content and its timing," said Fiat Chrysler. "We intend to vigorously defend ourselves against this senseless lawsuit and prosecute all legal remedies."

In its complaint, GM accused Fiat Chrysler CEO Sergio Marchione, who died last year, of allowing bribery of value. more than $ 1.5 million to union employees in a scheme to impose unexpected labor costs on GM. The higher costs were designed to force GM to merge with the FCA, which rejected Marchionne's bid to combine the companies, the case said.

Eric Gordon, a professor of business and law at the University of Michigan at Michigan, said one company is suing another for bribing union employees without precedent. While GM's allegations are plausible, given what federal prosecutors have already revealed, it will carry the burden of convincing the jury that the scheme actually happened, Gordon said.

In addition to Fiat Chrysler, GM's case names former FCA chief of employment Alfonso Jacobelli and former FCA employees Jerome Durden and Michael Brown as defendants. Everyone pleaded guilty to a federal corruption trial that alleges Fiat Chrysler bribes UAW employees to keep them "fat, dumb and happy."

Authorities say the payments were made through a co-managed training center from the company and UAW. Durden handled the finances of the training center, and Brown helped him run the center.

After leaving Fiat Chrysler, Jacobelli went to GM's employment department in 2016. He was suspended after being charged and fired in December 2017.

made a separate statement, UAW stated that there were numerous safeguards. to ensure the integrity of its contracts negotiated with Fiat Chrysler, including reviews by local and international Union officials.

"We are confident that the terms of these contracts were not affected by the misconduct of Iacobelli or that of any UAW employee involved in misuse of FCA joint program funds," the statement said. [19659002] UAW says it is committed to making whatever changes are needed to ensure that the breach never happens again.

Glidden told reporters that under three UAW contracts, the FCA was able to reduce his labor costs because the union allowed him to hire more temporary and lower paid wages [19659002] In 2007, the union agreed that new hires would be paid less than long-time workers, creating a "second tier" of employees who were paid less. FCA has more workers than second

The Automotive Research Center, an industry think tank, estimated earlier this year that Fiat Chrysler's total labor costs, including salaries and benefits, were about $ 55 an hour, giving him $ 8 an hour over GM and $ 6 an advantage over Ford.

Glidden stated that GM did not judge the UAW as it believed that it was the responsibility of the FCA, which was the conspiracy orchestra.

He said that GM was seeking substantial damages in the case but could not give a specific amount. The case says GM does not seek to reduce the salaries or benefits of all UAW workers.

Last week, a retired union vice president and former GM board member became the 13th person to be charged in a federal union and car test. who made watches for union members. The 58,000 watches purchased through the GM-UAW Joint Learning Center are still stored five years later.

Last month, the union settled with GM after a 40-day strike, and Ford workers reached an agreement shortly thereafter. Intense negotiations with Fiat Chrysler began on Monday, with the possibility of another strike due in part to the distrust of union members with the UAW leadership.

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