GM strike, Day 2: Nearly 50,000 workers off the job in 19 states

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6:23 a.m. ET, September 16, 2019

A union scandal makes negotiations harder

United Auto Workers President Gary Jones speaking at the opening of GM-UAW contract talks on July 16 in Detroit.
United Auto Workers President Gary Jones speaking at the opening of GM-UAW contract talks on July 16 in Detroit.

The deadlock comes at an awkward time for the United Auto Workers union, one of the most powerful labor groups in the country.

UAW President Gary Jones was directly implicated late Thursday in a growing scandal involving the union and its finances, the Detroit News reported.

It could further damage the necessary trust that rank and file union members have in the union's leadership during negotiations.

The scandal involves misappropriation of union funds, and in some cases, union officials accepting bribes from officials at one of the automakers, Fiat Chrysler.

Agents from the FBI, IRS and Labor Department had searched Jones' home late last month, an FBI spokesman confirmed to CNN.

On Thursday a top union official, Vance Pearson, became the first active union official to be indicted in the scandal.

Nine other people who have pleaded guilty in the scandal were former union officials, the widow of one union official, or employees at Fiat Chrysler who dealt with the union.

The indictment did not name Jones, but the Detroit News reported that he's one of the unidentified co-conspirators named in the government's filing, identified only as "UAW Official A." The News cited three unnamed sources for its report.

The allegation against the UAW president, even if only in a news report, could be bad news for GM in its hope of reaching a deal with the union at a difficult time for the industry, said Kristin Dziczek, vice president of industry labor and economics for the Center for Automotive Research, a Michigan think tank.