Bombshell: General Motors Sues Fiat Chrysler, Names Marchionne in Union Bribery Scheme

Steph Willems
by Steph Willems
bombshell general motors sues fiat chrysler names marchionne in union bribery

As members of the media swarm over new vehicles in Los Angeles, a legal drama is playing out in Detroit. General Motors has filed a federal racketeering lawsuit against cross-town rival Fiat Chrysler, alleging FCA conspired to undermine the collective bargaining process and create unfair advantages by bribing UAW officials.

This cost GM lots of money, the automaker claims, and now it wants to collect.

“This lawsuit is intended to hold FCA accountable for the harm its actions have caused our company and to ensure a level playing field going forward,” said Craig Glidden, GM Executive Vice President and General Counsel, in a statement.

GM’s RICO suit targets FCA and executives who pled guilty in the lengthy federal investigation into corruption among the upper ranks of the United Auto Workers. That probe ensnared, among others, former FCA labor relations chief Alphons Iacobelli and Norwood Jewell, former vice president of the union’s FCA department.

From GM:

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.

FCA corrupted the implementation of the 2009 collective bargaining agreement. It also corrupted the negotiation, implementation, and administration of the 2011 and 2015 agreements.

FCA’s manipulation of the collective bargaining process resulted in unfair labor costs and operational advantages, causing harm to GM.

As reported by Reuters, the suit alleges that late FCA CEO Sergio Marchionne was well aware of the bribery. “Marchionne was a central figure in the conceiving, executing and sponsoring of the fraudulent activity,” Glidden said in the suit.

Marchionne, who died in July 2018, conspired to negotiate a new labor deal “designed, through the power of pattern bargaining, to cost GM billions,” he claimed.

Just how much GM hopes to collect is unknown, though the automaker claims, “All damages recovered will be invested in the U.S. to benefit GM’s employees and grow jobs.”

The suit comes a month after GM weathered a 40-day strike by UAW-affiliated workers; eventually, the automaker forged a new labor agreement that kept existing healthcare benefits and brought temporary workers a pathway to full-time employment. Wage increases and boosted bonuses were also part of the deal. Currently, FCA finds itself facing the UAW bargaining team.

FCA is well aware of the timing.

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

Glidden told media Wednesday afternoon that the lawsuit has nothing to do with the proposed FCA-PSA merger. Nor will it involve the UAW, he added.

“Our sole focus is FCA,” Glidden said.

[Image: General Motors]

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2 of 42 comments
  • Lou_BC Lou_BC on Nov 21, 2019

    Claiming that "pattern bargaining" hurt Chevy is stupid since FCA workers are paid significantly less than GM workers. If the "pattern" were to hold GM would have benefited from FCA's lower wage/benefit packages. Conversely, GM's higher wage and benefit contract with the UAW means that the "pattern" is set and FCA will get saddled with a larger wage/benefit contract.

  • Akear Akear on Nov 21, 2019

    I think GM is worried about PSA's EV technology and its place in the North American market. PSA got a lot of this modern EV technology from Opel, which GM sold to PSA several years ago. GM probably would not be in this situation if they did not sell off Opel.

  • Kwik_Shift A manual bug eye WRX wagon (2001-03) would interest me more.
  • El scotto Ferrari develops a way to put a virtual car in real time traffic? Will it be multiple virtual players in a possible infinite number of real drivers in real time situations?This will be one of the greatest things ever or a niche video game.
  • El scotto It's said that many military regulations are written in blood. Every ship's wheel or aircraft joystick has a human hand on it at all times when a ship or aircraft are under power. Tanks, APC's and other ground vehicles probably operate under the same rules. Even with those regulations accidents still happen. There is no such thing as an unmanned autopilot, ever. Someone has to be on the stick at all times.I do not think MB understands what a sue-happy nation the USA is. The 1st leased MB in a wreck while this Type 3 "Semi-Autonomous" driving, or whatever it is called, will result in an automatic lawsuit. Expect a class action lawsuit after the 1st personal lawsuit is filed. Yes, new MB owners can afford and ever are lawyers.Mercedes Benz; "The best wrecks or nothing!" Oh and has anyone noticed that Toyota/Lexus and Honda/Acura, the gray suit with white shirt and striped tie, automobile companies have stayed away from any autonomous driving nonsense?
  • Merc190 Very streamlined but not distinctive enough for a Mercedes. And besides, the streetcar of the early 20th century seems a far more efficient and effective method of people moving in essentially an autonomous manner. A motor car is meant to be driven with proper attention to what's important in every situation. To design it otherwise is idiotic and contradictory.
  • Abqhudson Passenger seating in recent accords has been unacceptable with my 5’2” wife forced to look at the dash while sitting in the hole provided.