General Motors Sues Fiat Chrysler Over Alleged Auto Union Bribes

General Motors Sues Fiat Chrysler Over Alleged Auto Union Bribes

General Motors has filed a lawsuit against Fiat Chysler Automobiles claiming that FCA engaged in corrupt bargaining with the UAW.

Among those named in the lawsuit, according to the Free Press, were former FCA executives Al Iacobelli, Jerome Durden, and Michael Brown. A guilty plea is expected on December 4, according to a court filing Wednesday. Former Fiat-Chrysler CEO Sergio Marchionne is also named in the suit, despite having died in July 2018.

When GM rejected a merger bid from FCA, the lawsuit alleges Marchionne conspired to negotiate a new four-year contract "designed, through the power of pattern bargaining, to cost GM billions".

GM alleges Marchionne, who died a year ago, and the former company officials corrupted the collective bargaining process between the UAW and Detroit's three automakers in 2009, 2011 and 2015.

"FCA was the clear sponsor of pervasive wrongdoing, paying millions of dollars in bribes to obtain benefits, concessions, and advantages in the negotiation, implementation, and administration of labor agreements over time", GM said in its announcement. Alphons Iacobelli, Jerome Durden and Michael Brown were all sentenced to prison time past year following their guilty pleas.

"Alphons Iacobelli has admitted to this scheme and now is in prison for these illegal acts". Durden was a financial analyst for the automaker and Brown was FCA's director of employee relations.

GM General Counsel Craig Glidden said the lawsuit has nothing to do with the merger and the automaker does not intend to file suit against the UAW.

General Motors claims that through these bribes, Fiat Chrysler corrupted the implementation of the 2009 collective bargaining agreement with the union, as well as the negotiation and implementations of the CBAs in 2011 and 2015.

GM filed suit in federal court in MI on Wednesday seeking to recoup unspecified damages from its rival, which has in the past denied being aware three former executives conspired with United Auto Workers officials to undermine labor law.

General Motors is suing Fiat Chrysler, alleging that its crosstown rival got an unfair business advantage by bribing officials of the United Auto Workers union.

For the 2015 labor negotiations, Marchionne allegedly worked with Williams to craft a deal tailored to FCA, while ensuring the UAW's "pattern bargaining" process created intentional monetary harm to GM in the form of high and unexpected labor costs for its USA operations. Those contracts, which were ultimately ratified by our membership, were negotiated with the involvement of both local and global representatives and the process had multiple layers of checks and balances to ensure their integrity.

A spokesman for the UAW said the union contracts were not affected by the bribery scandal but it was "regrettable" the scandal had cast doubt on the process and that the union was committed to cleaning itself up.

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