Fiat Chrysler Seeks Dismissal Of GM's Racketeering Lawsuit

(RTTNews) - Fiat Chrysler Automobiles NV or FCA on Friday urged a federal judge to dismiss General Motors Co's racketeering lawsuit, accusing Fiat Chrysler of bribing United Auto Workers officials to receive favorable terms in labor negotiations.

In November, GM alleged that Fiat Chrysler corrupted the implementation of the 2009 collective bargaining agreement. It also corrupted the negotiation, implementation, and administration of the 2011 and 2015 agreements. According to GM, FCA's manipulation of the collective bargaining process resulted in unfair labor costs and operational advantages, causing harm to GM.

In its response Friday, Fiat Chrysler rejected GM's claim that Chief Executive Sergio Marchionne tried to force a merger between GM and FCA by agreeing to labour contracts that favoured the UAW. Fiat Chrysler said GM's lawsuit was fatally flawed for several reasons.

"It is a predictable tactic taken by the defendants," GM said in a statement. "We are confident in the legal and factual underpinnings of our case."

In court filings, Fiat Chrysler argues General Motors' allegations do not meet the requirements of the Racketeer Influenced and Corrupt Organizations Act as it was not directly harmed by the alleged wrongdoing. FCA also denies that it exhibited the control over the union that GM says it did and that its claims make no sense as a matter of basic economics.

Fiat Chrysler wants a judge to postpone further investigation into GM's claims until its request for dismissal is reviewed, saying the request for evidence is massive and expensive.

Fiat Chrysler denies it had control of the UAW to further its intentions to merge with General Motors. And even if it had, based on GM's argument, the direct victims would be FCA hourly workers who were paid, on average, lower hourly wages, and the U.S. government, which was defrauded by former UAW officials concealing illegal benefits and omitting them from tax forms, according to the filing Friday.

Further, Fiat Chrysler argued that GM's allegations about corrupt contract negotiations should be heard by the National Labor Relations Board, not by a federal court and its injury claims were filed too late.