GM’s legal battle with Fiat Chrysler turns into the absurd

Illustration for article titled GMs Legal Battle With Fiat Chrysler Turns To The Absurd

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GM Fiat Chrysler sued in November on alleged corrupt union negotiations, a lawsuit that was later dismissed although one has done so so far has refused to die. Things became sharper last week when GM said FCA had a “mole” in GM. Today, FCA said that accusations of GM “would make John Le Carré circles.”

The documents were submitted in response to GM asking U.S. District Judge Paul Borman to reopen the case last week, while also speaking of the “mole” and various offshore bank accounts, GM said it had been discovered since it submission of the original complaint. That complaint alleges that FCA sabotaged contract negotiations for GM with the UAW, which in turn gave FCA a competitive advantage in the form of lower labor costs.

FCA has denied GM’s version of events all along, but has openly mocked the new allegations of ‘moles’. Submit the most important part of the current documents:

GM’s proposed Amended Complaint reads like a script from a third-class spy film, full of outrageous accusations that FCA paid not one, but two, “mol[s]”Infiltrate”[] GM ”and“ funnels[] inside information to [FCA]”With money use” stashed “in a” wide network “of” secret abroad [bank] accounts. ”(Movement 2, 5, 7-8, 20- 21.) None of this is true. That GM has extended its attacks to individual FCA officials and employees, making wild accusations against them without a report of actual support, is despicable.


In addition to collaborating on an unsubstantiated ‘corporation espionage’ story that John Le Carré would cringe (Motion 21), GM is (i) misrepresenting the “direct causation” standard under RICO, (ii) misrepresenting the legal standard government permission to change after judgment has been entered into, and (iii) accuses the Court of “manifest error” by dismissing the complaint without changing GM’s leave, although GM spent two years drafting its original complaint and previously did not request leave to amend . GM is wrong in every way.

This motion is the latest example of the lengths GM is willing to go in attacking FCA, and accuses the Court of ill-treatment along the way. GM’s fictitious account of “corporate espionage” is based entirely on two unremarkable allegations:

FCA – a Dutch corporation headquartered in the United Kingdom, with branches operating in Italy and more than 40 other countries, and selling to customers in more than 130 countries – maintains “foreign bank accounts” in countries such as Switzerland , Luxembourg, Liechtenstein, Italy, Singapore, the Cayman Islands, and others. ”(Motion 5.) That is unremarkable, and certainly not illegal.

Certain individuals – such as Alphons Iacobelli (who hired GM without asking the FCA for a referral after his employment was summarily terminated by the FCA) and Joseph Ashton (a former UAW official who served on the Board of Director of GM and has no affiliation with FCA) —Other bank accounts held or controlled in some of the same countries. (AC ¶¶ 35, 43.) Even if true, there is nothing illegal about it.

Only based on the “existence of [these] foreign bank accounts “(Karis Decl. ¶ 10), GM jumps to the bold conclusion, which it only pleads for” information and belief, “that Iacobelli and Ashton were” mules[s]Paid by FCA via secret overseas [bank] infiltrate accounts ”to“[] GM, ”“ funnels[] inside information to [FCA], And ensure that benefits and concessions provided to FCA by the UAW were also not provided to GM. (Motion 2, 5, 7-8, 20-21.) No facts alleged in the proposed Amended Complaint – not one – support this scandalous speculative accusation.

GM on Monday issued the following statement in response to the FCA’s response, via Automotive News:

“The FCA’s corruption in the collective bargaining process remains unintentional – a federal investigation is underway and there have been multiple guilty pleas,” GM said in a statement. “New facts discovered by GM’s investigation that FCA seeks to reduce – including offshore accounts in multiple countries – involve several individuals and make GM’s RICO case even stronger. GM is trying in court to discover the full extent of the damage caused by the FCA bribery scheme. “

GM said nothing in the FCA’s responses “takes into account the significance of these allegations and the direct damage caused by the corruption of the suspects GM, and the Court must change its prejudice and reinstate our case.”

This is all a bit confusing, but this seems out of place as both sides seem to have unlimited amounts of money to spend on lawyers, in addition to all the time in the world. Borman, who was already very tired of this matter, is likely to make a quick statement on GM’s reorganization request, but who can say where this case is going from there.

You can read the full answer below.