GM Files Suit Against Fiat
General Motors sued its rival Fiat Chrysler on Wednesday, asserting that it bribed United Auto Workers officials in contract negotiations to get a leg up on G.M. over the course of a decade. Hours after G.M. filed the lawsuit, in federal court, the union’s president resigned as the U.A.W. took steps to oust him.
The day’s events embroiled two of the country’s three biggest automakers and the union that represents their workers, a controversy the likes of which the industry has rarely experienced. The lawsuit and the turmoil at the top of the union stem from long-running Justice Department investigations into financial wrongdoing at the union and Fiat Chrysler.
Three former Fiat Chrysler executives and several U.A.W. officers have already pleaded guilty in cases that revealed a cozy back-scratching culture. Corporate and union leaders siphoned off millions of dollars — some of which was meant for a training center — to pay for Rolex watches and lavish personal travel and meals.
The attention-grabbing legal move comes on the heels a the huge strike, during which 46,000 UAW workers shut down production at General Motors for nearly six weeks after the workers’ four year contract expired. The UAW and GM signed a new contract in October that included pay improvements for workers, promises the company would bring full-time workers on permanently and mandatory raises each year.
Acting UAW president Rory Gamble announced a series of ethics reforms in the weeks after Jones’s leave was announced, vowing to make the union’s operations more transparent and ethical.
“The UAW is focused on continuing to implement ethics reforms and greater financial controls to make sure the misconduct which has been uncovered will never happen again,” the union said in a statement distributed Wednesday by spokesman Brian Rothenberg.
“Mr. Iacobelli worked for both [Fiat Chrysler] and General Motors, and he is currently in prison for his crimes, which include the misuse of Joint Program funds,” the statement said. “As to the collective bargaining agreements negotiated with FCA while Iacobelli was an FCA manager, we are confident that the terms of those contracts were not affected by Iacobelli’ s misconduct, nor that of any UAW officials involved in the misuse of Joint Program funds at FCA. Those contracts, which were ultimately ratified by our membership, were negotiated with the involvement of both local and international representatives and the process had multiple layers of checks and balances to ensure their integrity.”