General Motors Files Racketeering Lawsuit Against Fiat Chrysler
November 20 2019 - 12:47PM
Dow Jones News
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)
Copyright (c) 2019 Dow Jones & Company, Inc.
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