Last week, U.S. District Judge Paul Borman ordered General Motors CEO Mary Barra to meet with FCA CEO Mike Manley to try and resolve the legal dispute between the two companies and report back to him by July 1st. Borman cited the current economic and political situation in his reasoning for ordering the two companies to reach an agreement in the matter, which began after GM filed a RICO lawsuit against FCA late last year, but GM has now asked a federal appeals court to remove Judge Borman from the case.
GM sued FCA last year alleging the company bribed top UAW officials in order to get a better deal from the labor union during previous collective bargaining processes. The automaker also claims FCA did this with the specific intent of weakening GM’s business in order to force it to enter a merger with the company. Former FCA CEO Sergio Marchionne, who died in 2018 following surgery complications, approached Barra about entering a merger with FCA back in 2015.
GM’s legal team hit a roadblock last week when Judge Borman ordered GM CEO Mary Barra to meet with FCA CEO Mike Manley to come to an agreement over the dispute, calling it a “waste of time and resources,” and saying such a drastic legal measure was a “nuclear option,” against FCA. The automaker wasn’t happy with that ruling, however, as it has now asked a federal appeals court to remove Borman from the case and overturn the order for the two automaker’s CEOs to reach an agreement.
“The court possesses no authority to order the CEOs of General Motors and FCA to engage in settlement discussions, reach a resolution and then appear alone at a pretrial conference eight days later, without counsel,” GM’s attorneys said. “Second, the court has no business labeling a properly filed federal lawsuit assigned to the court for impartial adjudication `a distraction’ or a `nuclear option.”
GM also says the FBI’s ongoing corruption investigation into FCA and the UAW, which has already seen several individuals charged with conspiracy-related crimes, is evidence that the claims made in its lawsuit are valid.
“We filed a lawsuit against FCA for the same reason the U.S. Department of Justice continues to investigate the company: former FCA executives admitted they conspired to use bribes to gain labor benefits, concessions and advantages,” GM’s legal team also said. “Based on the direct harm to GM these actions caused, we believe FCA must be held accountable. Not pursuing justice rewards wrongdoers at the expense of honest, hard-working people.”
FCA, meanwhile, says it is ready to comply with Judge Borman’s court order and remains adamant that the claims made in GM’s suit are “groundless.” The federal appeals court has yet to respond to GM’s request.