Readers of this blog know that I’m not a fan of GM CEO Mary Barra, but I confess to having a grudging admiration for her deft ability to enrich herself and expose UAW president Shawn Fain’s clownish ways. While Fain last fall preened on social media in his “Eat The Rich” t-shirt, Barra continues to feast at the expense of the hourly workers he represents.

When Fain staged the UAW’s “stand up strikes” last fall demanding “audacious and ambitious”  raises for the U.S. factory workers employed by GM, Ford, and Stellantis, Barra channeled her inner Brer Rabbit and feigned that the union’s pay demands would put GM at a competitive disadvantage.  

“It is clear Shawn Fain wants to make history for himself, but it can’t be to the detriment of our represented team members and the industry,” Barra warned in a statement.

Fain got what the media portrayed as a “historic” contract. As soon as it was signed, Barra told Wall Street that GM could easily absorb the higher wages. In a giant diss to the UAW, Barra also announced a $10 billion stock buyback and raised GM’s dividend payout to shareholders. The stock buyback was more costly than the wage increases GM agreed to pay its workers.

Barra this week again flipped Fain the bird, announcing an additional $6 billion stock buyback.

Stock buybacks boost the value of a company’s shares because it reduces the number outstanding, thereby increasing the per share value. The once illegal practice has soared in recent years and is responsible for widening the pay gap between CEOs and their workers because a big component of CEO compensation is awarded in stock options.

Here’s a link to a Harvard Business Review article authored by three university professors warning about the deleterious impact of stock buybacks.

“Stock buybacks made as open market repurchases make no contribution to the productive capabilities of the firm,” the professors said. “Indeed, these distributions to shareholders, which generally come on top of dividends, disrupt the growth dynamic that links the productivity and pay of the labor force. The results are increased income inequity, employment instability, and anemic productivity.”

Stock buybacks contributed mightily to Boeing’s decline, as it diverted billions of dollars from critical research and development, allowing Europe’s Airbus to gain a competitive edge. Union leaders should be at the forefront of those protesting stock buybacks, particularly the UAW’s leadership given the vagaries of the U.S. auto industry.

Among those who have been resoundingly critical about stock buybacks is President Biden, who in his State of the Union address earlier this year proposed quadrupling the excise tax on share repurchases. Barra is reportedly close buds with Biden, so her share repurchases were a diss to the president as well.

Biden and Fain have a mutual admiration, with the president writing a fawning tribute of the union leader for Time and Fain endorsing Biden’s reelection bid.

President Biden’s Fain tribute in Time

Although Fain garners good press in the media, with Time declaring him among the 100 most influential persons in America, he isn’t so admired among rank-and-file UAW workers, particularly those who lost their jobs because of Fain’s historic contract.

 Fain’s contract provided that temporary workers be made permanent and paid higher wages. Stellantis instead chose to fire more than 4,000 of its temporary workers, some of whom were single mothers who depended on their jobs to feed their families. Underscoring the low regard Stellantis has for the UAW, the company used automated calls to notify fired UAW workers at the Jeep Toledo plant of their lost employment.

Getting snookered by Barra and the CEOs of Stellantis and Ford isn’t Fain’s only embarrassment. He was elected directly by the UAW’s full rank-and-file on the promise he would restore transparency and integrity to the union’s leadership in wake of the convictions of several union officials, including past presidents, on corruption charges.

The UAW is under the supervision of a court-appointed monitor because of its previous rampant corruption. Although Fain’s been in office for just over a year, storm clouds have already appeared over the union’s renovated Solidarity House headquarters in Detroit.

The monitor, Neil Barofsky, disclosed this week he is investigating disputes involving Fain and two UAW officials who say they were improperly stripped of their duties. Barofsky, an attorney with Jenner & Block, has accused the UAW of a “lapse in co-operation” with his investigation, alleging that the union has only provided a fraction of the documents he’s been seeking for months.

