General Motors (GM) is suing Fiat Chrysler Automobiles (FCA) for alleged racketeering, claiming top executives bribed union officials over a long period in order to manipulate wages and working practices. The news coincides with FCA’s planned 50-50 merger with the PSA Group, leading the firm to suggest GM’s lawsuit is an attempt to disrupt the deal.
According to GM’s claims, FCA corrupted the negotiations between GM and the United Auto Workers (UAW) union using bribes, which resulted in decisions costing GM billions of dollars. These included higher wages for GM employees and fewer temporary workers than FCA was permitted and the US giant said it will seek “substantial damages”. GM also claims ex-FCA boss Sergio Marchionne was ‘a central figure in the conceiving, executing and sponsoring of the fraudulent activity’. Marchionne passed away in 2018.
FCA responded in a statement saying: “We are astonished by this filing – both its content and its timing. We can only assume this was intended to disrupt our proposed merger with PSA, as well as our ongoing negotiations with the UAW. We intend to vigorously defend against this meritless lawsuit and pursue all legal remedies in response to it.”
Negotiations for a four-year bargaining agreement are currently underway between FCA and the UAW, alongside work to complete the planned merger with PSA Group. GM’s Graig Glidden reportedly said “Our sole focus is FCA”, continuing “This lawsuit is intended to hold FCA accountable for the harm its actions have caused our company and to ensure a level playing field going forward.”