Timeline: What led GM to sue rival Fiat Chrysler over bribery accusations

General Motors Co.’s surprise lawsuit against crosstown rival Fiat Chrysler Automobiles NV is the latest chapter in a multi-year saga involving illicit payments made by former Fiat Chrysler executives to union leaders, allegedly to smooth passage of labor contracts.
By : Bloomberg
| Updated on: 21 Nov 2019, 10:59 AM
File photo (Reuters)
File photo (Reuters)
File photo (Reuters)
File photo

(Bloomberg) -- General Motors Co.’s surprise lawsuit against crosstown rival Fiat Chrysler Automobiles NV is the latest chapter in a multi-year saga involving illicit payments made by former Fiat Chrysler executives to union leaders, allegedly to smooth passage of labor contracts.

In a lawsuit filed Wednesday, GM alleges that those bribes helped Fiat Chrysler win an advantageous labor deal and ultimately cost GM billions of dollars. The dispute between the two Detroit automakers grew out of a federal probe into corruption at the United Auto Workers, which has netted convictions of several officials and led its most recent president to step down late Wednesday. GM’s case -- which doesn’t target the UAW -- cites events dating back to 2009, when both it and Fiat Chrysler’s predecessor company, Chrysler LLC, were emerging from bankruptcy.

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Here’s an abbreviated and annotated timeline:

July 2009:

Fiat Chrysler officials start funneling money from a company-funded UAW training center to union officials, just three months after Chrysler LLC filed for bankruptcy and one month after its assets were purchased by Fiat SpA.

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April 29, 2015:

Former Fiat Chrysler Chief Executive Officer Sergio Marchionne outlines his plan for reducing industry production capacity and boosting shareholder returns in a presentation entitled “Confessions of a Capital Junkie," part of a public campaign he started months before to push for consolidation.

June 9, 2015:

GM CEO Mary Barra publicly rebuffs Marchionne’s attempt to cajole GM into a merger, which he had formally requested in the spring of 2015 -- and which GM claims he sought as early as Oct. 2012.

July 20, 2015:

Fiat Chrysler and the UAW kick off negotiations for a new four-year contract, resulting in an October deal with significant pay raises for union workers and which sets a pattern for separate labor agreements with GM and Ford Motor Co.

July 26, 2017:

U.S. federal prosecutors indict Fiat Chrysler’s former vice president in charge of labor negotiations, Al Iacobelli, and the widow of a deceased UAW executive who headed the union’s Fiat Chrysler department. The government also announces charges against another Fiat Chrysler official, Jerome Durden, who becomes the first person implicated in the scandal to plead guilty less than a month later.

Jan. 22, 2018:

Iacobelli, the highest-ranking Fiat Chrysler executive implicated by prosecutors, pleads guilty to violating the Labor Management Relations Act, among other charges, and is sentenced to more than five years in prison in August.

July 25, 2018:

Fiat Chrysler CEO Marchionne’s death is announced following complications from a shoulder operation.

Aug. 30, 2019:

Federal agents raid the homes of then UAW President Gary Jones and his predecessor, Dennis Williams.

Oct. 25, 2019:

UAW ratifies a new four-year contract deal with GM, ending a nearly six-week strike and concluding negotiations that began in July.

Nov. 20, 2019:

GM files racketeering suit against Fiat Chrysler, alleging the rival’s bribery scheme cost it billions of dollars from tainted labor contracts. UAW chief Jones, who took an indefinite leave of absence on Nov. 2, resigns after union takes steps to oust him.

To contact the reporter on this story: Chester Dawson in Southfield at cdawson54@bloomberg.net

To contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, David Welch

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.

First Published Date: 21 Nov 2019, 10:59 AM IST
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