GM's bombshell lawsuit against FCA alleges years of corruption and includes claims about a failed 2015 merger
- General Motors filed a lawsuit against Fiat Chrysler Automobiles on Wednesday, alleging that "million of dollars in bribes" were paid to the United Auto Workers union.
- GM alleged that this racketeering scheme corrupted UAW labor agreements in 2009, 2011, and 2015.
- GM also alleged that the late FCA CEO Sergio Marchionne was a central figure in the bribery scheme.
- GM said the scheme was an attempt to influence a failed merger with GM in 2015.
- Sign up for Business Insider's transportation newsletter, Shifting Gears, to get more stories like this in your inbox.
- Visit Business Insider's homepage for more stories.
LOS ANGELES - General Motors filed a bombshell lawsuit against Fiat Chrysler Automobiles in US district court in Detroit on Wednesday.In the lawsuit, GM alleged that "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," the company said in a statement.Advertisement
The company added: "FCA corrupted the implementation of the 2009 collective bargaining agreement. It also corrupted the negotiation, implementation, and administration of the 2011 and 2015 agreements."
The federal racketeering lawsuit goes to the top of FCA leadership from 2009-15. Specifically, Craig Glidden, GM Executive Vice President and General Counsel, said on a conference call with reporters after the lawsuit was announced that late FCA CEO Sergio Marchionne was "central to a bribery conspiracy" that involved the United Auto Workers and former FCA executives who have pled guilty in a federal criminal investigation.In a statement, FCA said, "We are astonished by this filing, both its content and its timing."
"We can only assume this was intended to disrupt our proposed merger with PSA as well as our ongoing negotiations with the UAW. We intend to vigorously defend against this meritless lawsuit and pursue all legal remedies in response to it."
Alleged corruption of collective bargaining an an attempt to influence a GM-FCA merger
Glidden said that FCA's current CEO, Mike Manley, was not named in the lawsuit.
But he also said that the "conspiracy was hatched in 2009 and continued for a substantial time" and that Marchionne was a central figure.GM is seeking damages that could rise into the billions, as it said FCA alleged corruption of the collective bargaining process "left it paying higher wages than FCA, and allowed FCA to use more temporary workers and lower-paid second-tier workers than GM," Reuters reported.Advertisement
"Something's wrong when a foreign company can come to US and say it will abide by law, but then systematically violate those laws," Glidden said.
No attempt to affect FCA-PSA merger
But he added that GM is alleging that FCA's actions were an attempt to influence a failed 2015 merger with GM, infamously lobbied for my Marchionne but rejected by GM CEO Mary Barra and GM's board.
"The scheme was integrated with attempt to force a merger," Glidden said. "At that time. we also know Mr. Marchionne [was] aware of criminal conduct.""We believe that the conduct at issue is stunning," he said.Advertisement
- Zomato announces 10 days of menstrual leave for all women employees – including transgender people
- Mukesh Ambani is now the world’s fourth-richest person after he beat Louis Vuitton owner Bernard Arnault
- If you have a high risk tolerance — here are a few ‘aggressive’ investment bets to consider
- Karnataka is building a cycling map for Bengaluru by crowdsourcing inputs from city's cyclists
- Indian Medical Association says nearly 200 doctors have lost their lives to COVID-19