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August 3, 2020 3:30 PM, EDT

GM Alleges Fiat Chrysler Spent Millions to Bribe UAW Leaders

General Motors headquartersGeneral Motors' headquarters in Detroit. (Jeff Kowalsky/Bloomberg News)

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DETROIT — General Motors is asking a federal judge to reconsider his dismissal of a lawsuit against Fiat Chrysler based on new allegations that FCA bribed union and GM officials with millions stashed in secret foreign bank accounts.

GM alleges that bribes were paid to former United Auto Workers Vice President Joe Ashton and former union presidents Dennis Williams and Ron Gettelfinger. It also alleges that bribes were paid to Al Iacobelli, a former FCA labor negotiator who was later hired by GM.

The allegations were made in a court motion filed Aug. 3 by GM, which wants to revive the lawsuit that was dismissed in July.

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GM alleges that payments were made so the officials would saddle GM with more than $1 billion in additional labor costs.

GM’s motion alleges that payments were made to accounts in places like Switzerland, Luxembourg, Italy, Singapore and the Cayman Islands. The accounts were set up to avoid detection in a federal criminal probe of the union, according to the lawsuit.

Ashton, a former GM board member, is scheduled to be sentenced Aug. 18 in the federal corruption probe. Iacobelli is serving prison time. Williams’ California home was raided by federal agents but he has not been charged. Gettelfinger has not been named in federal documents. He could not immediately be reached for comment.

UAW spokesman Brian Rothenberg and Fiat Chrysler said they could not immediately comment.

In July, U.S. District Judge Paul Borman in Detroit tossed out GM’s lawsuit that alleged that Fiat Chrysler paid off union leaders to get better contract terms than GM.

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He wrote that GM’s alleged injuries were not caused by FCA violating federal racketeering laws, that GM had not stated a claim that could be granted, and that the people harmed by the bribery scheme were Fiat Chrysler workers.

In a 2019 lawsuit, GM alleged that Fiat Chrysler bribed officials of the United Auto Workers union to get lower labor costs, giving FCA an advantage over its Detroit-area rival. GM alleged that FCA CEO Sergio Marchionne wanted to pressure GM into merging by weakening GM with higher costs.

Borman wrote in his ruling that GM’s “pay to harm” theory initially had appeal “but fails on a closer look.”

GM alleged that FCA used bribes to get the UAW to deny GM concessions that were given to Fiat Chrysler. But Borman wrote that the UAW wouldn’t give the concessions to any company that didn’t pay bribes. Therefore, GM’s labor costs weren’t any higher than they would have been without the bribes.

GM says in its new motion that Borman should alter or amend his order allowing GM to amend its complaint to present the new allegations.

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