GM: FCA-UAW bribery scheme 'targeted and directly harmed' automaker
Fiat Chrysler Automobiles NV executives accused of bribing United Auto Workers officials "targeted" General Motors Co. in an attempt to do it harm, the Detroit automaker claimed Monday in its rebuttal to FCA's request for the civil racketeering case against it be dismissed.
In November, GM filed an unprecedented civil racketeering lawsuit against the Italian American automaker. GM argued bribes offered by FCA executives to union officials corrupted three rounds of bargaining and cost the Detroit automaker "billions." Fiat Chrysler has called the allegations "meritless," and in January requested the suit be dismissed for not meeting RICO's requirement that the plaintiff be directly harmed by wrongdoing.
"Defendants assert that GM is suing for lost 'market share,' is a 'bystander,' has only been '“derivative[ly]" harmed, and that GM was only the 'third in line' victim of FCA’s bribery scheme (behind UAW members and the IRS)," GM attorneys Hariklia Karis and Jeffrey Lamb wrote. "None of these characterizations is remotely accurate. GM’s detailed allegations establish that FCA’s bribery scheme targeted and directly harmed GM for years by imposing higher costs on GM in at least the areas of workforce composition, manufacturing costs, and prescription drug costs."
The crosstown battle comes amid the continuing years-long federal investigation into UAW corruption that has convicted 13 union and FCA officials and charged a former UAW president. Payoffs from Fiat Chrysler executives to UAW officials, according to federal prosecutors, began within days of Chrysler Group LLC emerging in 2009 from bankruptcy with $12.5 billion in taxpayer money under the control of a foreign company, Italy's Fiat SpA.
GM says FCA's former CEO, the late Sergio Marchionne, schemed with UAW officials in an attempt to take over and merge with the Detroit automaker. FCA corrupted negotiations in 2009, 2011 and 2015, according to GM, to inflict high, unanticipated labor costs on GM and force the companies to combine.
But Fiat Chrysler says UAW members and the Internal Revenue Services would be the entities directly hurt by the bribery scheme, not GM. It also asserted it did not have ownership of the union to control it for its bidding. But GM asserts that is not necessary.
"Here, FCA successfully bribed top UAW leaders to influence critical and long-term binding decisions of the UAW," Karis and Lamb wrote. "No more is required."
Finally, Fiat Chrysler also claimed GM does not meet the four-year statute of limitations because it would have known it was harmed before UAW members ratified the 2015 contract. GM, however, states it could not have discovered its injuries to the scheme before January 2018 when former FCA labor negotiator Alphons "Iacobelli revealed Defendants' scheme to corrupt the collective bargaining process."
Fiat Chrysler in a statement said it will continue to defend itself and pursue all available remedies to GM's lawsuit.
"As we have said from the date this lawsuit was filed, it is meritless," according to the statement. "It will not distract FCA from its mission to provide its customers with outstanding and exciting cars, trucks and SUVs and the continued implementation of its long-term strategy to create further significant value for all its stakeholders. This includes the landmark agreement to combine with Groupe PSA to create the world's third largest global automaker by revenues."
GM has not said how much it is seeking in damages, which could be tripled under RICO. Some analysts have estimated if GM is successful, payouts could be as high as $15 billion.
Fiat Chrysler secured a minor victory last month when U.S. District Judge Paul Borman ruled the automaker could wait until after the court determines whether to dismiss the case before complying with GM's document requests.