UAW Fumbles Investments, May Have Flubbed $80 million

Most people have rued at least one missed investment opportunity in their lives, though likely none so large (both in terms of monetary value and people affected) as the UAW is suggested to have made after the 2023 strike action.

According to a report by Automotive News, the UAW failed to immediately reinvest the money it hauled out of stock portfolios and liquidated in order to pay workers who were on strike. It is being alleged that, for whatever reason, the union took at least twelve months to reinvest the funds. Those with pencils and calculators are estimating the union had forgone (forwent?) about $80 million in gains during the period of time in which almost none of its portfolio was invested in stocks. The time frame in question is a year or so following the strike which began in September 2023, according to the records reviewed by Reuters, which originally reported on the story.

There was seemingly nothing untoward about the idea to use the $340 million worth of portfolio money to pay striking workers, since it appears the board voted in August 2023 to approve a plan involving selling all of the equities in its strike fund, leaving some in cash and bonds and alternative investments. When workers hit the streets a month later, they were paid $500 a week.

The alleged problem centers around a failure to reinvest as per union policy once the strike was over and contracts ratified in November 2023. Those in the know say funds were instead placed in a mix of “cash, fixed-income, and alternative assets” until about September 2024 at which time the portfolio contained only about five percent in equities. It was around that time someone pointed out the portfolio was getting lower returns than one might expect in a standard bank account. Ouch.

Did someone forget to check a box on a website or simply fail to hit an ‘enter’ key? That’d be one expensive missed keystroke but not one unheard of. Your author suffered a similar error made by a hapless bank employee during the 2010 recession, thereby missing out on the market recovery. Difference is, my portfolio was five figures, not nine. And while it sucked, the the only one affected was me, not thousands of union employees.

For its part, the UAW is mum for now, with lawyers for the Secretary-Treasurer stating any accusations against their client are unfounded.

[Image: Ryanzo W. Perez/Shutterstock]

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