GM sued FCA in 2019, and the allegation centered around a claim that FCA engaged with members of the United Auto Workers to corrupt the collective bargaining process to gain labor advantages and GM said it cost them billions of dollars.
FCA US LLC , one of the ‘big three’ American automobile manufacturers, ultimately pleaded guilty to conspiring to violate the Labor Management Relations Act, also known as the Taft-Hartley Act, in making illegal payments to officers of the United Auto Workers. FCA is the American operating subsidiary of Stellantis.
Representatives of FCA appeared in a virtual court hearing and admitted that the company had conspired with other entities and individuals to violate the Taft-Hartley Act. The case arose when investigators found that FCA made more than $3.5 million in illegal payments to officers of the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America during a period which lasted from 2009 and continued on through 2016.
Prosecutors alleged that executives of FCA, including Alphons Iacobelli, Jerome Durden, and others, were behind the illegal payments to senior officials of the UAW. At that point, Iacobelli was the Senior Vice President of FCA US LLC in charge of labor relations.
The government said that illegal payments to UAW officials took came in the form of extravagant meals, free rounds of golf, extravagant parties for the UAW International Executive Board, the gift of an expensive Italian-made shotgun, clothing and designer shoes, and other personal items.
FCA executives were also charged with paying off the mortgage of former UAW Vice President General Holiefield, and it was also alleged that Holiefield and his widow received hundreds of thousands of dollars directed through a ‘charitable organization’ operated by Holiefield.
The UAW-Chrysler National Training Center (NTC) was supposed to provide training, health and safety protections for FCA workers.
As part of the case, UAW officials who accepted illegal payments included former UAW Vice Presidents Holiefield and Norwood Jewell, Holiefield’s widow, Monica Morgan, and senior UAW officials, Virdell King, Keith Mickens, and Nancy Johnson.
Morgan the other UAW officials – with the exception of Holiefield – have plead guilty to conspiring to accept the illegal payments from FCA or tax charges. Holiefield died in 2014.
Under the final terms of the agreement, FCA said they would pay a fine of $30 million and be subject to probation for three years and scrutiny from an independent compliance monitor selected by the government.
“Through its participation in this conspiracy, FCA violated federal labor law and undermined the collective bargaining process and the faith of the UAW’s membership in their leaders. By seeking a $30 million fine and three years of oversight by a court-appointed monitor, we are holding FCA accountable and sending a message to other companies that these types of crimes will not be tolerated,” said one Acting United States Attorney.
Wayne County Circuit Judge David Allen dismissed the GM lawsuit in state court which named two former FCA executives who already plead guilty in the Justice Department bribery case. In doing so the judge added that GM failed to adequately demonstrate that FCA caused it any actual, legally recognizable harm through its bribery scheme.
GM’s lawsuit had sought damages to be determined at trial…not limited to the billions of dollars in damages GM suffered.
“As we have said from the date the original lawsuit was filed, it is meritless,” said Stellantis spokeswoman Shawn Morgan. “The courts once again agreed and dismissed GM’s complaint.”
For their part, a GM spokesman said that they “respectfully disagree” with the ruling and are continuing to consider legal options.”
To date, 14 people have been convicted in the 2009 probe, and among those are three former executives of FCA and a pair of former UAW presidents.