DETROIT — General Motors on Monday opposed Fiat Chrysler Automobiles' motion to dismiss its racketeering lawsuit, disputing FCA's claims that GM failed to allege that it was a direct victim and that it filed the suit outside of the statute of limitations.
In a wide-ranging November lawsuit, GM claimed that FCA received an unfair advantage in labor costs by bribing UAW officials during years of contract negotiations that cover workers' wages and benefits. The suit also alleges that Sergio Marchionne, the late FCA CEO, wanted to weaken GM in an effort to force a merger between the two automakers.
Monday's filing is the latest in what promises to be a long, drawn-out case in federal court between the rival Detroit automakers. FCA has promised a vigorous defense.
When GM formally rejected the merger proposal in 2015, Marchionne was the orchestrator in developing a collective bargaining agreement that was designed to cost GM billions, the suit says.
In January, FCA filed a motion to dismiss the suit, citing "fatal flaws" and "hyperbolic assertions" and laid out several reasons the GM allegations should be dismissed.
One of those reasons was that, according to FCA, GM failed to adequately allege that it was a direct victim of the scheme.
In Monday's response, GM reiterated that FCA obtained cost advantages through bribery and ensured that GM incurred higher labor costs. The 2015 labor contract led to "outsized and asymmetrical costs" on GM in an attempt to force a merger.
Three former FCA executives who have pleaded guilty in an ongoing federal corruption probe of top UAW officials are also defendants in the suit, including former labor relations chief Alphons Iacobelli.The government said UAW officials received bribes from FCA beginning in 2009.
“Our brief points out a very large number of factual errors and legal deficiencies in the motions filed by FCA NV, FCA US LLC and Al Iacobelli," GM said in a statement. "We are very confident in our position on these matters and in our RICO case as a whole, and we look forward to the next steps in the case and ultimately preparing for trial.”
FCA also said in its motion that GM's claims under the Racketeer Influenced and Corrupt Organizations Act are outside of the four-year statute of limitations. "GM knew or should have known that its labor costs were higher than FCA's long before November 20, 2015," FCA said.
Some of GM's allegations date to 2009, but GM said the federal government's indictments of UAW officials in July 2017 were key in revealing the scheme. GM knew about a degree of unfair treatment by the UAW, but the automaker didn't know of RICO injuries, it said. Until the feds shed light on UAW corruption, GM "reasonably but incorrectly believed that FCA Group acted in good faith and negotiated agreements with UAW leadership at arm's length," GM said in the November complaint.
“FCA will continue to defend itself vigorously and pursue all available remedies in response to GM's groundless lawsuit,” FCA said in a statement Monday.
Vince Bond Jr. contributed to this report.
