| 6:42 PM EST

GM Charges FCA with Corporate Espionage

New claims of offshore accounts, boardroom moles and more
#Chrysler #GeneralMotors #Fiat


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General Motors isn’t giving up on its claim that Fiat Chrysler Automobiles has done it wrong.

On the contrary. GM says it has new evidence that FCA and several of its former executives are guilty of corporate espionage that involved foreign bank accounts, boardroom moles and millions of dollars in secret payoffs.

FCA reiterates in a statement that it believes GM’s case is groundless and without merit and vows to “continue to defend itself vigorously.”

Spy Stuff

The new amendments, which read like a spy novel, were filed earlier today in the U.S. District Court in Detroit. “These new facts,” GM asserts, “warrant amending the court’s prior judgment,” which had dismissed the company’s racketeering case a month ago.

In its original complaint last November, GM claimed FCA used bribes to win better labor deals with those made with the United Auto Workers than those made between GM and the union. The filing said its case was buttressed by a continuing federal investigation into payoffs and illegal use of funds intended for a joint FCA-United Auto Workers union employee training center.

GM’s lawsuit claimed that the FCA scheme was masterminded by Sergio Marchionne, then CEO of FCA. Marchionne died unexpectedly two years ago.

But Judge Paul Borman, describing the prospect of a trial a distraction and “waste of time and resources,” abruptly ordered the CEOs of FCA and GM to have an immediate face-to-face meeting to resolve the issue. GM appealed and asked that a new judge take over. The appellate court refused to reassign the case, bouncing it back to Borman and suggesting he consider other alternatives, such as mediation.

Two days later, Borman tossed out the lawsuit, saying GM had failed to prove it had been damaged.

Secret Payments

GM’s new charges claim that FCA funded its espionage with millions of dollars in secret funds stashed in the Cayman Islands, Italy, Liechtenstein, Luxembourg, Panama, Singapore and Switzerland. The carmaker says it wasn’t aware of the offshore funds when it filed its original complaint.

The new submissions zero in on two former UAW presidents—Dennis Williams and Ron Gettelfinger—along with Joe Ashton, former head of the union’s GM department, and Alphons Iacobelli, former U.S. labor chief for FCA.

It wasn’t immediately clear whether GM has new complaints against Williams, who has been implicated but not charged in the training center probe. Gettelfinger has not been accused of any wrongdoing in the federal investigation, but GM claims he and a family member also received payments from FCA through offshore accounts.

Multiple Moles

GM further asserts that Ashton, who later joined its board, acted as a “paid mole” for FCA. The filing says Ashton conveyed confidential details about GM’s labor strategy and risk concerns to FCA and the UAW.

The amended complaint also claims that Iacobelli, who abruptly quit his job at FCA in 2018 and then joined GM’s labor relations department, also used his new position there to gather and turn over details of GM’s labor strategy to FCA.

GM’s filing asserts that Iacobelli continued to shield others involved in the cheating even as he agreed to cooperate with federal investigators pursuing the FCA-UAW training center scandal. He currently is serving a five-and-a-half-year prison sentence after pleading guilty to conspiracy.

GM says that some of the funds earmarked for Iacobelli are still available to him and are being managed by his wife.

Now What?

The new allegations certainly appear to give GM’s racketeering complaint new juice. Whether the court agrees will depend upon Judge Borman’s take on the amended filing.

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