General Motors filed an explosive federal racketeering lawsuit on Wednesday, alleging crosstown rival Fiat Chrysler Automobiles spent years working with the United Automobile Workers labor union to undermine GM and cause "substantial" damages.
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Under the Racketeer Influenced and Corrupt Organizations Act — also known as RICO — the largest of the Detroit Big Three could receive three times whatever damages it might be able to prove.
The allegations follow revelations that FCA executives had paid off a number of union representatives, including officials involved in contract bargaining. GM claims that the payoff came in the form of concessions that lowered production costs for the smaller automaker, in turn making GM less competitive.
The complaint alleges that former FCA head Sergio Marchionne, who passed away suddenly last year after complications from surgery, orchestrated the conspiracy.
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“We have alleged in the complaint that Mr. Marchionne is responsible for conceiving, executing and sponsoring the alleged wrongdoing," said Craig Glidden, GM's executive vice president and general counsel. “We plan to hold FCA responsible.
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GM files racketeering lawsuit against Fiat Chrysler for conspiring with labor union