FCA Denies New Allegations Of Espionage And Bribery From GM

Last month, a federal judge dismissed a racketeering complaint brought by General Motors against Fiat Chrysler Automobiles. GM is trying to restart this trial with new evidence, but the FCA continues to deny allegations of corporate espionage and corruption, according to a new report from Automotive News.

The previous lawsuit claimed that the FCA bribed officials from the United Auto Workers union during contract negotiations to cut the automaker’s labor costs, which would also hurt GM. Why? To force a merger between the two automakers, according to the complaint. Former FCA CEO Sergio Marchionne had insisted on finding a partner for his company.

However, US District Court Judge Paul Borman dismissed the case in July “with prejudice”, calling it “a waste of time and resources”. The judge said the bribes affected workers’ pay, although “GM suffered only as indirect competitive harm,” according to Detroit News. GM claimed to have lost billions because of the actions of the FCA.

In early August, GM asked the court to reactivate its trial citing new evidence. New GM allegations name former UAW executives, citing one as a “paid mole.” GM also alleges that FCA used offshore bank accounts in Switzerland, Cayman Islands, Singapore, and more in its system, which FCA denies.

According to Automotive NewsThe FCA called GM’s amended complaint “full of absurd allegations.” The lawsuit and the new charges come as FCA and the PSA Group continue to finalize their merger, which is expected to be completed in early 2021, creating the world’s fourth-largest automaker. FCA said GM was trying to damage its reputation as it prepared for the merger while also comparing the new allegations as a “third-rate spy movie.”

It is not known whether the new evidence from GM is strong enough to establish the case. However, if so, expect the FCA to vehemently deny the allegations as GM prepares new evidence for another courtroom confrontation.

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