GM lawsuit accuses FCA of labor corruption over last decade

GM lawsuit accuses FCA of labor corruption over last decade

DETROIT — General Motors on Wednesday filed a federal racketeering lawsuit against Fiat Chrysler Automobiles and three former FCA executives who have pleaded guilty in an ongoing federal corruption probe involving the UAW.

GM says FCA engaged in a "multiyear pattern of corruption ... to undermine the integrity of the collective bargaining process and cause GM substantial damages."

Filing the lawsuit against FCA wasn’t “a decision that we made lightly,” GM CEO Mary Barra said at the Barclays 2019 Global Automotive Conference Thursday. “It was something we very, very carefully considered.”

There wasn’t a “level playing field” throughout labor contract negotiations, she said. “We had to take action.”

In addition to FCA, former executives Alphons Iacobelli, Jerome Durden and Michael Brown are named as defendants. The UAW was not named in the suit.

The lawsuit comes at a delicate time for FCA, which agreed last month to a merger with PSA Group of France. FCA also is the last of the Detroit 3 still in negotiations with the UAW over a new four-year labor contract.

GM is seeking damages "not limited to" the billions the automaker claims to have suffered as a result of FCA’s wrongdoing.

"We are astonished by this filing, both its content and its timing," FCA said in an emailed statement. "We can only assume this was intended to disrupt our proposed merger with PSA as well as our negotiations with the UAW. We intend to vigorously defend against this meritless lawsuit and pursue all legal remedies in response to it."

GM, which the UAW chose as the first target of this year’s contract negotiations, lost six weeks of production as workers went on strike after talks broke down. GM has estimated the cost of the strike to be nearly $3 billion, and the resulting deal gave workers larger signing bonuses and steeper raises than the automaker had proposed.

The GM contract is expected to form the basis of the UAW’s deal with FCA, as it did at Ford.

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