Well, this is weird: GM suing FCA for “corrupting labor talks”
General Motors (GM) has just finished up a surprisingly long strike, largely by abruptly caving in on the United Auto Workers (UAW)’s demands for more fair treatment of temporary and new workers and preservation of health benefits. The UAW lost out on preserving some of the plants they had sought to protect from closure.
Now, GM is suing Fiat Chrysler (FCA), claiming that the company’s late CEO, Sergio Marchionne, conspired with the UAW to try to take over the larger company. Some may have noticed that this effort consisted largely of trying to set up meetings and talking to the press about how nice a merger would be. GM responded by refusing to talk to FCA, and the merger died.
The lawsuit claims that FCA was “the clear sponsor of pervasive wrongdoing, paying millions of dollars in bribes to obtain benefits, concessions and advantages in the negotiation, implementation and administration of labor agreements over time.” In short, GM felt that FCA sabotaged the company by making the union do its job.
GM’s paranoid-sounding lawsuit claims that FCA would have made GM negotiate poor terms with the UAW, then taken over GM when the latter did poorly. The idea sounds fairly farcical, since in theory the UAW would fight for the best possible terms regardless of whether FCA bribed its leaders. Otherwise, there would not be much point to the union.
There is little doubt but that there was corruption within the UAW, with certain negotiators taking large cash payments from FCA. On the other hand, GM has also been implicated in the same scandal, apparently doing the same things, so whatever was going on seems to have been happening at both companies.
FCA’s official reply: “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.”
GM’s lawsuit comes as the UAW and FCA wrap up their negotiations, and as FCA and PSA are planning a merger. GM is seeking hefty damages under U.S. racketeering law.
Clark Westfield grew up fixing up and driving past-their-prime American cars, including various GM and Mopar V8s. He has ghostwritten auto news for the last few years, lives in Farmingdale, New York, and can be reached at +1.516-531-4021.