GM Accuses Fiat-Chrysler Execs Of Racketeering, Files Lawsuit

According to the Detroit Free Press, General Motors filed a lawsuit in U.S. District Court in Detroit, accusing several Fiat Chrysler Automobiles executives - including late CEO Sergio Marchionne - of racketeering.

The lawsuit is related to FCA's relationship with the United Auto Workers, and GM claims Fiat Chrysler has paid "millions of dollars in bribes" for various advantages.

4 Union Strike And Lost Revenue

via Gannett

The lawsuit comes after a 5-week UAW union strike that resulted in a loss of a billion dollars in revenue, which according to GM was due to FCA's bribery scheme with the UAW.

GM bases its fraud claims on an ongoing racketeering investigation the Justice Department went public with back in 2017 - so far 13 FCA and UAW officials have been charged with crimes.

3 Conspiracies And Prison Sentences

via Gannett

Currently, there are four UAW officials serving prison sentences for spending FCA payments on lavish personal expenses, instead of benefitting the union's worker training funds.

As federal prosecutors have revealed new evidence, GM claims its labor contracts with the UAW were part of a "systemic and near-decade-long conspiracy" where the UAW and FCA corrupted GM's bargaining process so FCA could take over GM through a merger.

2 What Lies Behind The Lawsuit?

via The Detroit Bureau

The UAW negotiates separate contracts with each of the domestic automakers and the best-performing automaker creates a model contract for the others.

GM states former FCA CEO Sergio Marchionne paid off the union, and in return was allowed to hire more temporary workers and lower-cost full-time workers than the 25-percent allowable limit to boost profits - something GM was unable to negotiate.

1 FCA And UAW Responds

via aol

FCA say the lawsuit's timing is "astonishing", and assumes it is intended to disrupt their merger with PSA. The UAW tries to distance itself from its imprisoned execs and the federal corruption probe, saying they're committed to making necessary changes to ensure that the "misconduct that has been uncovered will never happen again."

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