General Motors and Fiat Chrysler to Do "Battle" in Court

General Motors and Fiat Chrysler to Do "Battle" in Court

Nowadays, racketeering is not just solely associated with the Mafia and other organized crimes in the streets. Nowadays, becoming a victim of a "racket" can also happen with automotive giants.

Take the case of General Motors (GM). The company has recently filed a lawsuit against Fiat-Chrysler Automobiles (FCA) accusing them of bribing union officials to gain better contract terms over the union.

According to GM, FCA has been bribing the United Auto Workers (UAW) for more than ten years. UAW is considered one of the biggest and most diverse unions in North America, has more than 400,000 active members in the United States, Canada, and Puerto Rico.

According to the lawsuit, GM has accused former Fiat Chrysler CEO Sergio Marchionne of permitting bribes to union officials to establish unintended work practices and wage costs.

“Marchionne was a central figure in the conceiving, executing and sponsoring of the fraudulent activity,” according to GM General Counsel Craig Glidden said.

GM reported that the FCA has extorted the bargaining process in 2009, 2011, and 2015 in order for the Italian car manufacturer to strengthen a "labor cost advantage" over GM.

Currently, Fiat Chrysler has an $8 hourly labor cost advantage over General Motors.

“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,” said Craig Glidden, GM executive vice president and general counsel in a statement.

"FCA’s manipulation of the collective bargaining process resulted in unfair labor costs and operational advantages, causing harm to GM," its lawyers said in a statement.

Meanwhile, Fiat called the move by GM as 'meritless', and even went so far as to accuse GM of filing the lawsuit as a means to abandon Fiat's planned merger with Peugeot car maker, PSA Groupe.

"We are astonished by this filing, both its content and its timing," FCA said in a 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."

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