General Motors Sues Fiat Chrysler Over Bribes To Auto Union

The GM logo is seen at the General Motors Warren Transmission Operations Plant in Warren Michigan

General Motors Sues Fiat Chrysler Over Bribes To Auto Union

General Motors on Wednesday filed a racketeering lawsuit against Fiat Chrysler Automobiles NV, alleging that its rival engaged in bribery over many years to corrupt the bargaining process with the United Auto Workers (UAW) union and gain wage and work practices advantages over GM.

The suit targets Fiat Chrysler and three former company officials who plead guilty and were sentenced to prison for their roles in the scandal, including Alphons Iacobelli, who had served as vice president and lead UAW negotiator.

"This lawsuit is meant to hold FCA accountable for the harm its actions have caused our company and to ensure a level playing field going forward", GM Executive Vice President and General Counsel Craig Glidden said in a release.

"Many of the advantages FCA was able to obtain were denied to GM". While it's public knowledge the late CEO was adamant about merging with another automaker, and that Marchionne approached GM about merging, GM accuses FCA and the UAW of conspiring to "force" such a merger.

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Amid a deep-reaching federal corruption probe into the United Auto Workers union that has produced 10 convictions and charged 13 individuals, General Motors has raised the stakes higher. Following Fiat's total takeover of Chrysler in 2014, which gave us FCA, the lawsuit explains Marchionne turned to Williams, a longtime friend and a "merger 'wingman.'" Williams allegedly agreed to help Marchionne and FCA as the union's finances were out of control.

Fiat got an upper hand in the negotiation, administration and implementation of labor pacts by paying millions of dollars in bribes to UAW officials going back to 2009, GM alleges.

"It (the lawsuit) can't help but complicate the already hard task of getting a UAW-FCA agreement in place", said Kristin Dziczek, vice president of industry, labor and economics at the Center for Automotive Research (CAR) in MI.

"We have alleged in the complaint that Mr. Marchionne is responsible for conceiving, executing and sponsoring the alleged wrongdoing", Glidden told the Free Press.

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Fiat Chrysler said it's "astonished" by the suit and speculated that GM may be trying to undercut a planned merger with France's PSA Group and active negotiations with the UAW over a new labor contract. FCA, in turn, supplied funds, the lawsuit says.

Authorities have said that payments were made through a training center jointly run by the company and the UAW.

Competitive advantages provided to Fiat Chrysler but denied to GM included a higher portion of lower-paid workers, a streamlined grievance process and looser limits on use of temporary employees, according to GM. "That was part of the conspiracy", Glidden said.

Glidden said GM is not suing the UAW because it believes that responsibility rests with FCA, which was the "orchestrator" of the conspiracy.

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The lawsuit says that under the Racketeer Influenced and Corrupt Organizations Act (RICO), FCA would be liable to pay GM three times the actual damages caused, plus interest, punitive damages and attorneys' fees.

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