In a move unprecedented in the US auto industry, General Motors is suing Fiat Chrysler, charging a racketeering conspiracy to corrupt the labor contract bargaining with the UAW. GM alleges it suffered massive monetary damage.
GM says in the federal court lawsuit that Fiat Chrysler, led by the late CEO Sergio Marchionne, corrupted contract bargaining with the UAW with a pattern of bribes and other wrongdoing going back to 2009, and impacted the contracts in 2011 and 2015.
GM says it lost untold billions due to the bribes by FCA officials to some UAW officers, which would have given FCA a major advantage in labor agreements. The lawsuit paints Marchionne as a central figure in the scheme, while Marchionne was trying to force a merger between FCA and GM. GM alleges that Fiat Chrysler CEO Sergio Marchionne authorized more than a million dollars in bribes to leverage his attempt to get GM to take over FCA.
A company statement says GM is seeking a level playing field in the industry.
GM says any damages recovered would be invested in the U-S to benefit GM workers.
See GM’s written statement:
General Motors Co. today announced the filing of a federal racketeering lawsuit against FCA and former FCA executives who have pled guilty in an ongoing federal corruption probe. The lawsuit exposes a multi-year pattern of corruption that FCA used to undermine the integrity of the collective bargaining process and cause GM substantial damages.
At the core of this lawsuit are clear admissions of wrongdoing made by former FCA executives revealed through the continuing criminal investigation by the U.S. Attorney’s Office in the Eastern District of Michigan.
“This lawsuit is intended to hold FCA accountable for the harm its actions have caused our company and to ensure a level playing field going forward,” said Craig Glidden, GM Executive Vice President and General Counsel.
FCA was the clear sponsor of pervasive wrongdoing, paying millions of dollars in bribes to obtain benefits, concessions, and advantages in the negotiation, implementation, and administration of labor agreements over time.
FCA corrupted the implementation of the 2009 collective bargaining agreement. It also corrupted the negotiation, implementation, and administration of the 2011 and 2015 agreements.
FCA’s manipulation of the collective bargaining process resulted in unfair labor costs and operational advantages, causing harm to GM.
With this lawsuit, GM is seeking to reinforce that bargaining must be free from fraud and corruption. All damages recovered will be invested in the U.S. to benefit GM’s employees and grow jobs.