Fiat Chrysler has filed a motion to dismiss the federal racketeering lawsuit filed against it by General Motors, citing clear flaws and “hyperbolic claims” in the case put forth by GM’s lawyers.
GM filed the lawsuit against FCA last November, accusing the automaker of “paying millions of dollars in bribes,” to the United Auto Workers union in order to “obtain benefits, concessions, and advantage” during the 2011 and 2015 collection bargaining processes. The lawsuit also alleged that FCA did this with the intent of weakening GM’s business so it would be encouraged to enter a merger with FCA. Former CEO Sergio Marchionne had previously been looking to merge the company with another major automaker and consolidate the companies’ development costs, having previously failed to convince GM CEO Mary Barra to join the two companies.
“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 November.
The saga continued this week when FCA filed to have the RICO case dismissed. FCA’s motion to dismiss the suit accused GM of trying to “piggyback off indictments and plea agreements” that have come about due to the FBI’s corruption probe into the UAW. The FBI’s probe focuses on several top UAW officials, who are accused of taking bribes and misappropriated union dues for their own gain. The motion also challenged GM’s theory that FCA bribed the UAW in order to weaken GM’s position, saying that taking concessions from the UAW harmed FCA itself, as it knew the UAW “would extract those same concessions from GM through so-called ‘pattern bargaining.'” Pattern bargaining refers to the process in which the UAW negotiates with the Detroit Big Three, taking the contract agreed upon with one automaker and using it as a framework for discussions with the next.
Former FCA CEO Sergio Marchionne
“As we have said from the beginning, this lawsuit is meritless and malicious and will not distract FCA from its mission to provide its customers with outstanding and exciting cars, trucks and SUVs and the continued implementation of its long-term strategy to create further significant value for all its stakeholders,” FCA said in a prepared statement.
GM’s lawsuit was filed shortly after FCA signed a memorandum of understanding to merge with French automotive giant Groupe PSA. The two companies officially signed the plan into action in December, making the 50/50 merger official.
GM described FCA’s motion to dismiss the suit as a “predictable tactic taken by the defendants,” adding that it looks forward to responding to the claims in court.
“We are confident in the legal and factual underpinnings of our case, which have already been documented in part through the guilty pleas and admissions of FCA executives made in connection with the government’s ongoing criminal investigation,” GM also said.
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Source: Automotive News Europe
Comment
Seems the lawsuit timing was a long shot to interfere with the upcoming merger and/or retaliate against the UAW strike.