As reported by the New York Times, one matter Barofsky is investigating is a dispute involving the union’s secretary-treasurer, Margaret Mock, the union’s second-ranking official. In February, the union’s international executive board voted to support Mr. Fain’s move to strip Mock of duties not mandated under the union constitution, on allegations that she “had engaged in misconduct while carrying out her financial oversight responsibilities.”

Mock has denied any wrongdoing and asserted that she was retaliated against “for her refusal or reluctance to authorize certain expenditures” for the president’s office.

Mock’s UAW bio says she joined the union in 1994 and was directly elected by its members to her current position in 2022. The New York Times reported last October that Mock had expressed concern to fellow board members about the cost of the UAW’s stand up strike on the union’s budget. The Times said she offered a proposal to scale back spending on union organization activities during the walkouts.

The UAW’s LM-2 form, an annual financial filing with the U.S. Labor Department, makes clear what Mock was concerned about. As reported by the Detroit Free Press, the UAW in 2023 disbursed $152 million in strike benefits, compared with $46 million a year earlier. Yet the union continued to spend $118 million on “representational” activities, which presumably means organizing other workers.

The UAW desperately needs new members, as its membership has been steadily declining. According to its LM-2 form, UAW membership last year declined to 370,239 workers from 383,003 in 2022.

Mock was possibly concerned about other UAW expenditures last year, including $8 million in improvements at Solidarity House and almost $1 million in improvements at the union’s Black Lake conference facilities and golf course in northern Michigan. Fain apparently enjoys the conference facilities, as he made personal use of them, which involved a $2,835 deduction.

Barofsky also disclosed that he was investigating allegations by a vice president who last month was stripped of oversight of the union’s Stellantis department. According to Barofsky’s report, the UAW said the action had been taken against the vice president, Rich Boyer, because of “dereliction of duty.”

Boyer claimed that he had been a victim of retaliation for “refusing to engage in acts of financial misconduct to benefit others.”

Barofsky said the union had made officials and members available to be interviewed by investigators, but “effectively slow-rolled the monitor’s access to requested documents,” numbering about 116,000. About 2,600 documents have been handed over, mostly in the last few days.

It appears that Barofsky continues to uncover more UAW wrongdoing. The Detroit Free Press reported that the monitor has referred two findings of post-consent decree misconduct investigations to the Justice Department, while five other investigations remain open.

Fain told the Free Press that “taking our union in a new direction means sometimes you have to rock the boat, and that upsets some people who want to keep the status quo, but our membership expects better and deserves better than the old business as usual. We encourage the monitor to investigate whatever claims are brought to their office, because we know what they’ll find: a UAW leadership committed to serving the membership, and running a democratic union. We’re staying focused on winning record contracts, growing our union, and fighting for economic and social justice on and off the job.”

While Fain’s statement has a nice ring to it, it didn’t address why the UAW failed to turn over critical documents that presumably validate his claims.

The UAW was recently successful organizing workers at a VW plant in Tennessee, but workers at the Mercedes plant in Alabama recently voted to reject joining the union.

Nissan employees at the company’s parts distribution facility in Somerset, New Jersey, in April overwhelmingly voted to oust the union after four years of representation.

“UAW union officials were far more concerned with hoarding power in the workplace than communicating with or listening to workers,” Michael Oliver, the Nissan employee who on April 1 filed the petition for the decertification election, said in a statement provided to the Detroit News by the National Right to Work Legal Defense Foundation. “They kept us completely in the dark about contract negotiations, and treated anyone in the workplace who opposed their agenda or questioned their leadership with a huge amount of arrogance, contempt, and even intimidation.”

Oliver’s comment seemingly gives some credence to the allegations of Margaret Mock, the UAW treasurer who maintains she was relieved of some of her duties for refusing to authorize certain expenditures.

Little wonder why the UAW’s membership is shrinking. It’s a wonder that any worker would choose to join the union with Fain at the helm.

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