Why GM and Fiat Chrysler Are In a Bitter War Over ‘Bribery’ and ‘Spying’
GM says FCA and leaders of the United Auto Workers union stashed millions in offshore bank accounts.
A month after a federal judge dismissed General Motors' racketeering case against rival automaker Fiat Chrysler Automobiles (FCA), the two titans are putting their gloves back on and stepping into the ring. New accusations by GM allege that top officials at FCA and the United Auto Workers (UAW) union have passed millions of dollars in bribes through offshore bank accounts in order to drive up the cost of GM's labor force.
GM's return to court brings new allegations for FCA and the UAW, alleging that the duo perpetrated numerous acts of bribery that directly harmed the automaker. In particular, GM alleges that FCA and the UAW conspired to lower the cost of FCA's workforce, all while channeling funds through foreign bank accounts that contained "millions of dollars." As a result, the lawsuit claims that the impact on GM has cost the automaker billions.
"New facts about the direct harm FCA caused GM have come to light and they are detailed in our amended racketeering complaint," said a GM spokesperson in a press release. "These new facts warrant amending the court’s prior judgment, so we are respectfully asking the Court to reinstate the case."
According to court filings, GM investigators uncovered evidence of bank accounts in more than a half-dozen countries, including the Cayman Islands, Switzerland, Italy, Liechtenstein, Luxembourg, Singapore, and more.
At the head-end of GM's lawsuit are top officials from the UAW, including former President Dennis Williams (who was recently reordered to re-pay the UAW more than $55,000 in inappropriately reimbursed travel expenses), retired President Ron Gettelfinger, and former Vice President Joe Ashton.
In fact, Ashton was named as a particularly pivotal figure in GM's claim of harm. The former VP is accused of being a mole as he sat in GM's board room as a representative of the UAW during 2015 labor negotiations (and eventually as a full-fledged GM board member). The new claims further accused Ashton of keeping an off-shore account in the Cayman Islands during the same time that FCA was allegedly issuing bribery payments to top UAW officials, including former president Dennis Williams, who appointed Ashton to the seat.
Gettelfinger, who has been retired from the UAW since 2010, is also accused of taking bribes through foreign accounts in both his and an unnamed family member's name. He is also blamed for ensuring that unscrupulous leaders maintained power within the UAW to continue the supposed circle of corruption. In an open letter to GM, Gettelfinger called the lawsuit by GM a "malicious and utterly baseless attack" against him and his family.
The UAW issued a statement dismissing the claims and noting that it is unaware of any allegations regarding illicit off-shore bank accounts.
The lawsuit also names five individuals from Fiat Chrysler's side of the house, including former Vice President Alphons Iacobelli who is already serving a five-and-a-half-year sentence for siphoning more than $4.5 million from the UAW-Chrysler National Training Center.
In 2018, former UAW President Williams spoke out against Iacobelli, dismissing him as a "crook and a liar" who used the funds to purchase goods such as a $300,000 Ferrari 458 Spider and two gold pens that cost $35,700 each.
FCA outright denies the claims.
“GM’s proposed Amended Complaint reads like a script from a third-rate spy movie, full of preposterous allegations that FCA paid not one, but two, 'mole[s]' to 'infiltrate GM' and 'funnel inside information to [FCA]' using money 'stashed' in a 'broad network' of 'secret overseas [bank] accounts,'" reads court documents filed by FCA's attorneys on Monday. "None of that is true.”
The filing also calls the claims "despicable" and without evidence.
In July, Federal Judge Paul Borman granted FCA's request to dismiss GM's racketeering lawsuit after GM CEO Mary Barra and FCA Chief Executive Mike Manley failed to meet and find a reasonable solution. GM's new allegations have reignited the feud between the two automakers, a lawsuit that Borman had previously called a "waste of time and resources".
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