General Motors sues Fiat Chrysler over union bribes

General Motors Renaissance Center Headquarters in Detroit Michigan, Photo Date: 10/11/2008 / Cropped Photo: Nakor / CC BY-SA 3.0 / (MGN)
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DETROIT (AP) (11/20/2019) - General Motors is suing Fiat Chrysler, alleging that its crosstown rival got an unfair business advantage by bribing officials of the United Auto Workers union.

The lawsuit, filed Wednesday in U.S. District Court in Detroit, alleges that FCA was involved in racketeering by paying millions in bribes to get concessions and gain advantages in three labor agreements with the union.

Details of the racketeering have been exposed in a federal probe of corruption at the union that has resulted in multiple arrests.

The lawsuit alleges that Fiat Chrysler corrupted the bargaining process with the UAW in the 2009, 2011 and 2015 union contracts to gain advantages over General Motors.

Craig Glidden, chief counsel for General Motors, alleges that Fiat Chrysler CEO Sergio Marchionne, who died last year, was a “central figure” in the company’s alleged racketeering, in which it paid millions in bribes to get concessions and gain advantages in three labor agreements with the United Auto Workers union.

GM claims the conspiracy was designed to put it at a cost disadvantage to FCA.

“FCA’s manipulation of the collective bargaining process resulted in unfair labor costs and operational advantages for it, causing harm to GM,” Glidden said.

He alleges that the UAW allowed Fiat Chrysler to have more temporary workers and more workers who were paid at a lower wage scale.

Glidden says FCA was able to reduce its labor costs in the 2009, 2011 and 2015 contracts with the union. He says the same advantages were denied to GM as part of a bribery conspiracy.

Glidden says GM is not suing the UAW because it believes that FCA was responsible.

The lawsuit also names former FCA labor relations chief Alphons Iacobelli, and former FCA officials Jerome Durden and Michael Brown as defendants.

All have pleaded guilty in a federal corruption probe, which has alleged that Fiat Chrysler bribed UAW officials to keep them “fat, dumb and happy.”

Fiat Chrysler says it will defend itself vigorously. The Italian-American automaker called the lawsuit filed Wednesday by GM “meritless” and said it would pursue all legal remedies in response.

Fiat Chrysler says in a statement that it’s astonished by the lawsuit and it assumes the legal action was intended to disrupt its proposed merger with France’s PSA Peugeot and ongoing contract talks with the UAW.

The UAW says it had multiple safeguards in place to ensure the integrity of its contracts negotiated with Fiat Chrysler.

The union says in a statement that local and international union representatives were involved in the contracts and layers of checks and balances were in place.

The UAW says in a statement that it’s committed to make whatever changes are needed to make sure misconduct never happens again.

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