Kalea Hall and Nora Eckert
6 min read
By Kalea Hall and Nora Eckert
DETROIT (Reuters) -The United Auto Workers’ leadership is mired in turmoil over allegations of an investment blunder that officials say cost the union about $80 million in potential gains from its financial portfolio, according to seven UAW officials and employees and union documents reviewed by Reuters.
The investment funds were liquidated to pay striking workers in 2023 but weren't reinvested in accordance with the union's investment policy for more than a year, according to the documents and the UAW officials and staffers who spoke on condition of anonymity.
The details of the investment dispute at the union, including the estimate of foregone gains, have not previously been reported. The loss is an estimate of what the union would have earned had the money been invested in the stock market and other assets in accordance with the union's policy during that time.
The UAW represents nearly 400,000 members, including 150,000 workers at the Detroit Three automakers: General Motors (GM), Ford (F), and Jeep-maker Stellantis (STLA).
UAW investment policy calls for keeping about 30% of its money in stocks, 53% fixed income and 17% alternative investments, according to three union sources and the documents.
The board voted to liquidate about $340 million in stock investments in August 2023 to pay strike costs, according to a union document reviewed by Reuters. The wording of the vote stipulated that the money be reinvested according to union policy after the strike ended and the labor contracts were ratified, though it didn't specify how quickly.
But almost none of its portfolio was invested in stocks during the year after the strike began in September 2023, according to the records reviewed by Reuters. The news agency was unable to establish why the stock investment wasn't made.
The issue of why the union did not reinvest the funds for more than a year is now being investigated by the federal monitor which was appointed as part of a 2020 settlement between the UAW and the U.S. Department of Justice to resolve a union corruption scandal, according to a statement from a majority of UAW board members.
UAW President Shawn Fain and Secretary-Treasurer Margaret Mock did not respond to requests for comment on the failure to invest union dues.
Mock’s attorney, Michael Nicholson, declined to comment on why the union's money wasn't promptly reinvested in stocks or Mock's role, but told Reuters that responsibility for UAW's investments is shared by the union president, secretary-treasurer and its three vice presidents, citing a 1996 UAW resolution.
