UAW elects new leader to face contract talks, federal probe

By Nick Carey

DETROIT (Reuters) - The union that represents factory workers at the Detroit Three automakers elected regional director Gary Jones as its new president on Wednesday, ahead of tough 2019 contract talks likely to coincide with declining U.S. sales of new vehicles.

United Auto Workers officials gathered in a balloon-filled convention hall in Detroit elected Jones, head of the union's Region 5 covering 17 western and southwestern states, to a four-year term as UAW president.

Jones, a certified public accountant, will have to lead the once powerful union through an expanding U.S. Justice Department investigation into alleged misspending at UAW union training centers, as well as contract negotiations next year with General Motors Co , Ford Motor Co and Fiat Chrysler Automobiles NV .

The UAW represents around 140,000 workers at the Detroit automakers.

In March, in a major embarrassment for the union, a former official on the UAW committee that negotiated a 2015 labor agreement with FCA was charged with accepting illegal payments from a senior executive of the automaker.

Federal prosecutors also alleged in a May 25 court document that top FCA and UAW officials conspired to violate U.S. labor laws, saying a former FCA executive knew bribes paid to union leaders were designed to "grease the skids" in labor negotiations.

Jones, 60, joined the UAW in 1975 when he was hired at a Ford Motor Co plant in Broken Arrow, Oklahoma. He has worked for the union in various roles since 1990.

UAW membership has crept up since the end of the 2007-2009 recession, but is about half of what it was in 1998 and well below a peak of 1.5 million members in 1979.

The UAW said in March that its membership rose 35 percent in 2017, but union dues payments slipped 4 percent from 2016.

The Detroit automakers and their suppliers have slashed workforces at UAW-represented factories over the past 30 years as they have automated and lost sales to European and Asian rivals.

Outgoing UAW President Dennis Williams has expressed support for U.S. President Donald Trump's moves to restrict imports of vehicles from Mexico and other low wage countries.

The UAW's effort to win higher wages and stronger job guarantees in a new contract next year could run into rising costs and falling sales for the Detroit automakers. After a boom running from 2010 to record annual sales of 17.55 million units in 2016, new vehicle sales fell 2 percent in 2017, with further decreases expected this year and in 2019.

The union has also struggled to organize workers at major foreign automakers. It is currently trying to organize workers at Tesla Inc in Fremont, California, and has joined an unfair labor practices complaint against the luxury electric car maker.

(Reporting by Nick Carey; Editing by Tom Brown)

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