General Motors sues Fiat Chrysler over alleged corrupt UAW bargaining - Roadshow

Darnell Taylor
November 21, 2019

The largest automaker in the USA has filed a federal racketeering lawsuit against Fiat Chrysler Automobiles over alleged corrupt behavior during the collective bargaining process, implementation and administration of the 2011 and 2015 labor negotiations.

"The multi-year bribery scheme FCA led undermined the integrity of the collective bargaining process and caused GM substantial damages", Glidden said, referring to Fiat Chrysler Automobiles.

The lawsuit comes at a delicate time for FCA, which is working on a planned merger with French automaker PSA PEUP.PA and is negotiating a four-year labor contract with the UAW. "We can only assume this was meant to disrupt our proposed merger with PSA as well as our negotiations with the UAW". While it's public knowledge the late CEO was adamant about merging with another automaker, and that Marchionne approached GM about merging, GM accuses FCA and the UAW of conspiring to "force" such a merger. The automaker has denied timing the filing of the suit with the UAW's upcoming contract negotiations with Chrysler.

Last month, the union settled with GM after a 40-day strike, and Ford workers reached an agreement shortly after.

The lawsuit characterizes Marchionne and former UAW President Dennis Willams as two key players in forcing GM's hand into a merger through corrupt bargaining.

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"We are confident that the terms of those contracts were not affected by Iacobelli's misconduct, nor that of any UAW officials involved in the misuse of joint program funds at FCA", the statement said. That said, the fact that these issues can cause doubt about the contracts is regrettable.

According to a press release from GM, that corrupt bargaining came out in "clear admissions of wrongdoing made by former FCA executives who have pled guilty in an ongoing federal corruption probe". GM said that probe, coupled with its own investigation, resulted in the lawsuit. The union is now immersed in labor talks with FCA, the last of Detroit's "Big Three" to negotiate after workers ratified contracts with GM and Ford.

That system has been credited in part for helping to turn around struggling operations like FCA's plant in Toledo, Ohio, that makes the popular and profitable Jeep Wrangler. "We are committed at the UAW to take all necessary steps including continuing to implement ethics reforms and greater financial controls to prevent these type of charges from ever happening again".

GM filed suit in federal court in MI on Wednesday seeking to recoup unspecified damages from its rival, which has in the past denied being aware three former executives conspired with United Auto Workers officials to undermine labor law.

Fiat got an upper hand in the negotiation, administration and implementation of labor pacts by paying millions of dollars in bribes to UAW officials going back to 2009, GM alleges.

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