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GM sues Fiat Chrysler alleging bribery scheme in union negotiations

General Motors filed a federal racketeering lawsuit against Fiat Chrysler and its former executives on Wednesday, accusing the automaker of bribing United Auto Workers officials to receive more favorable terms in labor negotiations.

“This lawsuit is intended to hold FCA accountable for the harm its actions have caused our company and to ensure a level playing field going forward,” Craig Glidden, GM’s general counsel, said in a statement.

GM said that Fiat Chrysler “corrupted” collective bargaining agreements between GM and UAW in 2009, 2011 and 2015 by paying millions in dollars in bribes.

“FCA was the clear sponsor of pervasive wrongdoing, paying millions of dollars in bribes to obtain benefits, concessions, and advantages in the negotiation, implementation, and administration of labor agreements over time,” the company said in a statement.

GM said the alleged bribery scheme was authorized at the highest levels of Fiat Chrysler, including the company’s late CEO Sergio Marchionne. The automaker is seeking damages to recoup losses resulting from what it claims was a “systematic and near decade-long conspiracy” to undermine GM’s negotiations with UAW officials.

Fiat Chrysler called the lawsuit “meritless” and said it plans to vigorously defend itself.

“We are astonished by this filing, both its content and its timing. We can only assume this was intended to disrupt our proposed merger with PSA as well as our negotiations with the UAW,” the Italian-American automaker said in a statement. The company last month announced a tentative agreement to merge with Peugeot maker PSA Group, creating the fourth-largest automaker in the world.

GM’s general counsel told reporters on a conference call Wednesday that the lawsuit has no bearing on the ongoing merger discussions between Fiat Chrysler and PSA Group. Glidden also said that the lawsuit won’t affect existing collective bargaining agreements, and that there are no current allegations against Fiat Chrysler CEO Michael Manley.

Shares of GM slipped 3% following the news, while Fiat Chrysler shares dropped nearly 4% during midday trading.

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