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General Motors Takes Fiat Chrysler to Court Over Union Bribes

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Mary Barra GM UAW

The automotive industry, especially the big three American manufacturers, has deep ties to the United Automobile Workers union. Negotiating with them for pay and benefits that benefit both the company and manufacturing employees is a constant part of their business. Last week, General Motors sued Fiat Chrysler Automobiles, accusing them of bribing UAW officials for preferential treatment over competitors.

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In total, General Motors is accusing FCA of the three following infractions:

FCA was the clear sponsor of pervasive wrongdoing, paying millions of dollars in bribes to obtain benefits, concessions, and advantages in the negotiation, implementation, and administration of labor agreements over time.

FCA corrupted the implementation of the 2009 collective bargaining agreement. It also corrupted the negotiation, implementation, and administration of the 2011 and 2015 agreements.

FCA’s manipulation of the collective bargaining process resulted in unfair labor costs and operational advantages, causing harm to GM.

General Motors Press Release

While GM aims the allegations squarely at FCA as a whole, National Public Radio reports that lawsuit paperwork singles out former FCA CEO Sergio Marchionne. He supposedly knew about the bribes and shady business practices and possibly approved them himself. Not only did it help his company save money and come out on top when working with the UAW, but he wanted to use higher labor costs to weaken GM and make it more amenable to a FCA-GM merger.

Not to speak ill of the dead, as Marchionne died in 2018, but anyone who reported on him in the past would not be surprised by that last part at all. He was notorious for always trying to merge FCA with any automaker, and it seems like he was trying to make his company more appealing on the bargaining table.

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General Motors credits the U.S. Attorney’s Office of the Eastern District of Michigan investigation into ongoing corruption at the top levels of the UAW for uncovering the bribery. The larger deep-dive into UAW financial records by law enforcement has also confirmed that executives in the union embezzled more than $1.5 million dollars. President Gary Jones resigned on Wednesday around the same time that the UAW’s International Executive Board voted in an emergency session to remove him. Leaders called the meeting after GM filed its lawsuit. Another alleged co-conspirator, Region 5 Director Vance Pearson, was also forced from his post.

This lawsuit could have lasting effects on FCA and all UAW-affiliated employees. We’ll keep a close eye on any major developments.

News Sources: NPR, The Detroit Free Press