GM Accuses Ex-Board Member of Leaking Information to Rival Fiat -- Update
16 September 2020 - 8:35AM
Dow Jones News
By Mike Colias
General Motors Co. is suing a former board member, claiming he
leaked confidential information to a rival company and to the
United Auto Workers, a move the auto maker says added billions to
its labor costs.
In a federal lawsuit filed in New Jersey this week, the company
accused Joseph Ashton, a former vice president at the UAW, of
accepting bribes from crosstown competitor Fiat Chrysler
Automobiles NV, which was at the time trying to pressure GM into a
merger. Mr. Ashton served as a director at GM at the time of the
merger advances, which later became public.
Mr. Ashton's attorney, Jerome Ballarotto of New Jersey, didn't
immediately respond to requests for comment. Fiat Chrysler has
called GM's broader allegations of bribing union officials,
contained in other litigation, meritless and said they are an
attempt to hurt the company's reputation.
In its lawsuit, GM said Fiat Chrysler used offshore bank
accounts to bribe Mr. Ashton in exchange for confidential
information that he had access to in his role as a GM board member.
The former UAW official served on GM's board from 2014 to 2017.
The lawsuit also accuses Mr. Ashton of taking bribes from Fiat
Chrysler during the time he served as the UAW's lead labor
negotiator with GM. GM said Fiat Chrysler paid off Mr. Ashton to
drive a harder bargain with GM in labor negotiations.
"In part due to Ashton's disloyalty and breaches of confidence,
GM was forced to incur billions of dollars in increased labor
costs," GM's lawsuit says.
The lawsuit is an extension of a broader effort by GM to hold
Fiat Chrysler accountable for what it claims was an orchestrated
effort to harm GM.
In an unusual legal standoff against two major competitors, GM
in November filed a racketeering lawsuit against Fiat Chrysler,
claiming its employees bribed UAW officials to gain a competitive
edge on labor costs.
GM last month appealed the case to the Sixth U.S. Circuit Court
of Appeals, after a federal judge in Detroit dismissed it.
GM made similar allegations against Mr. Ashton last month in a
court filing that attempted to keep alive its federal lawsuit
against Fiat Chrysler.
In the suit against Mr. Ashton, GM also names former UAW
President Dennis Williams as a "key player" in Fiat Chrysler's
alleged conspiracy to merge with its larger competitor. GM alleges
Fiat Chrysler was also using offshore accounts to pay bribes to Mr.
Williams, who was charged with embezzlement late last month.
Attorneys for Mr. Williams didn't immediately return a request for
comment.
Mr. Ashton last year pleaded guilty to conspiracy to commit wire
fraud and money laundering while a UAW official. He was accused of
rigging UAW vendor contracts in exchange for kickbacks.
The charges against Messrs. Ashton and Williams were part of a
broader, multiyear federal investigation into corruption at the UAW
that has resulted in charges against 15 people.
--Nora Naughton contributed to this article.
Write to Mike Colias at Mike.Colias@wsj.com
(END) Dow Jones Newswires
September 15, 2020 18:20 ET (22:20 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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