General Motors is suing Fiat Chrysler, alleging that its crosstown rival got an unfair business advantage by bribing officials of the United Auto Workers union.
The lawsuit, filed Wednesday in U.S. District Court in Detroit, alleges that FCA was involved in racketeering by paying millions in bribes to get concessions and gain advantages in three labor agreements with the union.
Details of the racketeering have been exposed in a federal probe of corruption at the union that has resulted in multiple arrests.
The lawsuit alleges that Fiat Chrysler corrupted the bargaining process with the UAW in the 2009, 2011 and 2015 union contracts to gain advantages over General Motors.
Craig Glidden, chief counsel for General Motors, alleges that Fiat Chrysler CEO Sergio Marchionne, who died last year, was a “central figure” in the company’s alleged racketeering, in which it paid millions in bribes to get concessions and gain advantages in three labor agreements with the United Auto Workers union. GM claims the conspiracy was designed to put it at a cost disadvantage to FCA.
“FCA’s manipulation of the collective bargaining process resulted in unfair labor costs and operational advantages for it, causing harm to GM,” Glidden said.
The lawsuit also names former FCA labor relations chief Alphons Iacobelli, and former FCA officials Jerome Durden and Michael Brown as defendants. All have pleaded guilty in a federal corruption probe, which has alleged that Fiat Chrysler bribed UAW officials to keep them “fat, dumb and happy.”
GM released this statement:
General Motors Co. (NYSE: GM) today announced the filing of a federal racketeering lawsuit against FCA (FCA US LLC and Fiat Chrysler Automobiles NV) 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.
