GM training center looks doomed

DETROIT — UAW leaders have agreed to close at least one of the training centers that the union formed with the Detroit 3 in the 1980s. It likely signals the end, or at least a major overhaul, of the other two jointly run centers as well, after funds intended to help workers instead ended up in the pockets of some officials at the union and the automakers.

General Motors' tentative agreement with the UAW calls for making arrangements by Nov. 30 to sell the palatial UAW-GM Center for Human Resources in Detroit. The 420,000-square-foot complex that sits along the Detroit River would no longer be involved in "any activities, training, other endeavors and any other functions of any kind," according to the proposed contract, which members must ratify.

Some joint training activities would continue, but GM would provide and control the funding.

An independent audit of the center's assets, spending and activities would be conducted. The nonprofit entity behind the center would be dissolved.

The sale of the building would be a boon for GM and the UAW, given its size and prime location.

GM will designate another property for joint training, the contract said. Leftover training center funds and profit from the building sale would be placed in two new trust funds to be used for joint activities.

Eliminating a source of potential abuse could also help to rebuild members' trust in union leadership.

"The dissolving of the building isn't the issue; it's the dissolving of the process," said Art Schwartz, a labor consultant and former GM negotiator.

Fiat Chrysler Automobiles and Ford Motor Co. may also restructure their joint training processes under their new contracts with the UAW. The FCA center, in particular, has been at the center of an ongoing, multiyear federal corruption probe. Former UAW Vice President Norwood Jewell, who admitted to using funds from the FCA center on travel, steak dinners and other luxuries, was sentenced in August to 15 months in prison.

The scandal enveloped the GM training center this year, when the Justice Department alleged that UAW officials on its board had collected kickbacks to steer lucrative contracts to certain vendors.

In one example given by prosecutors, the GM center spent nearly $4 million in 2013 to order 58,000 custom-made watches that were never handed out. The UAW officials behind the order pocketed almost $350,000 in kickbacks, prosecutors said.

One of the officials, Michael Grimes, pleaded guilty to wire fraud and money laundering in September.

Joe Ashton, a former UAW vice president who led the GM department from 2010 to 2014, has been implicated in the scandal as well. His time running the GM department matches prosecutors' descriptions of a senior official they say colluded with Grimes and took kickbacks.

Ashton's former assistant, Jeffery Pietrzyk, is scheduled to appear in court Tuesday, Oct. 22. He is expected to plead guilty to receiving $123,000 through a conspiracy with other officials to take bribes and kickbacks related to vendor contracts for watches, backpacks, jackets and other items.

Under the proposed contract, GM and the UAW must discontinue the joint purchase, sale or distribution of GM-UAW promotional products and novelty items.

Going forward, all expenses associated with UAW-GM joint activities would be paid by GM, under the contract. And GM would have exclusive responsibility for administering, implementing and managing all funds, payments, expenditures and programs related to joint activities.

UAW-represented employees who work at the training center would be reassigned to their local plants. Nonunion employees would be terminated with reasonable notice, according to the agreement.

GM also would have a deep view into all training activities. The automaker is to provide a web-based training administration system to develop and track training plans, the proposed contract says.

Members of a local joint activities committee must also keep UAW and GM leadership up to date on the status and process of joint activities.