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.

  • GregLocock The predictable hysteria and repetition of talking points in the meeja is quite funny. it does not divide Oxford into six zones. it restricts access at 6 locations , one on each road, to reduce congestion in the town centre. Florence, which faces the same issue, traffic and narrow historic streets, lined with historic buildings, simply closed the entire town centre off. Don't see anybody whining about that.
  • Jeff S I have rented from Hertz before and never encountered this but if I had I would sue them. Would not want a gun pointed at me and thrown in jail for renting a car.
  • Arthur Dailey I did use a service pre COVID to get the pricing that the dealers were alleged to have paid the manufacturer. It also provided 'quotes' from multiple dealers .
  • Arthur Dailey Has anyone else concluded that we may have a new 'troll' on this site?
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