UAW Post-Strike Investment Oversight Cost Union $80M

According to a report from Reuters, the leadership of the United Auto Workers (UAW) labor union is embroiled in a controversy involving lost value in potential stock gains. The union missed out on a bull run that would have increased the value of its investments by a factor of $80 million due to a failure to follow its own policies on asset allocation.

The UAW, which represents some 150,000 workers for the Detroit Three automakers, liquidated some stock investments in 2023 to pay striking workers. By failing to reinvest in accordance with its investment policies, the union missed out on what would have been worth $80 million in gains.

The policy in question calls for keeping approximately 30 percent of its invested money in stocks, 53 percent in fixed income assets like bonds, and 17 percent in alternative investments. The amount liquidated in 2023 was about $340 million in stock investments. The vote to sell the stock included wording that the same amount would be reinvested after the strike ended, but didn’t specify a timeline. According to records obtained by Reuters, almost none of the union’s portfolio was invested in stocks in the year following the strike that started in September of 2023.

So, how did this costly mistake happen? According to Reuters, that question is being investigated by the federal monitor appointed to the UAW as part of a 2020 settlement between the union and the U.S. Justice Department to resolve a corruption scandal. “We welcome the monitor’s review regarding investments, because we believe that any accusations against [UAW Secretary-Treasurer] Margaret Mock are unfounded,” Mock’s attorney, Michael Nicholson, told Reuters.

After contracts were ratified between the UAW and the automakers following the 2023 strike, union funds were invested in cash, fixed-income, and alternative assets all the way through September of 2024. At that time, only five percent of the UAW’s investments were in stocks. Sources familiar with the matter said that 30 percent of that money was supposed to be invested in a fund that tracks the Russell 3000 index, which grew in value by approximately 33 percent from November 2023, when the contracts were ratified, to January 2025, when UAW officials raised concerns about the botched investing practices.