General Motors has filed a federal racketeering lawsuit against Fiat Chrysler Automobiles and several former FCA executives, accusing the automaker and at least three of its employees of carrying out a “multi-year pattern of corruption” that it used to “undermine the integrity of the collective bargaining process” with the UAW.
The suit relates to the collective bargaining processes that led to the 2011 and 2015 national agreements with the UAW. GM alleges FCA corrupted the bargaining process on both occasions, accusing the automaker of “paying millions of dollars in bribes to obtain benefits, concessions, and advantages in the negotiation, implementation, and administration,” of the labor agreements.
“FCA’s manipulation of the collective bargaining process resulted in unfair labor costs and operational advantages, causing harm to GM,” the automaker said in a statement. “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.”
GM says that former FCA CEO Sergio Marchionne “was a central figure in conceiving, executing and sponsoring the fraudulent activity,” during the collective bargaining processes. Former FCA executives Alphons Iacobelli, Jerome Durden and Michael Brown are also named as defendants in the case. The UAW itself is not named in the lawsuit.
FCA has enjoyed a lower net labor cost than GM in previous years, GM also claimed, which could be a result of the alleged bribes. While Ford may have also been affected by FCA’s alleged UAW corruption, GM did not consult with the automaker in joining the RICO suit, Automotive News reports.
“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,” GM General Counsel Craig Glidden said in a prepared statement.
FCA has yet to release a statement regarding the suit. The case against it comes at a precarious time for the automaker, which recently entered a partnership with France’s PSA Groupe. FCA also entered contract discussions with the UAW on Monday over a new national labor agreement.
Source: Automotive News