In a case that is rarely seen, two major car manufacturers will see a court battle following accusations of racketeering. In its case, General Motors (GM) alleged that executives of Fiat-Chrysler Automobiles (FCA) have been bribing officials in the United Auto Workers (UAW) union over the course of a decade or even more.
As a background, the UAW is a union that represents workers in the United States (including Puerto Rico and along with Canada). As with any union, companies who would “favor” their asks will inevitably be seen as better places to work, compared to those who wouldn’t. In relation to the lawsuit, the alleged racketeering and bribery was able to give FCA an upper hand over GM as far as the union goes. GM accused FCA of bribing the UAW union officials to get better contract terms.
If anything, the impact of such can result to more union protests, unhappy workers, and consequentially a dwindling workforce. For auto manufacturers, this is not a good thing because despite automation of vehicle production, human workers still play a major role in the industry.
This also casts a shadow on Sergio Marchionne’s legacy. GM alleges that the late FCA executive helped the company win union acceptance of cost concessions that were denied GM in labor contracts in 2011 and 2015.
A law practitioner has weighed in on the suit, saying that GM may be “biting off more than they can chew”. Bribery being the main case, it cannot be considered such if it was only between “a few selfish people”. “If you can tie approval of the CEO to the activities in question, it’s going to go a long way towards making General Motor’s case much better,” said Keith Corbett, a former federal prosecutor.
The lawsuit also comes at a precarious time amidst talks of a merger between FCA and Peugeot. The former was quick to downplay the timing of GM’s move. “FCA believes General Motors’ claims are nothing more than a merit-less attempt to divert attention from that company’s own challenges,” FCA was noted as saying.
While both GM and FCA have presence in the Philippines, this lawsuit can have repercussions across the entire automotive industry. With Peugeot coming into the picture, and with Peugeot re-establishing a foothold in the country, how they will be affected remains to be seen. Until then, we can only wait and be thankful that we still have other auto brands keeping the industry steady in our country.