General Motors Co. today announced the filing of a federal racketeering lawsuit against Fiat Chrysler Automobiles and former FCA executives who have pled guilty in an ongoing federal corruption probe.
The lawsuit, says GM, exposes a multi-year pattern of corruption that FCA used to undermine the integrity of the collective bargaining process and cause GM substantial damages.
At the core of this lawsuit are clear admissions of wrongdoing made by former FCA executives, including the late CEO Sergio Marchionne, revealed through the continuing criminal investigation by the U.S. Attorney’s Office in the Eastern District of Michigan.
“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,” says Craig Glidden, executive vice president and general counsel for GM.
“We are astonished by this filing, both its content and its timing,” says FCA in a prepared statement. “We can only assume this was intended to disrupt our proposed merger with PSA as well as our negotiations with the UAW. We intend to vigorously defend against this meritless lawsuit and pursue all legal remedies in response to it.”
GM alleges that FCA was the “clear sponsor of pervasive wrongdoing, paying millions of dollars in bribes to obtain benefits, concessions, and advantages in the negotiation, implementation, and administration of labor agreements over time.”
The suit goes on to claim that FCA corrupted the implementation of the 2009 collective bargaining agreement and corrupted the negotiation, implementation, and administration of the 2011 and 2015 agreements.
FCA’s manipulation of the collective bargaining process, says GM, resulted in unfair labor costs and operational advantages, causing harm to the Detroit-based automaker.
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, the company said.