DETROIT – Fiat Chrysler Automobiles wants a judge to throw out a racketeering lawsuit General Motors filed against the Italian-American automaker last year.
In a motion to dismiss the suit filed Friday in federal court in Detroit, FCA pushes back against GM's claims that FCA purposefully cost GM billions of dollars by allegedly corrupting the bargaining process.
The original lawsuit was noteworthy in part because it showcased a potentially high stakes corporate fight between two global automakers in an unusually public way.
FCA said GM's arguments fail to meet the standard for a racketeering claim, noting that GM was trying to "piggyback off indictments and plea agreements" brought to light as part of the wide-ranging federal corruption probe.
That investigation, which initially focused on misuse of blue collar worker training funds, was first revealed in 2017 with indictments of FCA's one-time lead labor negotiator Alphons Iacobelli and Monica Morgan, the widow of the late General Holiefield, who had been a UAW vice president.
In the filing Friday, FCA called out GM's theory in its suit that FCA sought to force a merger between the two companies by making concessions to the UAW during 2015 contract bargaining – "which harmed FCA itself – knowing that the UAW would extract those same concessions from GM through so-called 'pattern bargaining.'"
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The FCA filing said GM's theory "defies economic logic" and would not have depended on so-called prohibited payments, which FCA denied directing or approving.
FCA also says that GM's racketeering claims relate to actions that happened outside the four-year statute of limitations, that a corporation can't conspire with its own employees and that the allegations at the heart of the suit are related to unfair labor practice claims and would need to be adjudicated by the National Labor Relations Board.
"As we have said from the beginning, this lawsuit is meritless and malicious and 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," FCA said in a statement.
GM fired back with its own email:
"Today’s motion is no surprise. It is a predictable tactic taken by the defendants, and we look forward to responding in court. We are confident in the legal and factual underpinnings of our case, which have already been documented in part through the guilty pleas and admissions of FCA executives made in connection with the government's ongoing criminal investigation."
The GM suit, filed in November, came as FCA had just moved center stage in labor negotiations with the UAW, which had already wrapped up talks with both GM and Ford. FCA contended that GM's real reasons for filing suit were to not only disrupt those talks but also to interfere in FCA's proposed merger with Peugeot-maker PSA Groupe. That merger would create the world's fourth-largest automaker, moving the former Chrysler Corp. into an entity larger than GM.
GM claimed that FCA, under the leadership of the late Sergio Marchionne, was involved in a decadelong attempt to corrupt UAW bargaining, effectively costing it billions of dollars in extra labor costs. GM also called out former UAW President Dennis Williams, whom the suit described as a longtime friend of Marchionne and merger "wingman."
The lawsuit highlights revelations from the federal corruption investigation, which has led to charges against 13 and convictions of 11 now former union and FCA officials.
Top union leaders, including both Williams and his successor at the UAW, Gary Jones, have been implicated, although not charged, as unnamed union officials, accused of being part of a group that embezzled more than $1.5 million in union funds.
The investigation, which is continuing, uncovered kickback schemes and self-dealing, involving swanky dinners, travel, cigars and more.
Contact Eric D. Lawrence: firstname.lastname@example.org or (313) 223-4272. Follow him on Twitter: @_ericdlawrence.
This article originally appeared on Detroit Free Press: GM racketeering lawsuit: Fiat Chrysler asks judge to dismiss