General Motors Files Racketeering Lawsuit Against Fiat Chrysler--Update
November 20 2019 - 1:38PM
Dow Jones News
By Nora Naughton
General Motors Co. filed a federal racketeering lawsuit
Wednesday against Fiat Chrysler Automobiles NV, accusing it of
corrupting union negotiations in an unusual legal dispute between
crosstown rivals.
According to court documents filed in Michigan, GM's suit is
related to the ongoing federal investigation into corruption
between leaders at the United Auto Workers and Fiat Chrysler's
labor-relations executives. GM accuses Fiat of corrupting the
collective bargaining process in 2009, 2011 and 2015 to solidify a
labor cost advantage for the Italian-American auto maker in its
contracts.
Fiat Chrysler didn't immediately respond to a request for
comment.
GM will ask for "significant damages" from Fiat Chrysler after
the discovery phase of the lawsuit is complete, GM 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 as a result of having 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 the former
top labor-relations executive at Fiat Chrysler, 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.
Shares of Fiat Chrysler fell 3% in midday trading Wednesday, and
GM"s stock dropped 2.4%.
(END) Dow Jones Newswires
November 20, 2019 13:23 ET (18:23 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
Fiat Chrysler Automobile... (NYSE:FCAU)
Historical Stock Chart
From Aug 2024 to Sep 2024
Fiat Chrysler Automobile... (NYSE:FCAU)
Historical Stock Chart
From Sep 2023 to Sep 2024