mobile-menu-icon
GM Authority

Judge Orders General Motors, FCA To Meet And Resolve Racketeering Lawsuit

The judge presiding over General Motors’ lawsuit against Fiat Chrysler Automobiles has ordered the two automakers to meet and try to resolve the matter to avoid an expensive, drawn-out court proceeding that may last years.

According to Automotive News, U.S. District Judge Paul Borman ordered General Motors CEO Mary Barra to meet with FCA CEO Mike Manley before July 1st to try and reach an agreement over the case. Judge Borman believes that allowing the case to work its way through the court will be a “waste of time and resources for the years to come,” and will hurt both companies in the end.

FCA CEO Mike Manley

“These legalities will not only divert and consume the attention of key GM and FCA executives from their day jobs – issues of vehicle production, sales, worker safety, rollouts, supplier issues etc. – but also prevent them from fully providing their vision and leadership of this country’s most pressing social justice and health issues,” Judge Borman said, as quoted by AN. “I mean directly, not through committees that they may set up.”

GM sued FCA last November under the Racketeer Influenced and Corrupt Organizations Act (RICO), alleging FCA corrupted UAW negotiating processes by offering bribes to top UAW officials. GM also claims FCA did this with the specific intent of weakening GM’s financial standing, which would then force it to enter a merger with the automaker. Former FCA CEO Sergio Marchionne, who died in 2018, had previously approached Barra about entering a merger with FCA.

Former FCA CEO Sergio Marchionne

GM remains adamant that it has a good RICO case against FCA, though it will adhere with the court order to meet with FCA officials.

“GM has a very strong RICO case and we look forward to constructive dialogue with FCA consistent with the court’s order,” the automaker said in a statement.

Judge Borman also said that GM and FCA should focus on the health of their companies amid the COVID-19 pandemic – especially since both automakers were bailed out by American taxpayers amid the 2009 financial crisis.

“Today, our country needs and deserves that these now healthy, great companies pay us back,” he said.

FCA echoed this sentiment, saying “we also agree that FCA’s focus should continue to be – as it always has been- on building great vehicles for our customers and expanding opportunities for the thousands of women and men whose livelihoods depend on that focus.”

Subscribe to GM Authority for more General Motors competition news, General Motors legal news and around-the-clock General Motors news coverage.

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

Subscribe to GM Authority

For around-the-clock GM news coverage

We'll send you one email per day with the latest GM news. It's totally free.

Comments

  1. I don’t suppose that the general public will ever know exactly what really happened regarding the bribery situation, although GM obviously has a strong belief in the matter. Under the present circumstances (Covid 19) it would make sense that they get on with their respective businesses without further delay. The judge obviously has detailed information and appears to be trying to get this matter resolved quickly, preferably out of court. I must admit that I have never been a fan of unions given their past record of fleecing their members out of millions of dollars and bankrupting at least one major pension fund. Yes, a relative got caught in that one and lost his entire pension after having contributed for better than 20 years. No bailout out there.

    Reply
  2. In other words, GM is full of CRAP! GM was and is paranoid of a hostile takeover. I’m assuming that is because they know they have poor leadership who are potential sellouts for the right amount of money. Proof that money matters so much to them is the fact that they are paranoid they will lose market share if they quit making GMC and Buick grilles to put on cars. Hell, they might gain market share if could see that they have some integrity.

    Reply
    1. Explain how and where a hostile takeover would come from? Ford on the other hand…

      Reply
      1. Where?! You didn’t read the article?! You don’t remember Sergio telling Marry “I can hug you like a bear”? If GM was to become weakened back when Sergio was around he would have convinced GM shareholders to merge and ole Marry would have been out a job. Why do you think this argument in the lawsuit exists? All you people down thumbing act like you can’t remember a year ago, jeez. I’m pretty sure GM buys its owns shares so no one else can buy a controlling stake in them.

        Reply
        1. This is now over.

          Sergio Marchionne is dead, and FCA is merging with PSA.

          Reply
  3. What judicial overreach. Everything the judge said is irrelevant to the case. The discussions will fail, and this will go trial. Gm has no interest in settling.

    Reply

Leave a comment

Cancel