Two major U.S. automakers are locked in legal warfare Wednesday, as General Motors sued Fiat Chrysler Automobiles, accusing the company and three of its former executives of corruption during labor talks with the United Auto Workers union. In the initial complaint, GM says it “seeks recourse against FCA Group and its officials responsible for this long-running bribery scheme,” referring to an ongoing federal investigation into corruption by FCA and union leaders.
Apart from the company itself, GM’s lawsuit names former executives Alphons Iacobelli, Jerome Durden and Michael Brown as defendants. However, the company did not name the UAW in Wednesday’s filing.
As part of the 95-page document, GM says FCA and its executives “have engaged in a classic pattern of racketeering for the better part of a decade, committing multiple violations of the Labor Management Relations Act of 1947 (“Taft-Hartley Act”), wire fraud, and mail fraud.” The company then said it seeks to recover damages to the tune of “billions of dollars” — money it insisted FCA cost them by undermining the collective bargaining process.
For its part, FCA filed a brief, yet pointed response to GM’s lawsuit:
” 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.”
Alphons Iacobelli had been VP of employee relations at FCA from 2008 to 2015. In that role, he was responsible for handling labor relations with the UAW as well as any disputes. Jerome Durden was a financial analyst at Chrysler and FCA’s corporate accounting department since 1985. Michael Brown was employed as FCA’s Director of Employee Relations from 2009 to 2016. All three pleaded guilty to criminal charges and received prison sentences in 2018.
GM’s lawsuit also implicates former CEO Sergio Marchionne, who died in 2018. Of him, the filing said, “With Marchionne as the lead, FCA schemed that it could effectively take over GM through a marger (code-named “Operation Cylinder”), have Marchionne remain CEO of the combined companies, and oversee the largest auto company in the world.” To that end, the complaint alleges he authorized bribing UAW leaders, conspiring with the union to stage a takeover in March 2015. GM rejected Marchionne’s merger offer the following month.
General Motors said in the lawsuit that part of its goal is to have future collective bargaining “free of corruption”. In its requests for relief, GM listed damages it suffered under the alleged racketeering as determined at trial, punitive damages against FCA and its former executives, attorney’s fees and any other relief the court deems appropriate.
You can read the lawsuit in its entirety here.