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US judge dismisses GM suit against FCA

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A US federal judge on Wednesday dismissed General Motors' lawsuit against Fiat Chrysler, citing "holes" in GM's claim that bribes by its rival to labour union officials raised GM's costs.

[DETROIT] A US federal judge on Wednesday dismissed General Motors' lawsuit against Fiat Chrysler, citing "holes" in GM's claim that bribes by its rival to labour union officials raised GM's costs.

In a stinging ruling, US District Judge Paul Borman, who last month called the suit a "waste of time," issued the ruling that "dismisses GM's Complaint with prejudice" - meaning it cannot be appealed.

GM alleged that FCA bribed auto union officials to secure an unfair advantage in labor talks and try to force it into a merger with FCA.

The complaint, which contained salacious details about extravagant gifts and meals, was built on a massive federal corruption probe of the United Auto Workers which has led to the conviction of 14 people.

FCA has fought the suit and called its claims baseless and a perversion of a US law aimed at organised crime.

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The judge agreed, saying there are "several separate grounds for dismissal," adding in a comment on one of GM's claims in the 94-page, 198-paragraph complaint that "Further scrutiny of this theory reveals additional holes in its logic."

But GM said it would not give up.

"We strongly disagree with the District Court's order and will pursue our legal remedies," the company said in a statement, without elaborating.

"There is more than enough evidence from the guilty pleas of former FCA executives to conclude that the company engaged in racketeering and our complaint showed in detail how their multi-million dollar bribes caused direct harm to GM."

Judge Borman in late June called on GM chief executive Mary Barra and FCA chief executive Michael Manley to meet personally to work out the dispute for the good of the country, saying the world had "changed dramatically" due to the coronavirus crisis and mass protests for racial justice.

He said it would be "a waste of time and resources," for the "mega litigation" to go forward, and noted that both automakers received federal support following the 2008 financial crisis.

"Today our country needs, and deserves, that these now-healthy great companies pay us back, by also focusing on rescuing this country and its citizens from the plagues of Covid-19, racism and injustice, while building the best motor vehicles in the world," Mr Borman wrote in the four-page order.

"Time is of the essence," Judge Borman wrote, underlining the sentence.

AFP

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