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August 11, 2020

FCA fires back on GM lawsuit

Fiat Chrysler Automobiles NV (FCA) reportedly has asked a US federal judge to dismiss a request from General Motors to reinstate a racketeering lawsuit against its smaller rival, comparing a recent GM filing to a "third rate spy movie, full of preposterous allegations".

By Olly Wehring

Fiat Chrysler Automobiles NV (FCA) reportedly has asked a US federal judge to dismiss a request from General Motors to reinstate a racketeering lawsuit against its smaller rival, comparing a recent GM filing to a "third rate spy movie, full of preposterous allegations".

Reuters noted GM last week asked US District Judge Paul Borman to reopen the case, claiming it had new information on foreign accounts used in an alleged bribery scheme involving FCA and leaders of the United Auto Workers (UAW) union.

When it first filed its lawsuit last year, GM reportedly alleged FCA bribed UAW officials over many years to corrupt the collective bargaining process and gain advantages, costing GM billions of dollars. GM was seeking "substantial damages" which one analyst cited by Reuters said could have totalled at least US$6bn.

But last month, Borman threw out the racketeering lawsuit, saying GM's alleged injuries were not caused by FCA's alleged violations.

In its latest filing, cited by Reuters, FCA said as it operates facilities in Italy and more than 40 other countries, the existence of foreign bank accounts is "unremarkable, and certainly not illegal".

After FCA's filing, GM said it intended to uncover "the full extent of harm the FCA bribery scheme caused GM".

"FCA's corruption of the collective bargaining process remains undeniable," the automaker said in a statement cited by Reuters.

"It is… clear to me that this series of attacks is directly related to our success in competing and winning where it matters, in the market," FCA chief executive Mike Manley wrote on Monday in a letter to employees seen by Reuters.

"The consistent strengths we've demonstrated over the last decade will be deployed to even greater effect as we complete our merger with Groupe PSA."

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