General Motors Files Racketeering Lawsuit Against Fiat Chrysler

By Nora Naughton

General Motors Co. filed a federal racketeering lawsuit Wednesday against Fiat Chrysler Automobiles NV and a handful of former executives at the Italian-American auto maker.

GM's suit is related to an ongoing federal investigation into corruption in the United Auto Workers top ranks and the company's possible involvement. GM is accusing its crosstown rival of corrupting the collective bargaining process in 2009, 2011 and 2015 to solidify a labor cost advantage.

GM will ask for "significant damages" from Fiat Chrysler after the discovery phase of the lawsuit is complete, GM's chief legal counsel Craig Glidden said Wednesday.

GM, in the lawsuit, alleges that Fiat Chrysler orchestrated the alleged corruption through then-Chief Executive Sergio Marchionne, who died last year. Fiat Chrysler currently has an $8 hourly labor cost advantage over GM, largely benefiting from a larger population of workers that haven't yet reached the top wage scale.

The Justice Department's yearslong probe first became public in July 2017 and initially focused on a conspiracy by Fiat Chrysler executives to keep UAW officials "fat, dumb and happy," as prosecutors have said. The three executives named in GM's lawsuit, including Fiat Chrysler's former top labor relations executive, have all pleaded guilty to charges related to the federal investigation. Fiat Chrysler has said the misconduct was perpetrated by a small group of individuals acting in their own interest.

The federal corruption probe has since widened, ensnaring several current and former UAW officials and implicating UAW President Gary Jones, who is currently on a leave of absence.

(END) Dow Jones Newswires

November 20, 2019 12:32 ET (17:32 GMT)

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