Appeals court delays meeting between GM, Fiat Chrysler CEOs
In this Monday, Jan. 14, 2019 file photo, Fiat Chrysler Automobiles FCA logo is shown at the North American International Auto Show in Detroit. (AP Photo/Paul Sancya, file)
DETROIT -- Three federal appeals judges have delayed a court-ordered meeting between the CEOs of General Motors and Fiat Chrysler to try to settle a lawsuit over corruption by union leaders.
U.S. District Court Judge Paul Borman last week ordered GM CEO Mary Barra and FCA CEO Mike Manley to hold the meeting before July 1. But GM on Friday asked the federal appeals court in Cincinnati to overturn the order and remove Borman from the case.
In an order issued Monday, three appellate judges delayed Borman's order to provide time to consider legal points raised by GM.
GM is suing crosstown rival FCA alleging that it got an advantage by paying off union leaders to reduce labour costs during contract talks. FCA's former labour chief, Al Iacobelli, is in prison, although the company denies that it directed any prohibited payments.
In his order last week Borman described the lawsuit as a "nuclear option" that would be a "waste of time and resources" for years if he allows the case to move forward.
The judge ordered Barra and Manley to sit down without lawyers by July 1 and reach a "sensible resolution of this huge legal distraction." Borman wants an update from them on a public video conference that same day. Over the weekend he modified the order to allow lawyers to attend the meeting.
In a court filing, GM called Borman's order a "profound abuse" of power.
"The court possesses no authority to order the CEOs of GM and FCA to engage in settlement discussions, reach a resolution and then appear alone at a pretrial conference eight days later, without counsel," GM's attorneys said.
"Second, the court has no business labeling a properly filed federal lawsuit assigned to the court for impartial adjudication 'a distraction' or a 'nuclear option,"' GM said.
Borman can't be viewed as impartial, company lawyers said.
The judge declined to comment. In a statement Friday, Fiat Chrysler said it stands ready to comply with Borman's order. The Italian-American automaker called GM's lawsuit meritless and said it would not distract FCA from its business. "FCA will continue to defend itself vigorously and pursue all available remedies in response to GM's groundless lawsuit," the statement said.
Federal agents have been rooting out corruption in the senior ranks of the United Auto Workers. The first wave of convictions in 2017 involved key FCA employees who used money from a jointly run training centre to reward union officials.