GM sues Fiat Chrysler claiming UAW bribes cost it billions

General Motors filed a racketeering lawsuit Wednesday against Fiat Chrysler.


GM accused its smaller rival of making bribes over many years to corrupt the bargaining process with the United Auto Workers.


GM said it will seek "substantial damages" as part of the remedy. Although it did not specify an amount, it said the bribes cost it billions of dollars.


In the lawsuit, America's biggest automaker accused Fiat Chrysler, under the leadership of now deceased CEO Sergio Marchionne, of bribing UAW officials into allowing it to pay lower wages than GM, use more temporary workers than GM and employ more lower-paid second-tier workers than GM.


Fiat Chrysler said in a statement it is "astonished by this filing, both its content and its timing" and said it assumes the lawsuit was intended to disrupt the labor negotiations tied to merger talks between it and Peugeot owner PSA.


Union officials from the UAW fired back in a separate statement, saying the fact these issues can cause doubts about the contract is "regrettable" and it stands by the terms previously negotiated with Fiat Chrysler.


The UAW has been the focus of a spreading federal corruption probe that recently forced its president to seek a leave of absence.

The lawsuit comes at a precarious time for Fiat Chrysler, not only is it in aforementioned merger talks - it is also in the midst of negotiating a four-year contract with the UAW.


GM said the lawsuit has nothing to do with the merger or the union and is solely focused on Fiat Chrysler.