Tuesday, 11 August 2020 18:11

Fiat Chrysler Blasts GM's Attempt to Revive Racketeering Lawsuit, Calls It 'Despicable'

Written by Eric D. Lawrence, Detroit Free Press


Fiat Chrysler Automobiles pushed back Aug. 10 against General Motors' attempt to revive its racketeering lawsuit, two days after FCA's former lead labor negotiator, convicted in the UAW corruption scandal, compared GM's tactics to those of disgraced Sen. Joe McCarthy's anti-communist witch hunts.  

The legal drama pitting the two automakers against one another is now in its ninth month despite U.S. District Court Judge Paul Borman's dismissal of the case in July. Perhaps instructive was a new order Aug. 10 from Borman noting that he is not seeking another reply from GM.


GM had ratcheted up the allegations last week, saying it had found new evidence of offshore accounts in the Cayman Islands, Switzerland, Luxembourg and other countries designed to fuel a bribery scheme to harm GM and claiming that ex-GM board member Joe Ashton, who is awaiting sentencing in the federal probe, was actually a paid mole.


GM's original lawsuit, filed in November, claimed FCA corrupted the bargaining process, costing GM billions of dollars, in an effort to hurt GM and force a merger, which never happened, of the two companies.


Alphons Iacobelli, the former labor negotiator who later went to work for GM and made the McCarthy comparison, and other FCA officials caught up in the corruption probe are defendants, too, but GM also referenced others, including Ashton, who was a former UAW vice president, and two ex-UAW presidents.


FCA, not surprisingly, said essentially that GM should not get another bite at the apple. And in keeping with the intrigue offered in GM's effort to have its case reinstated, FCA offered its own bit of color and said GM has simply gone too far. 


"GM’s proposed amended complaint reads like a script from a third-rate spy movie, full of preposterous allegations that FCA paid not one, but two, 'mole(s)' to infiltrate GM' and 'funnel inside information to (FCA)' using money 'stashed' in a 'broad network' of 'secret overseas (bank) accounts.' ... None of that is true. That GM has extended its attacks to individual FCA officers and employees, making wild allegations against them without a shred of factual support, is despicable," FCA said in its response Aug. 10.


The company followed up with a statement that "GM’s proposed amended complaint is the latest example of the lengths it is prepared to go to, attacking a competitor that is winning in the marketplace with yet more baseless accusations. As we have said from the date this lawsuit was filed, it is meritless and we will continue to vigorously defend ourselves."


FCA also highlighted the stakes for both companies at a time when the automotive industry is under tremendous strain and FCA is working toward a merger that would make it part of an entity larger than GM.


"GM's attempts to tarnish FCA’s reputation and that of individual FCA officers and employees will not distract us from our mission of providing customers with outstanding and exciting cars, trucks and SUVs or from completing our landmark combination with [PSA Group,]" FCA said in a statement provided by FCA spokesman Jeff Bennett.


GM said it stands behind its pleading.

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