With a lawsuit that was dismissed back in June GM is doubling down on what it claims are ills committed by cross-town rivals Fiat Chrysler. This has been going on for decades but now it seems to have accelerated into the 2020s with more relevance. GM sued Fiat Chrysler back in 2019 alleging corrupt union bargaining. Last month a judge dismissed it. Now GM has brought forth more claims that seem too serious to ignore.
GM claims that in 2015 Fiat Chrysler head Sergio Marchionne was obsessed with merging with GM. He negotiated lower labor costs with the UAW to give Fiat Chrysler a competitive edge to potentially force a merger. The charge was ultimately thrown out of court and expected to evaporate.
Now, new evidence from GM makes a big claim. GM says that “corporate espionage” is outlined in its new racketeering complaint. These new “facts warrant amending the court’s prior judgment.” GM wants the case reinstated.
Originally GM accused Fiat Chrysler of coordinating a bribery scheme with UAW leaders
Originally, GM accused Fiat Chrysler of coordinating a bribery scheme with UAW leaders for a lower labor-cost advantage. Last month, U.S. District Judge Paul Borman dismissed the case. He called it a distraction for the companies and a “waste of time and resources for the years to come.”
“New facts about the direct harm Fiat Chrysler caused GM has come to light and they are detailed in our amended racketeering complaint,” GM says. “These new facts warrant amending the court’s prior judgment, so we are respectfully asking the court to reinstate the case.” According to Automotive News GM’s amended complaint is about 30 pages longer than its original lawsuit.
Fiat Chrysler responded in a statement, “As we have said from the date the original lawsuit was filed, it is meritless. The court agreed and dismissed GM’s complaint with prejudice. Fiat Chrysler will continue to defend itself vigorously and pursue all available remedies in response to GM’s attempts to resurrect this groundless lawsuit.”
Fiat Chrysler came down hard on GM’s depiction of the suit. “As we have said from the date the original lawsuit was filed, it is meritless,” Fiat Chrysler said in a statement on Monday. “The court agreed and dismissed GM’s complaint with prejudice. Fiat Chrysler will continue to defend itself vigorously and pursue all available remedies in response to GM’s attempts to resurrect this groundless lawsuit.”
“A magnitude of bribery and illegal activity specifically targeting GM”
GM also spells out offshore accounts saying Fiat Chrysler “and co-conspirators used a broad network of foreign bank accounts containing millions of dollars in Switzerland, Luxembourg, Liechtenstein, Italy, Singapore, and the Cayman Islands to directly harm GM.” The foreign bank accounts were “controlled in part by individuals purportedly acting on GM’s behalf” and reveal “a magnitude of bribery and illegal activity specifically targeting GM that was not previously known or reasonably knowable,” the filing said.
GM’s claim is that several UAW members that became GM board members funneled proprietary labor strategy information to Fiat Chrysler. In exchange, it paid the individuals in offshore accounts. One of the UAW members Alphons Iacobelli, left Fiat Chrysler in 2015 to join GM. Iacobelli is now serving a five-and-a-half-year sentence in federal prison for his role in the scandal.
Information given to the UAW and Fiat Chrysler allowed them to adjust labor negotiations
The information given to the UAW and Fiat Chrysler allowed them to adjust their labor negotiations and merger efforts, the filing says. In 2017, amid a federal corruption probe, GM tried to question UAW Vice President Joe Ashton about his knowledge of wrongdoing. Ashton refused to speak to GM, breaking company policy. He then resigned from GM’s board. “The newly discovered evidence confirms that GM was the target of the defendants’ scheme, as the scheme was directed not only through the UAW but also from payments to individuals within GM to maximize the direct harm to GM,” the filing said.
Ron Gettelfinger, UAW president from 2002 to 2010, also received payouts from Fiat Chrysler through offshore accounts in Panama and Switzerland, GM claims. Gettelfinger has not been implicated in the federal corruption probe. “The UAW is unaware of any allegations regarding illicit off-shore accounts as claimed this morning by GM ‘on information and belief,’ nor has the U.S. Attorney’s Office, or anyone else, ever raised this type of allegation with the UAW,” the union 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. If any such payments were made or such bank accounts exist, it would obviously be a gross violation of the law, the UAW Constitution, and the oath and responsibilities of anyone in UAW leadership.”