The charge: racketeering.
The automotive industry is highly competitive, and it's not unusual to see one automaker level accusations against another. Sometimes they even end up in court. But the disputes typically center around copyrights. This, however, is a very different story.
General Motors announced last night that it's filing a lawsuit in federal court against Fiat Chrysler Automobiles, producer of such models as the Dodge Challenger, Ram 1500, and Jeep Grand Cherokee. The charge: racketeering. That's right, GM is going after its cross-town rival under the same Racketeer Influenced and Corrupt Organizations (RICO) Act that was legislated to go after the mafia.
In the lawsuit, GM (which produces such vehicles as the Chevrolet Corvette, Buick Encore, and GMC Sierra) alleges that FCA bribed union officials in order to get better terms under collective bargaining with their employees, thereby giving FCA an unfair advantage and causing GM "substantial damages" as a result.
"This lawsuit is intended to hold FCA accountable for the harm its actions have caused our company and to ensure a level playing field going forward," said GM's general counsel Craig Glidden (pictured above). To substantiate its claims, GM cites "clear admissions of wrongdoing made by former FCA executives revealed through the continuing criminal investigation by the US Attorney's Office in the Eastern District of Michigan."
"We are astonished by this filing, both its content and its timing," FCA stated in response to the lawsuit. "We intend to vigorously defend against this meritless lawsuit and pursue all legal remedies in response to it." The timing to which FCA refers is the impending merger with PSA, the French group that controls the Peugeot and Citroen brands as well as the bulk of GM's former European operations (including Opel and Vauxhall).
GM has not, however, filed suit against the UAW, with which it alleges FCA conspired to distort labor costs. The union recently concluded heated negotiations with GM and is now undertaking the same process with FCA.
In between the two, though, UAW president Gary Jones stepped down amidst rising accounts of corruption. While GM has not filed suit against Jones or the UAW, the union itself is taking action against its former president as well as regional director Vance Pearson to remove them not only from office but from membership in the union altogether.
"We are committed at the UAW to take all necessary steps including continuing to implement ethics reforms and greater financial controls to prevent these type of charges from ever happening again," said acting president Rory Gamble.