Detroit Automakers' Nasty Court Battle Comes To An End

Industry News / 5 Comments

A judge has spoken. Your move, GM.

This all dates back to 2019 when General Motors decided to sue cross-town rival Fiat Chrysler, which has since merged with the PSA Group to form Stellantis. This wasn't an ordinary lawsuit involving something like copyright infringement. GM accused FCA of fraud and unfair competition for allegedly bribing UAW officials over several years as part of a bribery scheme to damage GM by increasing labor costs during contract negotiations with the union.

If the alleged plan worked, then GM could have been forced to merge with FCA for financial reasons. FCA's late CEO Sergio Marchionne long desired a merger with the fellow Detroit automaker. GM consistently refused his offers. A few days ago, a Michigan judge dismissed GM's lawsuit for "failing to adequately demonstrate that FCA caused it any actual, legally recognized harm through its bribery scheme."


Via Reuters, the judge further noted that GM's allegations against FCA went back to 2009 and that "even the most enthralling drama must eventually reach a conclusion. This one is no exception."

GM was seeking potentially billions of dollars in damages. This isn't the first time a judge has dismissed GM's case. In July 2020, another judge rejected a federal racketeering lawsuit filed by GM that also made bribery claims against FCA. GM has since appealed that decision which remains pending.

GM and Stellantis are both investing heavily in EVs, like the GMC Hummer EV and upcoming all-electric Ram 1500. The latter very much wants to put this case behind it once and for all in order to focus on the future.


"As we have said from the date the original lawsuit was filed, it is meritless. The courts once again agreed and dismissed GM's complaint," said a Stellantis spokesperson. GM "respectfully disagrees with the ruling" and is debating its legal options. FCA, however, has a recent history of union-related corruption.

It was convicted last summer of violating the Labor Management Relations Act by making $3.5 million in illegal payments to union officials from 2009 to 2016. Two former UAW presidents were convicted and sent to prison. FCA was also ordered to pay a $30 million fine. It's understandable why GM decided to pursue legal action but it couldn't meet the burden of proof.

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Source Credits: Reuters

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