General Motors (GM) has suffered a significant setback after the U.S. Supreme Court denied its request to reopen its racketeering case against rival automaker Fiat Chrysler Automobiles (FCA), which is now a part of Stellantis. The decision is a relief to Stellantis, which has been plagued by allegations of corruption involving the United Auto Workers (UAW) union.
GM had filed a civil lawsuit in 2019 accusing FCA of bribing UAW officials for many years to influence the bargaining process and gain benefits, which would have cost GM billions of dollars. The lawsuit was filed under the Racketeer Influenced and Corrupt Organizations Act, a law designed to target organized crime.
However, a federal judge in Michigan dismissed the lawsuit in 2020, ruling that FCA’s actions were not legally responsible for the alleged injuries suffered by GM. The 6th Court of Appeals of the United States Circuit based in Cincinnati agreed, stating that “even accepting GM’s theory as accurate, the chain of causality between FCA’s bribes and GM’s damage is still to FCA’s conduct had not legally caused GM’s alleged injuries he lower-grade court’s ruling is a blow to the automaker’s efforts to seek compensation from Stellantis. GM had demanded an estimated $6 billion in compensation from FCA.
The decision is also a positive development for Stellantis, which has been embroiled in a separate federal investigation into corruption involving the UAW union. The research has resulted in at least 17 criminal convictions, including former FCA employees and two former UAW presidents, after FCA and UAW officials admitted that they had embezzled funds for their benefit.
The corruption scandal has cast a shadow over Stellantis, which was formed in January 2021 through the merger of FCA and PSA Group. However, the company has pledged to cooperate fully with the investigation and has implemented measures to prevent similar incidents from occurring in the future.
Source: Detroit Free Press