General Motors on Friday asked a federal court of appeal to quash an order requiring its CEO to meet with Fiat Chrysler chief by next week to try to settle a lawsuit related to the corruption of union leaders. GM also asked the court of appeal to remove US district judge Paul Borman from the case.
GM is suing its FCA rival in crosstown, claiming that it obtained an advantage by reimbursing union leaders to reduce labor costs during contract negotiations. Former FCA labor chief Al Iacobelli is in jail, although the company denies directing banned payments.
Borman described the lawsuit as a “nuclear option” that would be “a waste of time and resources” for years if he allowed the matter to go ahead.
The judge ordered GM CEO Mary Barra and Fiat Chrysler CEO Mike Manley to sit down without a lawyer before July 1 and come to a “reasonable resolution for this huge legal distraction”. Borman wants to update them on a public videoconference the same day.
In a court case, GM called Borman’s order “a gross abuse” of power.
“The court has no authority to order the CEOs of GM and FCA to enter into settlement discussions, reach a resolution and then appear alone at a pre-hearing conference eight days later , without a lawyer, “said lawyers for GM.
“Second, the court does not have a properly classified federal trial label assigned to the court for impartial judgment” a distraction “or a” nuclear option “,” said GM.
Borman cannot be said to be impartial, lawyers for the company said.
The judge declined to comment. In a statement released Friday, Fiat Chrysler said it was ready to comply with Borman’s order. The Italian-American automaker called GM’s trial baseless and said it would not divert FCA from its activities. “The FCA will continue to vigorously defend itself and pursue all available remedies in response to GM’s baseless trial,” said the statement.
Federal agents have rooted out corruption in the upper ranks of the United Auto Workers. The first wave of convictions in 2017 involved key FCA employees who used money from a jointly managed training center to reward union leaders.
AP automotive writer Tom Krisher contributed to this story.