AP NEWS

Fiat Chrysler chairman not worried by General Motors lawsuit

November 21, 2019

MILAN (AP) — The chairman of Fiat Chrysler Automobiles indicated Thursday that the merger with French carmaker PSA Peugeot will not be affected by a General Motors lawsuit.

John Elkann told reporters in Turin that the Italian American company would fight the lawsuit in court, adding “we are not worried.”

GM has accused Fiat Chrysler in a lawsuit filed at a U.S. district court on Wednesday of bribing union officials to get favorable contract terms from the United Auto Workers Union.

Elkann, speaking ahead of an investor-day event for the Exor investment arm that controls FCA, was quoted by Italian news agency ANSA as saying there would be a memorandum of understanding with PSA by the end of the year, as previously announced.

FCA said the lawsuit is “meritless.”

In the lawsuit, GM accused Sergio Marchionne, the long-time Fiat Chrysler CEO who died last year, of authorizing bribes worth more than $1.5 million to union officials in a scheme to impose unexpected labor costs on GM.

“I am sorry that one is making false accusations against a person like Marchionne who cannot defend himself,” ANSA quoted Elkann as saying.

Marchionne’s successor as Fiat Chrysler CEO, Mike Manley, said in a letter to employees that the lawsuit “rehashes a collage of salacious public allegations” from a pending case involving a training center, and “at first review, beyond unsupportable speculation, does not include any new factual allegations.”

Manley said the company “would not be slowed down by this act,” adding “let’s keep the performance up, as it has clearly got some of our competitors worried.”

Since 2017, eight people have pleaded guilty in an investigation of union officials and Fiat Chrysler executives enriching themselves with money from a job training center in Detroit. The probe appeared to widen this summer when a former UAW official was charged with accepting kickbacks from union vendors.