By on July 7, 2020

mary barra gm

General Motors saw half of its wishes granted this week, after an appeals court overturned an order by U.S. District Judge Paul Borman for the CEOs of GM and Fiat Chrysler to meet and settle their differences in person.

GM is suing FCA, accusing its crosstown rival of racketeering and claiming it lost billions of dollars via FCA’s bribing of UAW officials in return for a series of favorable, low-cost labor agreements. The General wants to go all the way with its case, but Borman stepped in, calling the suit a “nuclear” option. The in-person meeting is now off the table, but Borman’s still on the case.

Part of GM’s appeal sought Borman’s removal from the case; alas, this was not to be.

As reported by The Associated Press (via The Detroit News), the 6th U.S. Circuit Court of Appeals kiboshed the request for GM CEO Mary Barra and FCA CEO Mike Manley to meet in person and work out their differences. Had GM not appealed, that meeting would have occurred sometime last week.

Stating that Borman abused his power by calling for the meeting, the appeals court nonetheless said the judge could still order “a pretrial settlement conference and/or mediation in the normal course.”

The cozy relationship that existed between UAW officials and FCA officials tasked with bargaining with them has been well established by the ongoing federal probe into corruption among the union’s upper ranks. The fact that FCA’s former labor chief is currently cooling his heels in prison is testament to that fact. Still, FCA reiterated its earlier claim that GM’s lawsuit is baseless, vowing to fight its rival in any way necessary.

Just as unbowed, GM pledged to continue the battle.

“This is an important case because former FCA executives have already admitted they conspired to use bribes to gain labor benefits, concessions and advantages,” the automaker said in a statement. “As the facts will show, their corruption caused direct harm to GM and we have a responsibility to our stakeholders seek justice and hold FCA accountable.”

[Image: General Motors]

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8 Comments on “Barra Gets Half: Appeals Court Nixes Make-Nice Meeting Between GM, Fiat Chrysler...”

  • avatar

    It’s like when drug cartels try to out corrupt each other.

    @GM/Barra: Just let it go, man. Try to beat them at better cars and trucks, instead of this race to the bottom and Guadalajara/Guangzhou.

    • 0 avatar

      Barra is interested in appeasing Wall Street and has little interest in quality. You need to look no further than GM’s horrid showing in Consumer Reports. Somebody should tell Barra that Jack Welch managerial technics are out of fashion.

  • avatar
    Jeff S

    A race to the bottom. GM once made some good vehicles. Might see more Hondas, Toyotas, Kias, and Hyundais in my future.

  • avatar

    I did wonder why FCA employees were paid lower wages than Ford or GM. Generally speaking we tend to see “pattern bargaining”. You get a higher wage at one site and that sets the wage “pattern” for all bargaining sites. It is standard Union practice. Stronger bargaining units like to negotiate first since they have the clout to get concessions. If a weak unit goes first they tend to get hit and forces lower wages on the rest.

  • avatar

    Barra should have gone along with the meeting. It might have given GM the chance to cut a sweet deal with FCA.

    • 0 avatar

      It might be too late for that. Barra may see the tough stance as something personal, a way to burnish her reputation as a tough executive in what’s still very much a “man’s world” industry. She was in charge when that last contract was negotiated, and she just can’t let it go.

      • 0 avatar

        She is more concerned about PSA taking over FCA and making this new company larger than GM. She created this situation by selling Opel to PSA, which in turn emboldened them to take over FCA. GM will drop to fifth place because of Barra’s poor strategic planning.

  • avatar
    Jeff S

    I don’t think GM cares about being in the top anymore. Barra’s goal is to cost cut GM into profitability regardless of what happens to GM. Get the earnings per share and market value up enough and maybe another corporation will buy them like Geeley or Tata and she and the board will get a big payout. Agree that Barra is concerned about PSA taking over FCA but she cannot stop it and she needs to negotiate because I doubt GM will win this case. A desperate act of a desperate CEO who has no other plans except to shed more corporate assets and more cost cuts till there is nothing left of GM except a carcass for the vultures to pick clean.

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