Fraud and bribery? OK, but that doesn’t win the case for General Motors

Nov 2019 // Detroit Free Press

GM filed a lawsuit against Fiat Chrysler in federal court in Detroit on Wednesday alleging FCA labor negotiators conspired with corrupt UAW leaders during contract talks to cut a deal that gave FCA a competitive advantage over GM. “GM is saying here that, through bribery, FCA was getting much better terms with the UAW than GM. And that’s how GM was hurt,” said lawyer Thomas Ajamie, a RICO lawyer with offices in New York and Houston. “But how was General Motors hurt? Is there a legitimate gripe? Yeah. But there are going to be 10 or 20 reasons an auto company is more competitive in the market. Maybe their pricing wasn’t as good or their advertising wasn’t as good or they had more recalls.”

That, said Ajamie, is the key. “The issue here is not the claim but the damages. General Motors has to prove what we call causation. Let’s say all these things occurred with the UAW. FCA isn’t going to say these things didn’t occur. People have been convicted. But did it result in poor earnings for GM? What if their pricing stinks or it’s a poorly run company? They can say people did illegal things and some went to jail but it didn’t damage GM. GM has got to show damage.”

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