Here Are Two Good Reasons Why GM Sued Its Detroit Rival

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According to Mary Barra, it was a carefully made decision.

General Motors (GM) lawsuit against Fiat Chrysler Automotive (FCA) that alleges racketeering through fraudulent bargaining with the Union of Auto Workers (UAW) shocked just about everyone in the business. GM has only just secured a deal with UAW after the union initiated strike action strong enough to delay production of the new Corvette.

The timing of the lawsuit has raised more than a few eyebrows as it arrived during preparations for FCA to start its merger with Peugeot's controlling company PSA to create the fourth-largest auto group in the world. On top of that, PSA owns the European Opel and Vauxhall brands after buying them from GM some years ago, meaning FCA would now control them.

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John F. Martin for General Motors
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According to Bara, the legal action GM has started is down to years of bribery and corruption that resulted in a competitive advantage for FCA in terms of labor contracts dating back to 2009. FCA and the UAW both deny that any negotiations were corrupted.

Despite the fact that the allegations are going to be incredibly hard to prove, Barra told Motor Trend that "It was a decision that was carefully made." She brought up a tactic commonly used by unions called pattern bargaining, where a general agreement is reached with one party, and then expected to be matched by other parties in negotiations and then refined to suit each organization.

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Miranda Pederson for General Motors
Miranda Pederson for General Motors

GM aims to demonstrate that FCA "corrupted the implementation" of the UAW's collective bargaining agreements in 2009. "There's a difference between pattern bargaining and then pattern bargaining that's based on briberies and corruption," said GM spokesperson, Tony Cervone.

"Give General Motors a level playing field and we'll compete and we'll win. When we find out actions were taken that caused that not to happen, we felt in the best interest of all of our stakeholders, our employees, our dealers, our suppliers and our shareholders, we felt that we had a responsibility to take action," Barra told Motor Trend. She also declared that selling Opel and Vauxhall was a "win, win, win," situation for everyone concerned, implying that's not a consideration in the matter.

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