General Motors filed an explosive federal racketeering lawsuit on Wednesday, alleging crosstown rival Fiat Chrysler Automobiles spent years working with the United Automobile Workers labor union to undermine GM and cause “substantial” damages.
The complaint names former FCA head Sergio Marchionne, who passed away suddenly last year after complications from surgery, as well as several other former FCA executives whose testimony in the ongoing UAW corruption probe led to the revelations.
“We have alleged in the complaint that Mr. Marchionne is responsible for conceiving, executing and sponsoring the alleged wrongdoing,” said Craig Glidden, GM’s executive vice president and general counsel. “We plan to hold FCA responsible.”
The lawsuit alleges, among other things, that FCA corrupted collective bargaining agreements between the giant automakers between 2009 and 2015. That outcome meant GM spent almost a decade operating at a disadvantage, since it was forced to pay higher labor costs, Glidden said.
“By 2015, FCA slashed its labor costs to $47 — in the range of non-unionized foreign automakers operating in the U.S. — and $8 less on average per hour than GM ($55),” alleges the lawsuit, further claiming that “FCA directed key UAW officials to deny similar labor advantages to GM, inflicting significant additional costs on GM.”
The corruption probe into the UAW has been underway for four years, but broke into the headlines when 65-year-old Virdell King was indicted in August 2017. She was accused by the the Department of Justice of taking part in a multiyear conspiracy for UAW officials to accept money and items of value from FCA between 2011 and 2015.
Over the last two years, an array of union officials, as well as some executives from Fiat Chrysler Automobiles and General Motors, have been charged with a variety of crimes involving kickbacks, fraud and money laundering.