Fiat Chrysler Automobiles chairman John Elkann says the Italian-American automaker isn’t concerned about the racketeering lawsuit General Motors filed against it this week and said the company plans to fight the case in court.
“The GM lawsuit will be dealt with in appropriate places, but as we’ve said already it is absolutely groundless and so it does not worry us,” FCA Chairman John Elkann was quoted by Reuters as saying.
Elkann, who was speaking at a strategy briefing for Exor, the Agnelli family’s holding company and the largest stakeholder in FCA, also said the GM lawsuit is “meritless” and said it was unfortunate that it went after FCA CEO Sergio Marchionne, as he is not alive to defend himself against the claims. Marchionne died in 2018 due to complications from a shoulder surgery.
Elkann also confirmed the merger between FCA and Groupe PSA will go forward and that the GM lawsuit will have no impact on the memorandum of understanding between the two automakers, which will be signed before the end of the year. The automaker believes the suit may have been filed in an attempt to disrupt the $50-million merger with the French automotive giant.
In an internal memo sent to employees this week, FCA CEO Mike Manley said the lawsuit was without merit, claiming it “rehashes a collage of salacious public allegations” that first came to light amid the FCA training center probe earlier this year. In that case, a number of UAW officials were charged with using funds from the UAW/FCA training center for their personal gain. Manley also said that “at first review, beyond unsupportable speculation, [the GM suit] does not include any new factual allegations.”
The GM suit alleges top FCA executives bribed UAW officials in order to get a favorable labor contract in 2011 and 2015. It also accuses Marchionne of conspiring with the UAW to ensure GM got a poor labor deal with the union in order to drive its operating costs up and increase the chances of it merging with FCA.
“FCA’s manipulation of the collective bargaining process resulted in unfair labor costs and operational advantages, causing harm to GM,” GM said in a statement. “With this lawsuit, GM is seeking to reinforce that bargaining must be free from fraud and corruption.”