Last November, General Motors filed a racketeering suit against Fiat Chrysler Automobiles, claiming its rival was involved in a prolonged bribery scheme with UAW leaders to gain an unfair labor-cost advantage. Despite FCA already having staff participating in a vast union corruption scandal, U.S. District Judge Paul Borman dismissed the GM case in July after claiming there was nothing to it beyond petty corporate squabbling.
Now GM is back, claiming it has new evidence against FCA that’s going to blow the lid off everything.
On Monday, the General asked the court to reinstate the racketeering lawsuit. It now claims that there’s evidence of foreign bank accounts used in the alleged bribery scandal. We say “alleged” despite the FBI’s continued investigation into the UAW (separate from the GM-FCA suit) showing criminal levels of corruption. The company even suggested that Alphons Iacobelli (who is already serving time for bribing union officials) channeled sensitive information back to FCA after being hired by GM. The claimed plot then has Fiat Chrysler paying the Iacobelli family millions of dollars via overseas accounts.
“These new facts warrant amending the court’s prior judgment, so we are respectfully asking the court to reinstate the case,” GM said.
FCA has continued to call the suit groundless, even though the Iacobelli connection has already cast a shadow over its credibility. Don’t assume that gives GM a free pass, however. In the FBI’s ongoing probe into the UAW, General Motors has come up a few times and is likewise under examination to see how deep its involvement in the union goes. However, it’s seemingly in the clear for now, making this an opportune moment to try and take out FCA.
In its latest finding, General Motors claimed the case “is much broader and deeper than previously suspected or revealed as it involved FCA Group apparently using various accounts in foreign countries … to control corrupt individuals by compensating and corrupting those centrally involved in the scheme to harm GM.”
“As we have said from the date the original lawsuit was filed, it is meritless,” FCA said in a statement on Monday. “The court agreed and dismissed GM’s complaint with prejudice. FCA will continue to defend itself vigorously and pursue all available remedies in response to GM’s attempts to resurrect this groundless lawsuit.”
Automotive News provided a comprehensive summary of the matter, outlining claims that Iacobelli’s role continued even after he was convicted of corruption charges and began working with the FBI to bust the union in exchange for a reduced sentence. General Motors claims that the money, which is currently managed by his wife, is hush money to be used to protect high-ranking FCA officials that may have been involved in the plot.
From Automotive News:
GM’s filing on Monday in U.S. District Court in Detroit says FCA and co-conspirators used a broad network of foreign bank accounts containing millions of dollars in Switzerland, Luxembourg, Liechtenstein, Italy, Singapore and the Cayman Islands to directly harm GM.
GM points to UAW Vice President Joe Ashton, who later joined GM’s board as the UAW Trust’s designee in 2014, former UAW President Dennis Williams and defendant Alphons Iacobelli, who left FCA in 2015 and then joined GM. The complaint also raises allegations against former UAW President Ron Gettelfinger, who previously has not been named or implicated in any previous cases of UAW corruption.
The foreign bank accounts were “controlled in part by individuals purportedly acting on GM’s behalf” and reveal “a magnitude of bribery and illegal activity specifically targeting GM that was not previously known or reasonably knowable,” the filing said.
The UAW said it was totally unaware of any allegations regarding illicit off-shore accounts and that the issue was never brought up by the U.S. Attorney’s Office, FBI, or anyone else.
“If GM actually has substantive information supporting its allegations, we ask that they provide it to us so we can take all appropriate actions,” the union said this week. “If any such payments were made or such bank accounts exist, it would obviously be a gross violation of the law, the UAW Constitution, and the oath and responsibilities of anyone in UAW leadership.”
[Image: Phil K/Shutterstock]
GM deserves to die. Had no case before, so came up with magic new evidence. The UAW is right, GM should share any such evidence with the UAW.
“GM deserves to die. ”
No one deserves to die, all companies matter.
“…all companies matter…”
I’ll make an exception for GM.
GM is just the definition of corporate greed, no conscious. They don’t even feel like a car company. They’re like a machine spitting out machines.
Yeah, “General Motors”. That fits them perfect. I won’t buy from them, not even used.
Agree, GM was a failed automaker that died….. and should have stayed dead instead of being resurrected with taxpayer money.
But they got a sideline now, making Ventilators. Much in demand within the US and abroad. Good stuff, I’ve been told.
I feel the same way. I love Corvettes and used to be a fan of GM, but I would not purchase from them just because of the company.
GM and FCA are both in business thanks for the US Government.
Before that, Fiat existed courtesy of Rick Wagoner, who overpaid to acquire a stake in Fiat, then had to pay a couple of billion to extricate himself from said stake. The “great” Sergio used that clever extortion fee to keep Fiat in business, and later persuaded the US govt he could save Chrysler—and no one else wanted the whole thing, just Jeep and Ram.
As to the matter at hand, TTAC does not mention what the 6th Ciruit Court of Appeals thinks of the decision to dismiss the case. Per Peter DeLorenzo, among other things, the court found that dismissing the case so that the parties could concentrate on dealing with COVID-19 and racial tensions is unrelated to the case. THAT makes sense.
Sycophantism and greed are the hallmarks of the top leaders in corporate America. As evidence, I say, look at the compensation of GM’s CEO and VPs in the 1960s, when GM was hugely profitable and the “model” for corporate America, and compare it to what CEOs get today, for much lesser companies. Look at Marchionne’s compensation. Look at Barra’s. Sergio made a lot more. Did FCA make a lot more money than GM or Ford? Uh…NO.
I bet GM is onto something. Good for them. If they can get a $500 million or more settlement, why not? And that will help justify THEIR executive compensation too:)
MARY BARRA EARNS MUCH LESS THAN ELON MUSK
GM announced that Mary Barra earned $21 million in total compensation last year. Not bad. But it pales in comparison to what Elon Musk earned. In a 10-K filing, Tesla reported that Mr. Musk earned $2.2 billion as part of a CEO Performance Award applicable to 2018. But it’s all paid in stock and Elon Musk will not be fully invested in those shares until Tesla’s market cap hits $650 billion. Currently, it’s at $147 billion. Autoline Daily
NormSV650, I have great respect for Ms Barra and the task she has accepted.
But I also view her situation like that of the Captain of the Titanic.
There ain’t nuttin’ she can do to keep that boat from sinking.
The FBI, or GM with a score to settle. Who do you believe more?
I’m with the FBI on this one. They had it coming.
I’m getting seriously fed up with GM with regards to these racketeering claims. I think they’re just trying to screw up the upcoming PSA-FCA merger. If they’re so sure of any wrongdoing on FCA’s part, why didn’t they provide evidence already?
The PSA-FCA merger is the heart of it, no doubt. Stellantis will likely be bigger, dropping GM to a lower rung on the global auto rankings. But there are so many little details involved.
There’s the GM sale of money-losing Adam Opel to PSA, only to see Carlos Tavares quickly turn it into break even at the least, and more likely to make a profit, something GM couldn’t do; there’s Ram and Jeep turning GM trucks and off-road vehicles into an also-ran; and there’s GM’s ace in the hole – the Chinese market – in danger of being ruined by the trade war with China.
GM’s top management has screwed up on several levels, and it’s now dawning on them that they’re headed for another bankruptcy, borrowing money to stay afloat during the pandemic with no way to repay it, after cutting so much of their NA market portfolio.