Follow us:
  1. Home
  2. News
  3. Automotive News

GM sues Fiat Chrysler under federal racketeering laws

The unusual complaint charges FCA with trying to force GM into a merger

Photo (c) RiverNorthPhotography - Getty Images
It seems the car companies negotiating new labor deals have gotten along better with the United Auto Workers (UAW) union than with each other.

General Motors has filed a lawsuit against Fiat Chrysler (FCA) charging its rival with corrupting GM’s contract negotiations. In an extraordinary move, GM filed the complaint under federal racketeering laws, alleging FCA paid millions of dollars in bribes “to obtain benefits, concessions, and advantages in the negotiation, implementation, and administration of labor agreements over time." 

The objective of that alleged action, the suit claims, was to give FCA an advantage by paying lower labor expenses, with the added aim of weakening GM financially. While large corporations are usually reluctant to comment on pending litigation, FCA fired back immediately.

"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.”

FCA still negotiating with the UAW

GM filed its suit as FCA approached the final stages of its negotiations with the UAW on its new contract. FCA and Ford have had relatively smooth negotiations compared to GM, which was idled by a 40-day strike.

The GM suit claims that FCA conspired with UAW leaders to facilitate FCA’s hostile takeover of GM, alleging that the goal has been in place since 2005. The suit claims FCA executives sought to bribe UAW leaders to support the company’s efforts to force a merger with GM.

Currently, FCA is working toward a merger with Groupe PSA, a French automaker that produces Peugeot and other international brands. The merger, announced last month, would create the world’s fourth-largest automaker.

Both brands would increase their international reach since FCA is strong in North and South America and Groupe PSA has a foothold in Europe. When it comes to specific brands, the new auto company will offer FCA’s line-up of Jeep, Chrysler, Dodge, and Ram trucks, along with Maserati, Alfa Romeo, and Fiat.

Quick and easy. Get matched with an Auto Warranty partner.