Oh, No You Don't: GM Isn't About to Let Fiat Chrysler Off the Hook

Steph Willems
by Steph Willems

Fiat Chrysler wants to see General Motors’ racketeering lawsuit dismissed, but the automaker’s crosstown rival isn’t in a charitable mood.

GM contends that bribery of United Auto Workers officials by FCA over years of contract talks left that automaker sitting pretty, with extra labor costs dumped on its Detroit competitors. While FCA claims GM can’t prove it’s a victim, The General says otherwise.

In a filing earlier this week, GM rejected FCA’s motion to dismiss the racketeering lawsuit. That motion came in January, two months after GM filed suit.

As reported by Automotive News, GM’s filing claims FCA’s bribery of UAW officials gave it the upper hand while at the same time heaping “outsized and asymmetrical costs” on GM via its 2015 labor contract. The automaker believes FCA, which was angling for a merger with GM at the time, hoped to weaken its rival and pave the way for the tie-up. Brokering the strategy, GM claims, was former CEO Sergio Marchionne.

An ongoing federal corruption investigation revealed plenty of illegal back-scratching between FCA and the UAW going back to 2009. That probe recently saw charges laid against former UAW president Gary Jones.

“Our brief points out a very large number of factual errors and legal deficiencies in the motions filed by FCA NV, FCA US LLC and Al Iacobelli,” GM said in a statement. “We are very confident in our position on these matters and in our RICO case as a whole, and we look forward to the next steps in the case and ultimately preparing for trial.”

In its motion to dismiss, FCA claims GM’s suit falls outside the four-year statute of limitations, claiming it must have known about its lopsided labor costs back in 2015. GM countered by saying it only learned the real story in 2017, when the federal probe collared FCA labor relations boss Alphons Iacobelli. Tasked with keeping the right UAW officials “fat, dumb and happy,” Iacobelli pleaded guilty and in 2018 received a sentence of five-and-a-half years.

Calling GM’s lawsuit “groundless,” FCA said it will continue to defend itself. This ain’t over by a long shot.

[Image: GM]

Steph Willems
Steph Willems

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  • Akear Akear on Mar 11, 2020

    Well, at least the mob is not involved.

  • Detroit-X Detroit-X on Mar 12, 2020

    GM's incompetent executives and their culture of fear they created has done far more damage to GM in any one year than this FCA thing. GM will always leap at every chance to point to an outside excuse for their lame performance. Here come the "extraordinary items" against earnings, again.