DETROIT — General Motors' racketeering lawsuit alleges that Sergio Marchionne, the late Fiat Chrysler Automobiles CEO, wanted to hurt GM in an effort to force a merger. His tool of choice was the 2015 contract talks.
Marchionne, the suit says, "formally solicited GM for a merger" in the spring of 2015 and was rejected. From there, the suit alleges that Marchionne orchestrated a negotiation of the collective bargaining agreement that was "designed, through the power of pattern bargaining, to cost GM billions."
This was done, according to the suit, with the "purchased support of certain former UAW officials including then-President Dennis Williams."
In 2015, "with cooperation of UAW leadership purchased through bribes," the lawsuit says Marchionne "schemed to use the collective bargaining process to harm GM by becoming the lead in negotiations and attempting to force a merger of the companies."
Those 2015 contract talks took place as federal investigators were looking into past FCA-UAW agreements and other potential misconduct. Williams and Marchionne, the suit says, were aware of the investigation.
The suit alleges that with a "self-described 'rich' FCA-UAW labor contract, Williams and certain corrupt UAW leaders could seek to convince government investigators that they had obtained significant FCA concessions, while Marchionne could impose unanticipated costs on GM in order to force a merger."
GM claims in the suit that it was directly damaged "as a result of the pattern of racketeering."
Filing the lawsuit against FCA wasn’t “a decision that we made lightly,” GM CEO Mary Barra said at the Barclays 2019 Global Automotive Conference Thursday. “It was something we very, very carefully considered.”
There wasn’t a “level playing field” throughout labor contract negotiations, she said. “We had to take action.”
Craig Glidden, GM's general counsel, said Wednesday: "We are preparing for trial. We are preparing to take this case to verdict. That is our path."
FCA said it was astonished by the lawsuit and the timing of the filing, which occurs as FCA attempts to finalize a new contract with the union and merge with the PSA Group.
Here are other findings in GM's lawsuit: