DETROIT — The CEOs of General Motors and Fiat Chrysler Automobiles were ordered by a federal judge Tuesday to meet in person by July 1 to try to resolve GM’s racketeering suit against FCA.
Without an agreement, the litigation is likely to be contentious and drag on for years, with hearings and depositions from the automakers, the UAW and third-party experts, U.S. District Judge Paul Borman said. The lawsuit, in which GM accuses FCA of bribing UAW leaders to gain an unfair labor-cost advantage, will be a distraction for the companies and a “waste of time and resources for the years to come,” Borman said.
“These legalities will not only divert and consume the attention of key GM and FCA executives from their day jobs — issues of vehicle production, sales, worker safety, rollouts, supplier issues, etc. — but also prevent them from fully providing their vision and leadership of this country’s most pressing social justice and health issues. I mean directly, not through committees that they may set up,” the judge said.
Responses to Borman from GM’s Mary Barra and FCA’s Mike Manley are due by noon July 1 via teleconference.
Companies respond
“GM has a very strong RICO case and we look forward to constructive dialogue with FCA consistent with the court’s order,” GM said in an e-mailed statement.
FCA has vigorously denied the claims, including GM’s accusation that Sergio Marchionne, FCA’s CEO until his death in 2018, wanted to weaken GM to force a merger between the two automakers.
“We agree with Judge Borman’s observation that these are extraordinary times for our country, particularly in light of the COVID-19 pandemic and the tragic death of George Floyd and the spotlight it has focused on racism and social justice,” FCA said in an e-mailed statement. “We also agree that FCA’s focus should continue to be — as it always has been — on building great vehicles for our customers and expanding opportunities for the thousands of women and men whose livelihood depends on that focus.
“Our view of GM’s lawsuit has not changed. As we have said from the date it was filed, the lawsuit is meritless and it should be withdrawn. We therefore acknowledge Judge Borman’s concerns, and look forward to meeting to discuss them and ideally put this matter behind us.”
The world has changed
If necessary, Borman said he is prepared to rule on the case, but “the world has changed dramatically since this case was filed on Nov. 20, 2019. The city, the state and this country need healing,” he said.
“The COVID-19 pandemic and its impact on the health of this country requires our attention here and now. Just as important is our response to the tragic death of George Floyd that has brought to the forefront the longstanding issues of racial discrimination and social justice that require our attention and solution here and now.”
Borman noted the government bailouts that GM and Chrysler received during the Great Recession.
“Today, our country needs and deserves that these now healthy, great companies pay us back,” he said, “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.”
