21 September 2019
Jeffery Pietrzyk (picture) is the 11th person to be charged with conspiracy to commit wire fraud and money laundering. He retired from the union in 2014. He is also accused of receiving millions of dollars in bribes and kickbacks from vendors that made hats, shirts and other merchandise for the union.
Michael Grimes, one of his alleged co-conspirators, pleaded guilty to receiving at least $1.5 million in kickbacks from union vendors. UAW Region 5 Director Vance Pearson was charged with embezzling union funds.
The Detroit News reported that homes of UAW President Gary Jones, former UAW President Dennis Williams and UAW Region 5 Director Vance Pearson were raided by FBI, IRS and Department of Labour agents three weeks ago.
The UAW said Friday that the charges against Pietrzyk “are serious, and the conduct outlined in his charges is not just illegal, it is an affront to every member of the UAW.” The union also outlined changes to its processes to “prevent this type of criminal activity from happening again.”
The criminal probe comes along at a time when the union negotiates a new labour contract with GM. Roughly 48,000 UAW members at GM went on strike Monday.
GM on Friday said it “is disappointed by the conduct of the UAW officials charged in the government’s expanding investigation.” The company said it continues to cooperate with the government on the investigation.
Former Ford CEO Mark Fields on Thursday said the widening corruption probe will make it difficult for union leaders to negotiate any new deals with the Detroit automakers.
Moody’s Investors Service and Lending Tree warned that the ongoing UAW union strike against General Motors could be a threat to Michigan’s economy and could push the state into recession. According to Moody’s, Michigan’s economy relies heavily on the automotive industry. GM plants in Michigan account for about one-third of the company’s U.S. factory headcount.
Moody’s said that the industry massively downsized from 2007 through 2009 which resulted in a 44% drop in transportation equipment manufacturing employment in the state. CNBC reported.
