Fiat Shares Slump As GM Lawsuit Alleges "Pervasive Wrongdoing" And "Millions In Bribes" To UAW

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

On Wednesday, it was reported that General Motors had filed a federal racketeering lawsuit against Fiat Chrysler and its former executives, according to CNBC. The suit alleges that the automaker bribed UAW officials to receive more favorable terms during its labor negotiations. 

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 to say: "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."

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