The largest automaker in the U.S. has filed a federal racketeering lawsuit against Fiat Chrysler Automobiles over alleged corrupt behavior during the collective bargaining process, implementation and administration of the 2011 and 2015 labor negotiations.
The move comes at a delicate time for FCA, which is working on a planned merger with French automaker PSA (PEUP.PA) and is now negotiating a four-year contract with the UAW.
"Mr. Iacobelli worked for both [Fiat Chrysler] and General Motors, and he is now in prison for his crimes, which include the misuse of Joint Program funds", the statement said.
"We can only assume this was meant to disrupt our proposed merger with PSA as well as our ongoing negotiations with the UAW", FiatChrysler said in a statement.
"The multi-year bribery scheme FCA led undermined the integrity of the collective bargaining process and caused GM substantial damages", Craig Glidden, GM's general counsel, told reporters at a briefing at the company's Detroit headquarters.
GM filed the suit less than a month after the end of a 40-day strike by the company's 47,000 UAW workers that cost the firm about $2 billion. GM alleges the automaker paid "millions of dollars" in bribes that resulted in numerous UAW concessions and helped it implement labor agreements.
"We are confident that the terms of those contracts were not affected by Iacobelli's misconduct, nor that of any UAW officials involved in the misuse of Joint Program funds at FCA", the statement said. That said, the fact that these issues can cause doubt about the contracts is regrettable.
The suit targets Fiat Chrysler and former company officials who pleaded guilty and were sentenced to prison for their roles in the corruption scandal, including Al Iacobelli, who had served as vice president and lead UAW negotiator. GM said that probe, coupled with its own investigation, resulted in the lawsuit.
Glidden says FCA was able to reduce its labor costs in the 2009, 2011 and 2015 contracts with the union. Intense talks with Fiat Chrysler began Monday, with the possibility of another strike possible due in part to union members' distrust of UAW leadership.
Pearson is facing criminal charges while Jones has not been charged but federal agents raided his suburban Detroit home in August.
GM alleges Marchionne, who died past year, and the former company officials corrupted the collective bargaining process between the UAW and Detroit's three automakers in 2009, 2011 and 2015. Marchionne died in 2018.
Glidden alleged that Fiat Chrysler CEO Sergio Marchionne, who died past year, was a "central figure" in the conspiracy, which was created to put GM at a cost disadvantage to FCA.
One of the Big Three Detroit automakers is accusing another in a wide-reaching corruption probe involving the United Auto Workers (UAW).
Acting UAW president Rory Gamble announced a series of ethics reforms in the weeks after Jones's leave was announced, vowing to make the union's operations more transparent and ethical.
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