GM Hits Fiat Chrysler with Bombshell Corruption Lawsuit


The Deported
Feb 1, 2007
Dallas, Texas
00 4Runner | 02 919 | 87 XJ6 | 86 CB700SC
The inevitable consequence of the Obamaruptcy practice of putting the unions in partial charge of Chrysler has come home to roost - giant lawsuits over the UAW extorting more money from GM (and probably Ford) than from 'their' auto company.

GM says Fiat Chrysler has been in cahoots with the UAW for years, and it's cost them billions.

Earlier in the week, Fiat Chrysler became the last among the Detroit 3 to sit down at the bargaining table with the United Autoworkers Union. And while it’s easy to predict at least some drama, a new twist revealed Wednesday will provide a backdrop for the talks that NBC News is calling “explosive.”

That’s because rival automaker General Motors has just filed a federal racketeering lawsuit, alleging a decade-long conspiracy between FCA and the UAW. And the mastermind behind it, according to the suit, is former – and now deceased – Fiat Chrysler CEO, Sergio Marchionne.

GM contends that FCA corrupted bargaining agreements between 2009 and 2015, meaning GM wound up on the hook for labor costs it otherwise wouldn’t have. GM also alleges that the union was directed to deny the same benefits to GM that it was allowing for FCA, a claim they support by pointing to the $8-per-hour difference in labor costs between the two automakers, perhaps because FCA was quietly permitted by the union to hire more temporary workers at lower wages.

The suit said 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." GM contends this scheme saddled it with billions in costs and a significant disadvantage – and while it won’t yet put a number on the damages it intends to pursue, GM’s general counsel Craig Glidden says it is likely to be “substantial.”

FCA responded harshly to the lawsuit, suggesting its content and timing were “intended to disrupt (its) proposed merger with PSA as well as (its) negotiations with the UAW.” That said, FCA’s cozy relationship with the UAW has come to light in recent years, as an ongoing corruption probe into the union has revealed several executives complicit in a bribery scheme intended to divert funds to union officials in the name of “relationship building.”

In perhaps the most explosive of all the claims is the part of the lawsuit where GM alleges that Sergio Marchionne was scheming to take over GM by merger, and he would enable favorable terms by having the union in his pocket – a pursuit he allegedly laid the groundwork for by authorizing UAW bribery.

For its part, GM denies the lawsuit was timed to either disrupt union talks or to derail FCA’s proposed merger.
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Forum Addict
Sep 6, 2008
Michigan USA

GM asks judge to reinstate racketeering case against rival Fiat Chrysler

General Motors Co on Monday asked a U.S. federal judge to reinstate a racketeering lawsuit against Fiat Chrysler Automobiles NV (FCA), saying it has new information on foreign accounts used in an alleged bribery scheme involving its smaller rival and union leaders.

In its filing to U.S. District Judge Paul Borman, GM says the scheme, which it alleges occurred between FCA executives and former United Auto Workers (UAW) leaders, “is much broader and deeper than previously suspected or revealed as it involved FCA Group apparently using various accounts in foreign countries ... to control corrupt individuals by compensating and corrupting those centrally involved in the scheme to harm GM.”

Last month, Borman threw out the racketeering lawsuit, saying the No. 1 U.S. automaker’s alleged injuries were not caused by FCA’s alleged violations.

GM alleged FCA bribed UAW officials over many years to corrupt the bargaining process and gain advantages, costing GM billions of dollars. GM was seeking “substantial damages” that one analyst said could have totaled at least $6 billion.

“These new facts warrant amending the court’s prior judgment, so we are respectfully asking the court to reinstate the case,” GM said in a statement.

“FCA will continue to defend itself vigorously and pursue all available remedies in response to GM’s attempts to resurrect this groundless lawsuit,” FCA said in a statement.

In affidavits accompanying GM’s filing, attorneys for the automaker said “reliable information concerning the existence of foreign bank accounts” used in the alleged scheme had only come to light recently.

“The UAW is unaware of any allegations regarding illicit off-shore accounts as claimed,” by GM, the UAW said in a statement. “If GM actually has substantive information supporting its allegations, we ask that they provide it to us so we can take all appropriate actions.”