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Fiat Chrysler's UAW members ratify new four-year contract

DETROIT — The United Auto Workers union said on Wednesday that rank-and-file members at Fiat Chrysler Automobiles NV have voted in favor of a new four-year labor contract with the automaker, helping the Italian-American firm avoid a strike as it works to merge with France's Groupe PSA. FCA and PSA, the maker of Peugeot and Citroen, in October announced a planned $50 billion merger to create the world's fourth-largest automaker. FCA's 47,200 rank-and-file UAW members voted 71% in favor of the new contract. The deal follows contracts the UAW already concluded with larger rivals General Motors and Ford. “Every full-time production employee currently at FCA will be at top rate by the end of this four-year agreement,” Cindy Estrada, UAW vice president and director of the union's FCA department, said in a statement. She added that all temporary workers also have a path to full employment. “We are pleased to have reached a new agreement that allows us to continue our record of adding good-paying UAW-represented jobs,” FCA North America Chief Operating Officer Mark Stewart said in a statement. Ratification of the contract had not been viewed as a sure thing, as union members at FCA in 2015 rejected the first version of a contract. In addition, a federal corruption probe related to embezzlement at the union drew attention. The federal corruption probe led GM to file a racketeering lawsuit against FCA, alleging its rival bribed union officials over many years to corrupt the bargaining process and gain advantages, costing GM billions of dollars. FCA has brushed off the lawsuit as groundless. The contract with GM that was ratified by workers in October followed a 40-day strike in the United States that virtually shuttered GM's North American operations and cost the automaker $3 billion. The UAW has said the contract with FCA included a commitment by the automaker to invest $9 billion, creating 7,900 new jobs over the course of the contract. Of the $9 billion, $4.5 billion was announced earlier this year, to be invested in five plants and creating 6,500 jobs. The investments include $2.8 billion at Warren Truck Assembly plant in Michigan to build a new a plug-in hybrid SUV in 2021 and a potential increase of 1,500 jobs.

Fiat Chrysler Australia executive in trouble over misuse of company funds

While the merger to create FCA was coming together, its managing director for Australia, Clyde Campbell, was allegedly racking up 30 million Australian dollars ($23.1 million) in spending for himself, family, and friends. Now, the former boss is facing a court case from the automaker's legal team for the purported misappropriation. Among the more opulent expenses that Campbell allegedly put on Chrysler's tab included a 40-foot yacht worth the equivalent of $308,000 and lavish Christmas parties for workers, according to The Age. Despite being required to only travel in economy class and get permission for international travel, he also reportedly racked up the equivalent of over $413,000 travel expenses. "The more we dug, the more we found," said an unnamed source to The Age. Campbell came to power in Australia as a general manager for DaimlerChrysler, and became managing director in October 2010. He was reportedly a close friend with former Mercedes-Benz USA CEO Ernst Lieb. After Lieb lost his wrongful dismissal lawsuit, Campbell allegedly helped his friend's partnership in an Aussie auto dealer by using FCA funds for financial support totaling the equivalent of about $3 million. All of this came to light when Pat Dougherty came over from the US to be president and CEO of FCA Australia in December 2014. The staff spilled the full story on Dougherty's first day. "I walked into his office and let it all out. I don't think he knew what hit him," another source said to The Age. A team of forensic accountants was brought in to investigate. The reason that this took so long to discover was that no one was paying attention. First, sales in Australia were growing under Campbell. Also, "in my opinion, back in Michigan, head office didn't have its eyes on the road. They only had eyes on the Fiat deal," an insider said to The Age. That confluence essentially provided the perfect storm for this huge spending. News Source: The AgeImage Credit: Giuseppe Cacace / AFP / Getty Images Government/Legal Chrysler Fiat lawsuit FCA

GM cites evidence of offshore accounts, wants FCA racketeering lawsuit revived

General Motors on Monday asked a U.S. federal judge to reinstate a racketeering lawsuit against Fiat Chrysler Automobiles NV (FCA), saying it has new information on foreign accounts used in an alleged bribery scheme involving its smaller rival and union leaders. In its filing to U.S. District Judge Paul Borman, GM says the scheme, which it alleges occurred between FCA executives and former United Auto Workers (UAW) leaders, "is much broader and deeper than previously suspected or revealed as it involved FCA Group apparently using various accounts in foreign countries ... to control corrupt individuals by compensating and corrupting those centrally involved in the scheme to harm GM." Last month, Borman threw out the racketeering lawsuit, saying the No. 1 U.S. automaker's alleged injuries were not caused by FCA's alleged violations. GM alleged FCA bribed UAW officials over many years to corrupt the bargaining process and gain advantages that cost GM billions of dollars. GM was seeking "substantial damages" that one analyst said could have totaled at least $6 billion. "These new facts warrant amending the court's prior judgment, so we are respectfully asking the court to reinstate the case," GM said in a statement. "FCA will continue to defend itself vigorously and pursue all available remedies in response to GM's attempts to resurrect this groundless lawsuit," FCA said in a statement. In affidavits accompanying GM's filing, attorneys for the automaker said "reliable information concerning the existence of foreign bank accounts" used in the alleged scheme had only come to light recently. "The UAW is unaware of any allegations regarding illicit off-shore accounts as claimed," by GM, the UAW said in a statement. "If GM actually has substantive information supporting its allegations, we ask that they provide it to us so we can take all appropriate actions." Earnings/Financials Government/Legal UAW/Unions Chrysler Fiat GM