| 6:33 PM EST

FCA Blasts GM’s Espionage Charges as “Despicable”

The posturing continues as both sides claim the high ground
#FiatChryslerAutomobiles #GeneralMotors #Fiat


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New charges by General Motors about the damages inflicted upon it by Fiat Chrysler Automobiles read like a “third-rate spy movie,” retorts FCA.

FCA also blasts the latest round of assertions as “despicable” and dismisses them as a “smear campaign” built on “preposterous allegations.”

Retorts GM: “FCA’s corruption of the collective bargaining process remains undeniable.” The company vows to uncover the “full extent of harm the FCA bribery scheme caused GM.”

Back and Forth

This catfight began last November when GM filed a racketeering complaint before U.S. District Court Judge Paul Borman in Detroit. The company claims it has suffered for years from higher hourly labor costs in the U.S. because FCA bribed officials of the United Auto Workers union to get more favorable labor contracts for itself.

GM points to a continuing federal probe that has convicted former FCA officials and UAW executives of conspiring to divert funding intended for a joint UAW-FCA training center outside Detroit. The investigation has since moved on to internal wrongdoing at the union, including fraud and embezzlement involving UAW executives up to and including its president.

In June, Borman belittled GM’s lawsuit as a “waste of time” and was chastised a month later by an appellate court for not pressing for options a formal trial, such as mediation. When the case was bounced back to him, Borman quickly dismissed it on the grounds that GM had failed to prove damage.

GM expanded its complaint last week. Now it alleges that FCA also tapped foreign banks to pay former UAW and FCA executives to spy on GM’s board meetings and learn secrets about its labor strategy.

In a separate letter to employees about the new claims, FCA CEO Mike Manley shrugs off the new attack as “directly related to our success in competing and winning where it matters, in the market.”

Action Time

So far, there’s been plenty of schoolyard taunts and posturing but not much substance. That phase is pretty much over now.

GM’s claims won’t be decided by which company comes up with the snappiest zingers. It’s going to come down to facts and proof.

GM seems more determined than ever to lay out its case. Which means things could be about to get very, interesting, folks.

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