United Auto Workers members on strike picket outside General Motors’ Detroit-Hamtramck Assembly plant on Sept. 25, 2019 in Detroit.
Michael Wayland / CNBC
DETROIT – As the United Auto Workers prepares for what are expected to be highly contentious negotiations with the Detroit automakers later this year, the union’s leadership is undergoing its largest upheaval in decades.
The shuffle follows a years-long federal investigation that uncovered systemic corruption involving bribery, embezzlement and other crimes among the top ranks of the organized labor group.
Thirteen UAW officials were convicted as part of the investigation, including two past presidents. As part of a settlement with the union in late-2020, a federal monitor was appointed to oversee the union and a direct election process was voted upon that is reshaping its International Executive Board.
A reform group called UAW Members United has successfully campaigned to elect five new representatives to the 14-member board, but not all seats are settled. Run-off elections are taking place through Tuesday for three other positions, including the highest-ranking position of president.
The results mean a divided board will lead negotiations, starting this summer, with General Motors, Ford Motor and Stellantis. The vote count for the runoff elections will begin Wednesday, overseen by an election vendor and the federal monitor as well as other officials.
“The newly elected members were elected on trying to make change,” said Art Wheaton, a labor expert with the Worker Institute at Cornell University. “They were not elected to get along and play nice together. They were elected primarily because they were going to shake things up.”
Wheaton said new faces in the bargaining room creates a “different dynamic” and could hurt stability of the process, but doesn’t change the underlying concerns.
“It certainly creates additional stress or additional problems, but I think the problems are going to be there, no matter who’s at the table.”
For investors, UAW negotiations are typically a short-term headwind every four years that result in higher costs. But this year’s negotiations are expected to be among the most contentious and important in recent memory, against the backdrop of a years-long organized labor movement across the country, a pro-union president and an industry in transition to all-electric vehicles.
Don’t forget ongoing economic pressures such as inflation and recessionary fears in the years, if not months, ahead. Canadian union Unifor will also be simultaneously negotiating this year with the Detroit automakers, adding even more complexity and competition for investments and jobs.
“There’s a ton of moving parts. It’s getting to be one of the most consequential negotiations since the bankruptcies in 2009,” said Kristin Dziczek, a Detroit-based automotive policy advisor for the Federal Reserve Bank of Chicago.
General Motors. The automaker said the strike cost it about $3.8 billion to $4 billion for 2019.
incumbent Ray Curry and Shawn Fain, a UAW Members United candidate and local leader for a Stellantis parts plant in Indiana.
Curry during the election process has tried to distance himself from the former corrupt UAW leaders.
In the general election, Curry received about 600 more votes than Fain. Only 11% of issued ballots, or 106,790, were cast. However, dissident votes were spread across five candidates, some of which have put their weight behind Fain.
Nearly 140,000 ballots had been received through Friday for the runoff elections, according to the federal monitor.