Fiat Chrysler is expected to ask a federal judge to dismiss lawsuit filed by General Motors last month.
Fiat Chrysler Automobiles N.V. appears to be preparing to ask a federal judge in Detroit to dismiss the blockbuster lawsuit General Motors filed against FCA just before Thanksgiving.
A review of court papers in the case show that Judge Paul Borman ordered FCA to respond to GM’s original complaint before late January. In return, GM lawyers will have until March 9 “to oppose any motion(s) by FCA to dismiss the Complaint; and FCA shall have until and including April 8, 2020, to file any replies in support of any motion(s) to dismiss the Complaint.
“No prior extensions of the time to respond to the complaint have been sought by FCA,” according the timeline outlined in the court documents to which both sides appear have agreed as part of the ongoing lawsuit.
(General Motors sues Fiat Chrysler, claims bribery of UAW cost it billions)
Borman is likely to deliver an opinion during the summer on whether or not the lawsuit should proceed.
GM alleges in a lawsuit that Fiat Chrysler cost the company billions of dollars, gaining an unfair competitive advantage by bribing UAW officials.
When GM filed the lawsuit, FCA said, “We are astonished by this filing, both its content and its timing,” FCA had said in a statement earlier, adding it intended to mount a vigorous defense.
GM filed a federal racketeering lawsuit against FCA executives who have pled guilty in an ongoing federal corruption probe. The lawsuit, which is demanding substantial but unspecified damages, exposes a multi-year pattern of corruption that FCA used to undermine the integrity of the collective bargaining with the United Auto Workers, putting GM at a competitive disadvantage.
At the core of this lawsuit are clear admissions of wrongdoing made by former FCA executives revealed through the continuing criminal investigation by the U.S. Attorney’s Office in the Eastern District of Michigan, according to GM’s lawsuit.
“This lawsuit is intended to hold FCA accountable for the harm its actions have caused our company and to ensure a level playing field going forward,” said Craig Glidden, GM executive vice president and general counsel.
GM alleges that former Fiat Chrysler CEO Sergio Marchionne, now deceased, played a crucial role in the bribery scheme that ultimately harmed General Motors.
(FCA hit with series of class-action lawsuits over bribery charges)
FCA was the sponsor of pervasive wrongdoing, using 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, GM claimed in its complaint.
Federal prosecutors have said Alphons Iacobelli, former FCA vice president of labor relations, diverted thousands of dollars from joint UAW-FCA funds for personal use of himself and a select group of union officials led by the late General Holiefield, a former UAW vice president.
GM’s lawsuit also noted that Iacobelli reported directly to former FCA CEO Sergio Marchionne, who died in July 2018. FCA’s manipulation of the collective bargaining process resulted in unfair labor costs and operational advantages, causing harm to GM, the lawsuit said.
Alphons Iacobelli, right, was previously sentenced to 5.5 years in prison for his role in the FCA-UAW training fund scandal.
GM filed the lawsuit as the federal probe into corruption inside the UAW has continued to pick up momentum. Seven different UAW officer and officials have pled guilty to federal crimes and two other officials have been indicted even as the investigation continues to target other union officers, including two of the union’s past presidents, who have been accused have enjoying a prolonged winter vacation in Southern California with the union money.
(Former FCA executive gets 5.5 years in prison)
The UAW’s president, Rory Gamble, has promised to end the corruption and has tightened up access to union funds. Nonetheless, the union still faces the possibility of a union take over as the federal investigators continue their probe in many cases with the assistance of union members and former UAW officials.