General Motors is suing Fiat Chrysler Automobiles and several former FCA executives over the ongoing corruption scandal that has led to 13 federal criminal charges and has implicated the current and immediate past presidents of the UAW.

The federal racketeering lawsuit that GM filed Wednesday in U.S. District Court in Detroit names FCA and former FCA executives Al Iacobelli, Jerome Durden and Michael Brown as defendants. It also identifies former FCA CEO Sergio Marchionne in the complaint. He died last year.

“We have alleged in the complaint that Mr. Marchionne is responsible for conceiving, executing and sponsoring the alleged wrongdoing," said Craig Glidden, GM's executive vice president and general counsel. “We have no present intent to pursue the UAW. Our focus is on FCA. We believe the responsibility firmly rests on the orchestrater of the wrongdoing … and we plan to hold FCA responsible.”

FCA said it was stunned. 

"We are astonished by this filing, both its content and its timing," it said in a statement. "We can only assume this was intended to disrupt our proposed merger with PSA as well as our negotiations with the UAW. We intend to vigorously defend against this meritless lawsuit and pursue all legal remedies in response to it."

Iacobelli had been vice president of employee relations at FCA, responsible for negotiating and implementing labor relations with the UAW. Durden was a financial analyst at FCA and Brown was director of employee relations at FCA, also involved in UAW negotiations. All three have pleaded guilty to criminal charges.

The FBI alleged that Iacobelli and the late UAW Vice President General Holiefield plotted to keep senior union members “fat, dumb and happy.” While contracts were being negotiated, prosecutors alleged, FCA officials were secretly siphoning money from the company and giving it to senior union officials as an investment in "relationship building."

The top negotiators did this, prosecutors said, by secretly funneling FCA money through a UAW training center and a fake children's charity, ultimately spending it on themselves. 

FCA lowered its labor costs

GM's lawsuit alleges that during contract negotiations in 2011 and 2015, FCA corruption undermined the integrity of collective bargaining with the UAW. It alleges that FCA interfered with implementation of contracts as soon as 2009. 

GM said the corruption cost it "substantial" damages. Specifically, FCA was able to achieve favorable labor costs and operate "differently than their competitors," which lowered FCA's costs, said Glidden.

Glidden said FCA hired more temporary workers and "in-progression" workers, both at lower entry level wages, than GM did and "it did so with the knowledge that guidelines we believed would be in place were not in place."

GM said FCA has an $8 per hour total labor cost advantage due to the corruption. The average total hourly labor cost GM pays is $63 an hour compared with FCA’s $55, Glidden said, citing Center for Automotive Research data.

GM is not indicating a specific dollar amount yet that it seeks from FCA, Glidden said. 

"We are seeking substantial damages. We cannot comment further on the amount or measure the amount of damages until discovery," said Glidden. "We will not put a number on it today. We do believe that the damages we will be able to establish will be substantial due to the length of time.”

GM said it would invest any damages it collects in the lawsuit in the United States and use it to create jobs here. 

Not focused on UAW

The lawsuit is based on RICO and the Taft-Hartley Act. RICO stands for racketeering influenced and corrupt organizations. It's a federal law designed to fight organized crime by granting private plaintiffs an ability to sue for damages suffered as a result of a criminal enterprise. 

Taft-Hartley Act prohibits employers from engaging in bribery, graft, conflict-of-interest payments, and other prohibited transactions with union officials. The act is to ensure union officials are working on behalf of the members. 

"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," said Glidden.

Glidden said GM's focus in the lawsuit is on FCA and the former executives.

"We are supportive of the reform efforts the UAW has announced," said Glidden. "Second, nothing about this lawsuit has anything to do with the recent work stoppage at GM and it will not change" the 2019 contract agreement GM's 46,000 UAW workers ratified on Oct. 25.

The UAW said it didn't believe the corruption influenced contracts with FCA.  

"Mr. Iacobelli worked for both FCA and General Motors, and he is currently in prison for his crimes, which include the misuse of Joint Program funds," UAW Spokesman Brian Rothenberg said in a statement. "As to the collective bargaining agreements negotiated with FCA while Iacobelli was an FCA manager, we are confident that the terms of those contracts were not affected by Iacobelli’s misconduct, nor that of any UAW officials involved in the misuse of Joint Program funds at FCA. Those contracts, which were ultimately ratified by our membership, were negotiated with the involvement of both local and international representatives, and the process had multiple layers of checks and balances to ensure their integrity.

"That said, the fact that these issues can cause doubt about the contracts is regrettable. The UAW leadership is absolutely committed to making whatever changes are necessary to ensure on our end the misconduct that has been uncovered will never happen again.” 

GM alleges that 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."

GM has been caught up in the widespread scandal. A former UAW vice president and one-time GM board member appears set to plead guilty to charges connected to the federal corruption probe.

Joseph Ashton, who faces two conspiracy charges related to wire fraud and money laundering is scheduled for a plea hearing Dec. 4 before U.S. District Court Judge Bernard Friedman.

In addition, Iacobelli went to work for GM after he retired suddenly from FCA on the eve of 2015 negotiations. GM suspended him in the summer of 2017 when he was charged and fired him late that year. Ashton left the GM board at about the same time Iacobelli was dismissed.

More: Ex-UAW VP, former GM board member Ashton expected to plead guilty in probe next month

More: UAW to sell ex-president's lavish Up North cabin as part of ethics cleanup

More: UAW President Gary Jones to take leave of absence as corruption investigation escalates

“The events surrounding Mr. Ashton have nothing to do with what’s alleged in this complaint," said Glidden. "As for Mr. Ashton's conduct, GM did not have knowledge of his conduct and GM will address the allegation in time.”

GM wants future negotiation free of corruption, added Glidden.

GM said the timing of the lawsuit is not related to the UAW entering the final phase of its contract talks with FCA, which started this week. Also, it is not intended to derail FCA’s planned merger with French-based Groupe PSA. GM relied on the federal government’s investigation in bringing the RICO lawsuit. Glidden said he has not discussed the matter with Ford Motor Co.

“The acts that the federal government has brought out through guilty pleas reveal that there were covert acts,” said Glidden. “We followed that and we’ve done our own due diligence and we think now is the time to bring it forward and recover damages.”

Contact Jamie L. LaReau at 313-222-2149 or jlareau@freepress.com. Follow her on Twitter @jlareauan. Read more on General Motors and sign up for our autos newsletter.

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