GM sues Fiat Chrysler over alleged union bribes

GM sues Fiat Chrysler over alleged union bribes

GM sues Fiat Chrysler over alleged union bribes

The largest automaker in the U.S. has filed a federal racketeering lawsuit against Fiat Chrysler Automobiles over alleged corrupt behavior during the collective bargaining process, implementation and administration of the 2011 and 2015 labor negotiations.

The lawsuit characterizes Marchionne and former UAW President Dennis Willams as two key players in forcing GM's hand into a merger through corrupt bargaining.

The lawsuit references guilty pleas by former FCA officials, who bribed former United Auto Workers officials, in a long-running case involving a UAW employee training program, that has tarnished the union's image. The union is now immersed in labor talks with FCA, the last of Detroit's "Big Three" to negotiate after workers ratified contracts with GM and Ford. "Marchionne authorized these bribes, and additional things of value to UAW officials, so that FCA could more effectively compete and thrive against GM and, as detailed below, ultimately attempt to force a merger with GM", the lawsuit reads.

GM alleges that FCA, under the leadership of former CEO Marchionne, used bribes to UAW officials to corrupt the collective bargaining process from 2009 through 2015. Mr. Iacobelli worked for both FCA and General Motors, and he is now in prison for his crimes, which include the misuse of Joint Program funds. Following Fiat's total takeover of Chrysler in 2014, which gave us FCA, the lawsuit explains Marchionne turned to Williams, a longtime friend and a "merger 'wingman.'" Williams allegedly agreed to help Marchionne and FCA as the union's finances were out of control.

Fiat-Chrysler has not yet publicly responded to the lawsuit.

"It (the lawsuit) can't help but complicate the already hard task of getting a UAW-FCA agreement in place", said Kristin Dziczek, vice president of industry, labor and economics at the Center for Automotive Research (CAR) in MI.

"Marchionne was a central figure in the conceiving, executing and sponsoring of the fraudulent activity", Glidden said.

"We can only assume this was meant to disrupt our proposed merger with PSA as well as our ongoing negotiations with the UAW", Fiat Chrysler said in a statement.

In a statment, the UAW said, "The UAW is focused on continuing to implement ethics reforms and greater financial controls to make sure the misconduct which has been uncovered will never happen again".

But Glidden told reporters that in the three UAW contracts, FCA was able to reduce its labor costs because the union allowed it to hire more temporary and lower-paid workers than GM. "That was part of the conspiracy", Glidden said. "We believe the responsibility firmly rests on the orchestrater of the wrongdoing, and we plan to hold FCA responsible".

GM filed suit in federal court in MI on Wednesday seeking to recoup unspecified damages from its rival, which has in the past denied being aware three former executives conspired with United Auto Workers officials to undermine labor law.

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