Fiat Shares Tumble After GM Files Racketeering Lawsuit Alleging "Millions In Bribes" To Corrupt UAW

"Bribery" and "quid pro quo" are certainly the buzzwords of the fall, as first the President, and now Fiat Chrysler, have found out the hard way.

In the latest stunning twist gripping the troubled auto sector, moments ago General Motors filed a federal racketeering lawsuit against Fiat Chrysler and its former executives including its now deceased former CEO, the late Sergio Marchionne,according to CNBC. The suit alleges that the Italian automaker bribed UAW officials to receive more favorable terms during its labor negotiations. 

GM said it will seek “substantial damages” from FCA, but did not specify an amount.

GM's general counsel Craig Glidden commented: “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.”

Shares of Fiat Chrysler slumped during mid-day trading on Wednesday in response to the news:

General Motors alleges that Fiat corrupted collective bargaining agreements between GM and the UAW in 2009, 2011 and 2015 by paying million of dollars in bribes. 

General Motors' statement goes on:

"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."

The statement continues: "FCA corrupted the implementation of the 2009 collective bargaining agreement. It also corrupted the negotiation, implementation, and administration of the 2011 and 2015 agreements. FCA’s manipulation of the collective bargaining process resulted in unfair labor costs and operational advantages, causing harm to GM."

This summer, we reported that the FBI had raided the home of the UAW's President as part of an ongoing corruption probe into the labor union.

General Motors recently secured a labor deal with the UAW in October, ending one of the longest labor strikes in the company's history.