Fiat Chrysler asks US court to toss out GM racketeering claims: filing

Fiat Chrysler asks US court to toss out GM racketeering claims: filing

Fiat Chrysler Automobiles NV late on Friday urged a U.S. District Court to throw out General Motors Co's suit accusing Fiat Chrysler of racketeering and bribing officials of the United Auto Workers union to put GM at a multi-billion dollar labor cost disadvantage.

Fiat Chrysler Automobiles (FCA) headquarters are seen in Turin
FILE PHOTO: Fiat Chrysler Automobiles (FCA) headquarters are seen in Turin, Italy, July 21, 2018. REUTERS/Massimo Pinca

REUTERS: Fiat Chrysler Automobiles NV late on Friday urged a U.S. District Court to throw out General Motors Co's suit accusing Fiat Chrysler of racketeering and bribing officials of the United Auto Workers union to put GM at a multi-billion dollar labor cost disadvantage.

Fiat Chrysler's motion to dismiss GM's civil racketeering suit was expected. The company has said GM's suit is baseless and aimed at disrupting the Italian-American automaker's proposed merger with France's Peugeot SA .

GM's general counsel, Craig Glidden, told reporters in November the FCA-PSA merger had nothing to do with GM's legal action.

GM had no immediate comment on Fiat Chrysler's arguments, which were filed Friday evening with the U.S. District Court in Detroit.

GM sued Fiat Chrysler in November charging its rival with bribing officials of the United Auto Workers union in order to gain advantages in 2009 and 2015 labor contracts and have the UAW withhold those terms from GM. Fiat Chrysler's now deceased Chief Executive Sergio Marchionne sat "at the center" of the schemes, GM charged in its suit.

In its response Friday, Fiat Chrysler rejected GM's claim that Marchionne tried to force a merger between GM and FCA by agreeing to labor contracts that favored the UAW. GM failed to show "why Mr. Marchionne would want to saddle FCA and GM with unfavorable CBAs (collective bargaining agreements) if his ultimate goal was to run the merged company (presumably on a profitable basis)."

GM's accusations relied in part on revelations from a continuing federal criminal investigation of corruption within the UAW. That investigation began at Fiat Chrysler but has since spread to past and present UAW officials at GM.

In its motion Friday, Fiat Chrysler said GM's suit was "fatally flawed" for several reasons.

The suit was filed after a four-year statute of limitations had expired, Fiat Chrysler argued. GM is not a direct victim of wrongdoing by FCA executives or UAW officials related to labor contracts, and so cannot bring a RICO action, FCA argued in its motion.

The UAW is such a large organization, "the notion that FCA seized control of the UAW by virtue of the alleged prohibited payments is implausible on its face," the FCA brief stated.

Further, Fiat Chrysler argued that GM's allegations about corrupt contract negotiations should be heard by the National Labor Relations Board, not by a federal court.

(Reporting by Joe White; Editing by Sandra Maler and Diane Craft)

Source: Reuters

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