General Motors has asked the U.S. Supreme Court to weigh in after an appeals court dismissed its racketeering case against Fiat Chrysler automobiles, now known as Stellantis. This case is associated with the ongoing corruption scandal that resulted in the conviction of FCA’s former u.s. operating arm and sent former top UAW leaders and executives to prison.
The incident involves the theft and misappropriation of millions of dollars for lavish items including travel, fine dining, and even a Ferrari.
According to GM, FCA and its late legendary CEO Sergio Marchionne rigged the contract negotiations to harm GM by burdening it with disproportionately high labor costs in an effort to compel a merger between the manufacturers. Additionally, GM claimed that even though the merger never materialized, the damage had already been done.
According to a GM filing this month with the Supreme Court, “when the sordid facts of the plan developed, it became increasingly evident that FCA’s corruption had not only benefited FCA but directly hurt GM. Both by assuring that GM would continually be denied concessions the UAW offered to FCA, and by corrupting the pattern-bargaining process to force GM to carry more than $1 billion in labor expenses above what it would have expended absent FCA’s fraud.”
The federal action made news not only because it pitted two Detroit manufacturers against one another, but because U.S. District Judge Paul Borman failed to arrange a meeting between GM CEO Mary Barra and FCA’s then-CEO Mike Manley to work out a resolution.
Borman claimed that allowing the case to progress would be a waste of resources and that the nation needed to heal in the wake of the COVID-19 pandemic.
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