General Motors Sues Fiat Chrysler, Alleging Bribery
U.S. automaker General Motors (GM) filed a lawsuit on 20 November against Fiat Chrysler Automobiles, alleging that corrupt bargaining practices hurt GM's business.
GM charged its rival with racketeering in a U.S.federal lawsuit, claimnig that Fiat was involved in corrupt labor relations, including bribery, with the United Auto Workers union, which led to Fiat securing a better labor deal with the union than GM.
According to Autonews, Fiat skewed labor negotiations between GM and the union, allegedly corrupting aspects of their 2009, 2011, and 2015 agreements.
While General Motors has a record of success with RICO law, legal experts say the company will have a hard time proving injury caused by Fiat Chrysler. https://t.co/CiabICyVA3— USA TODAY Money (@USATODAYmoney) November 21, 2019
The union is the target of a U.S. federal probe looking into alleged bribery and misused union funds. Union officials, including a former vice president, pleaded guilty as a result of the probe and received prison time. Former union president Gary Jones resigned from his position on 20 November while the union’s board simultaneously voted to remove him. He is also facing U.S. federal bribery charges.
A former Fiat vice president, Alphons Iacobelli, and two other former executives for the company previously pled guilty to bribing union officials. They are serving a sentence in U.S. federal prison. GM’s lawsuit alleges that the corruption extended further up the food chain and was approved by late Fiat CEO Sergio Marchionne.
According to CNN, GM estimates that this resulted in GM losing billions of dollars by creating an unfair collective bargaining process, although a precise cost of the damages is unknown.
GM’s surprise lawsuit against Fiat Chrysler could interfere with the Italian automaker's plan to merge with Peugeot owner PSA Group https://t.co/e3erhb86Qn— Bloomberg (@business) November 21, 2019
Fiat claims the charges are without merit and were conveniently filed while the automaker is working to both finalize a potential merger with French automaker PSA Group and contract negotiations with the union.
Bloomberg put together an annotated timeline of the alleged actions, investigation, and charges involving the two automakers and the union.