FCA Files to Dismiss GM Racketeering Claim
Fiat Chrysler Automobiles wants a federal court to toss out claims by General Motors that it enjoyed special labor concessions by bribing United Auto Workers union executives.
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Fiat Chrysler Automobiles wants a federal court to toss out claims that it enjoyed years of special labor concessions by bribing United Auto Workers union executives.
General Motors filed the complaint last November in the U.S. District Court in Detroit, alleging it suffered “substantial damages” because of a long history of misdeeds between FCA and the UAW.
The GM suit alleges that FCA executives, including the late CEO Sergio Marchionne, conspired to damage GM in hopes of coaxing the larger company into a merger. Marchionne’s overtures were rebuffed. Last year FCA sought to combine with Renault, quickly abandoned that overture and now expects to finalize a merger with PSA Group in 2021.
Fiat Chrysler’s U.S. headquarters (Image: FCA)
GM says its complaint is bolstered by the guilty pleas of three former FCA employees in a continuing probe by the U.S. Dept. of Justice into conspiracy and bribery involving FCA, the UAW, GM and other entities.
FCA grouses that GM filed its complaint now only to torpedo the PSA merger talks (GM CEO Mary Barra noted when the lawsuit was filed that GM pondered the move “very, very carefully” before pressing ahead.).
FCA, which called the lawsuit “shocking” back in November, had assembled multiple arguments for why the court should reject GM’s claim.
For starters, the company says, GM’s assertions don’t make economic sense. FCA pooh-poohs GM’s claims as hyperbole, chides the company for failing to figure out long ago that its labor costs were higher than FCA’s and contends that GM’s filing doesn’t show how it was directly harmed, even if there was corruption going on.
GM filed its case under the federal RICO (Racketeering Influenced and Corrupt Organization) Act. FCA says RICO’s four-year statute of limitations bars recovery of alleged damages occurring before November 2015 anyway.
Just to make sure it left no defensive stone unturned, FCA further contends that GM’s lawsuit wasn’t filed in the right venue. Despite its lack of merit, the case should have been filed with the National Labor Relations Board instead of a district court, FCA’s motion says.
GM shrugs off FCA’s litany as nothing more than routine posturing and says it awaits its chance to respond in court. Until then, it’s unclear whether this squabble will get serious or peter out.
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