| 2:27 PM EST

GM Files Racketeering Lawsuit Against FCA

#FiatChryslerAutomobiles #Chrysler #GeneralMotors


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General Motors Co. has filed a federal racketeering lawsuit claiming that Fiat Chrysler Automobiles NV inflicted “substantial damages” on GM through years of corrupt labor relations.

The stunning complaint alleges that the late Sergio Marchionne, CEO at FCA between 2009 and 2018, was the central figure in the scheme. The lawsuit claims Marchionne created and fostered FCA’s fraudulent activity and personally authorized bribes paid to union officials.

GM asserts that FCA conspired with the United Auto Workers union to win lower labor costs and more beneficial operational benefits than those afforded GM. The company seeks unspecified damages covering its past three labor contracts with the union.

The lawsuit, which was filed in the U.S. District Court in Detroit, is against FCA and three of its former executives. All three officials have entered guilty pleas in a widening federal investigation into labor corruption at FCA and GM.

The top executive in the trio is Alphons Iacobelli, FCA’s labor relations chief between 2008 and 2015. He later served as executive director of labor relations at GM before being dismissed upon being charged in the federal corruption probe. He is now serving a 5.5-year prison sentence.

The GM lawsuit also names as defendant Michael Brown, former director of FCA’s U.S. employee relations department; and Jerome Durden, a former FCA financial analyst.

FCA describes itself as “astonished” by the timing and claims of the GM lawsuit. FCA surmises the timing of the GM filing is intended to disrupt the proposed merger of FCA with PSA Group and to interfere with FCA’s current labor negotiations with the UAW.

The latter talks are expected to result in a four-year labor pact patterned after the GM-UAW agreement ratified last month. That accord ended a 40-day strike that cost GM an estimated $2 billion.

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