GM Suing Fiat-Chrysler “$ Billions” For Corruption

The corruption probe of the United Auto Workers union keeps taking more turns and confessions. Now, GM is stoking the flames by suing Fiat-Chrysler’s involvement and placing damages at “$ billions.” The federal racketeering lawsuit also names the three FCA executives that have already plead guilty to UAW corruption.

The suit says FCA engaged in a “multiyear pattern of corruption to undermine the integrity of the collective bargaining process and cause GM substantial damages” according to Automotive News. FCA is currently negotiating a new labor contract with the UAW. Also, FCA is in the middle of a merger with the PSA Group of France.

Fiat-Chrysler “astonished” over GM lawsuit

In an emailed statement FCA says, “We are astonished by this filing, both its content and its timing. We can only assume this was intended to disrupt our proposed merger with PSA as well as negotiations with the UAW. We intend to vigorously defend against this meritless lawsuit and pursue legal remedies in response to it.”

UAW | Getty
UAW | Getty

GM is suing for damages “not limited to” the billions it lost because of FCA’s alleged underhanded dealings with the UAW. The UAW chose GM to initiate contract talks. The resulting strike cost GM six weeks of lost production and untold billions after negotiations broke down. They say the losses were more than $3 billion. The suit also claims the larger signing bonuses and raises were caused by corruption within the UAW.

Suit says FCA corrupted every contract negotiation since 2009

But that’s not all. Craig Glidden, GM general counsel, says that former FCA CEO Sergio Marchionne “was a central figure in conceiving, executing, and sponsoring of the fraudulent activity.” Marchionne died last year. He says FCA corrupted every aspect of 2015, 2011, and 2009 bargaining agreements as well.

Glidden says GM has more than enough evidence from its own investigation. However, it has been further bolstered from the Federal government’s investigation into UAW corruption. Unfair labor costs and operational hindrances damaged GM. He says GM is suing to somehow have leverage that allows for a contract process free of fraud.

Any damages awarded to GM would go toward investment in the US that would benefit GM employees and increase jobs according to Glidden. It has not consulted with other manufacturers including Ford about the lawsuit. Ford had no comment at this time says Automotive News. 

One of the advantages that FCA received was lower net labor costs than GM or Ford. “FCA conceived of the conspiracy orchestrated the conspiracy, and orchestrated the fraud,” Glidden says. “FCA was the central driver of the conspiracy.”

United Auto Workers
United Auto Workers

Part of the UAW’s response says, “Mr. Iacobelli worked for both FCA and GM and he is currently in prison for his crimes, which include the misuse of Joint Program funds. As to the collective bargaining agreements negotiated with FCA while Iacobelli was an FCA manager, 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. Those contracts, which were ultimately ratified by our membership, were negotiated with the involvement of both the local and international representatives and the process had multiple layers of checks and balances to ensure their integrity.”

Needless to say, there are more bombshells to come over the continuing scandal involving the UAW.