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FCA Chairman John Elkann Not Worried About GM Lawsuit

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.

Sergio Marchionne

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.”

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Source: Reuters/Detroit Free Press

Sam loves to write and has a passion for auto racing, karting and performance driving of all types.

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Comments

  1. G.M should be worried about “8 speed automatic transmission lawsuit” though..May be they are just running the clock out on these transmissions(as in my case) but their sales will reflect it over the next 5 years .

    Reply
  2. GM is mad RAM #2 Silverado&GMC whatever

    Reply
  3. If GM spent half as much money as they have on R&D and bringing competent vehicles to market as they have on lawyers and lawsuits, maybe it wouldn’t be retreating all over the world with its’ lousy products.

    Reply
    1. Plus … bring vehicles to market people might actually want. They did away with the Chevy Astro, big mistake. And they (to include all the manufacturers) need to get over the suv/crossover maddness. Plus get away from the insane tire an rim combinations, get back to the industry standards of 13″, 14″, and 15″ wheels on light trucks and cars, the 17″ wheels on cars like a Ford Focus or Chevy Cruse is silly … the literally can’t take a pothole.

      Reply
    2. One other point … GM (unless they paid off the note) still owns a chunk of Group PSA … several billions of dollars worth. This might be GM’s real reason … the bank will call the loan due they got during the Obama bail-out-days. For GM to get the Obama dollars, they had to buy a stake in Group PSA … around $50 Billion. This is where some of the Buick line up comes from.

      Reply
  4. Maybe if GM stopped relying on substandard foreign parts their lousy products would improve. Plus the union has full
    control of GM and are really behind all decision making processes in the company. I think toyota should consider an offer on
    GM.

    Reply
  5. Chrysler was just given away to Fiat by the Obama administration…that is known. But if FCA got cozy with the UAW causing an unfair disadvantage to American companies, that’s something else. I would like to see that proven in court. And yes…FCA is hardly an American company anymore.

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  6. I could be wrong, but think that’s basically what Captain Edward Smith said about 107 years ago…

    Reply

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