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Fiat Chrysler Automobiles N : GM Sues Ex-Director, Alleges Leaks to Fiat

09/16/2020 | 02:48am

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

 

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