General Motors (GM) has sued Fiat Chrysler Automobiles (FCA), accusing it of bribing union officials to disrupt negotiations. FCA has vowed to fight the charges, in response claiming that its rival is trying to disrupt its merger with the PSA Group.
GM has filed a federal racketeering lawsuit in the US against FCA and a number of former executives at the Italian-American firm who've previously pled guilty in a federal corruption probe. In the lawsuit, GM claims FCA engaged in a “multi-year pattern of corruption” to “undermine the integrity of the collective bargaining process and cause GM substantial damages".
According to GM, the lawsuit is based on “clear admissions of wrongdoing made by former FCA executives revealed through the continuing criminal investigation by the US Attorney’s Office in the Eastern District of Michigan.”
GM claims that FCA bribed officials from the United Auto Workers (UAW) union to disrupt negotiations with GM over collective bargaining agreements in 2009, 2011 and 2015. GM claims this “manipulation of the collective bargaining process” resulted in “unfair labour costs and operational advantages, causing harm to GM”.
Craig Glidden, GM’s general counsel, said: “This lawsuit is intended to hold FCA accountable for the harm its actions have caused our company and to ensure a level playing field going forward.”
In response, FCA issued a statement saying: “We are astonished by this filing, both its content and its timing. We can only assume this was intended to disrupt our proposed merger with PSA as well as our ongoing negotiations with the UAW. We intend to vigorously defend against this meritless lawsuit and pursue all legal remedies in response to it.”
In a subsequent press conference, Glidden told reporters that the lawsuit was unrelated to the planned FCA-PSA merger.
FCA is currently negotiating a new four-year collective bargaining agreement with the UAW while also working on the planned merger with the French company. That agreement would create the world’s fourth-largest car firm in terms of sales. PSA, which owns former GM brands Vauxhall and Opel, doesn't have a presence in the US.
UAW and GM recently agreed a tentative deal after a long dispute over a new collective bargaining agreement, which led to a number of strikes over pay and GM's plans to reduce its workforce and close plants.