A federal lawsuit has been filed by General Motors (GM) against Fiat Chrysler, claiming that it was affected by Fiat's corrupt labor relations with the United Auto Workers (UAW) union.
GM filed a federal racketeering lawsuit on Wednesday versus Fiat Chrysler, claiming that the wrongdoings of former Fiat Chrysler executives with the UAW hurt the company. The said executives have pleaded guilty in an ongoing federal investigation into the UAW.
GM general counsel Craig Glidden said: "This lawsuit is intended to hold Fiat Chrysler accountable for the harm its actions have caused our company and to ensure a level playing field going forward."
The suit alleges that Fiat Chrysler bribed UAW officials over the last decade with "millions of dollars in prohibited payments and things of value" in order to secure a better labor deal from the union than GM was able to obtain.
It stated: "While a full accounting of the damage inflicted on GM is unknowable at this time...GM estimates that it has incurred massive monetary damage in the form of higher costs that it seeks in relief." It claimed that GM lost "billions" due to the union deal of 2015 at Fiat Chrysler.
The timing of the lawsuit filing coincides with current contract negotiations between the UAW and Fiat Chrysler as well as a proposed merger between Fiat Chrysler and French automaker PSA Group, which could create a combined automaker larger than GM.
In a statement, Fiat Chrysler said: "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."
The Center for Automotive Research estimated that the difference in mix of employee pay gave Fiat Chrysler a cost advantage of $8 to $10 an hour over GM.
