General Motors and Fiat Chrysler Automobiles

U.S. judge orders CEOs of GM, FCA to resolve racketeering lawsuit

A federal judge in Detroit on Tuesday ordered the CEOs General Motors and Fiat Chrysler Automobiles (FCA) to meet by July 1 and try resolving GM’s racketeering lawsuit.

U.S. District Court Judge Paul Borman called on GM CEO Mary Barra and FCA CEO Mike Manley to meet in person and try resolving the case which can otherwise take years to settle.

“What a waste of time and resources now and for the years to come in this mega-litigation if these automotive leaders and their large teams of lawyers are required to focus significant time-consuming efforts to pursue this nuclear-option lawsuit if it goes forward,” said Borman at the end of a hearing in which FCA asked the judge to dismiss the lawsuit filed by GM.

Borman said instead, the automakers need to focus on building cars and keeping people employed at a time when coronavirus has damaged the U.S. economy and the country is also facing issues of racial injustice following the death of George Floyd.

GM filed the racketeering lawsuit against FCA in November 2019, accusing FCA of bribing United Auto Workers (UAW) union officials over many years to corrupt the bargaining process for advantages, costing GM billions of dollars. GM is looking for “substantial damages” that one analyst said could total at least $6 billion.

Barra and Manley should meet, comply with social distancing to keep themselves safe from coronavirus, to “explore and indeed reach a sensible resolution,” Borman said during the hearing, which was broadcast online.

While it is common for judges to order parties to attempt to resolve disputes outside court, it is uncommon that the chief executives of two big companies be ordered to meet face-to-face, not just to settle the lawsuit but also to serve a greater good.

A GM spokesman said the American automaker has a strong case and “we look forward to constructive dialogue with FCA consistent with the court’s order”.

FCA officials said they still believe the lawsuit has no merit but acknowledged Borman’s concerns and said they “look forward to meeting to discuss them and ideally put this matter behind us”.

Borman stated he wanted to hear from both CEOs personally at noon on July 1 to provide him with results from their talks.

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