Supplier Allegedly Paid $900K in Kickbacks for UAW Contracts

Published: Aug. 21, 2019, 4 p.m.

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As the Big 3 continue discussions with the United Autoworkers Union on terms for an upcoming contract, there\\u2019s a lot of distracting noise in the background \\u2013 and it\\u2019s the roar of a raging scandal that just continues to grow.

The issue is an investigation by federal agencies alleging rampant fraud taking place by UAW officials who demanded kickbacks from automakers, as well as vendors supplying products and services to the union.

After a handful of indictments of union officials and, also, implicated parties within Fiat Chrysler, we learned last week that a union administrator named Michael Grimes was party to GM\\u2019s unit of the UAW, meaning FCA won\\u2019t be the only of the Big 3 to get dragged into this whole ordeal.

But it\\u2019s the specifics of this particular scheme with Grimes that are equal parts astonishing and infuriating \\u2013 especially so for GM\\u2019s union workers. You see, Grimes \\u2013 while representing a training center run jointly by the UAW and GM \\u2013 is being accused of recommending a contractor to fulfill an order for 58,000 UAW watches, to be given out to GM\\u2019s employees. Through this, Grimes reportedly muscled a $250,000 kickback from the contractor, while promising to recommend the vendor again for future orders\\u2026 which he did.

Down the road, a $6 million order for custom \\u201cTeam UAW-GM\\u201d jackets, along with another for 55,000 backpacks, pumped more cash into his personal coffers \\u2013 to the tune of about $900,000 over the life of the scheme with this vendor.

But the worst part here is that, besides the egregious kickbacks, Automotive News is reporting that the watches were never even distributed, and that \\u201cthe $4 million order remains packed away in a warehouse near the Detroit River.\\u201d

But maybe the GM workers didn\\u2019t want them. Why? Auto News says that the watch maker was actually a chiropractor, who just jumped into the watch business, reportedly to recoup a bad loan he had made to a friend of one of the union officials.

Overall, Grimes is accused of accruing nearly $2 million in \\u201cillicit benefits\\u201d over the course of a decade.

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