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Federal grand jury issues subpoenas to U.S. FCA dealers

Despite an attempt to clarify and backtrack, it seems the investigation into Fiat Chrysler Automobile's false sales reporting is picking up steam. According to Automotive News, FCA dealers and regional offices have received subpoenas ordering them to supply documents and testimony to a grand jury in Detroit. Of course, the dealers are objecting to the request. They claim the subpoenas are too broad and would require them to hand over too much personal information, like personal phone numbers of dealer employees going back years. The group wants to make it clear that FCA has clarified its sales reporting and that the issue is with the manufacturer, not dealers. The dealers say that FCA employee records and testimony should be enough. It's rumored that a dealer group is the one that sparked the investigation in the first place. FCA confirmed on July 18 that it indeed was under investigation by a number of federal agencies. Although they've clarified their position regarding sales reporting, the fraud investigation continues full steam. Related Video:

Auto bailout cost the US goverment $9.26B

Depending on your outlook, the US Treasury's bailout of General Motors, Chrysler (now FCA) and their financing divisions under the Troubled Asset Relief Program was either a complete boondoggle or a savvy move to secure the future of some major employers. Regardless of where you fall, the auto industry bailout has officially ended, and the numbers have been tallied. Of the $79.69 billion that the Feds invested to keep the automakers afloat, it recouped $70.43 billion – a net loss of $9.26 billion. The final nail in the coffin for the auto bailout came in December 2014 when the Feds sold its shares in Ally Financial, formerly GMAC. The deal turned out pretty good for the government too because the investment turned a 2.4 billion profit. The actual automakers have long been out of the Treasury's hands, though. The current FCA paid back its loans six years early in 2011, the Treasury sold of the last shares of GM in late 2013. According to The Detroit News, the government's books actually show an official loss on the auto bailouts of $16.56 billion. The difference is because the larger figure does not include the interest or dividends paid by the borrowers on the amount lent. While it's easy to see fault in any red ink on the Feds' massive investment, the number is less than some earlier estimates. At one time, deficits around $44 billion were thought possible, and another put things at a $20.3 billion loss. Outside of just the government losing money, the bailouts might have helped the overall economy. A study from the Center for Automotive Research last year estimated that the program saved 2.6 million jobs and about $284.4 billion in personal wealth. It also indicated that the Feds' reduction in income tax revenue alone from Chrysler and GM going under could have been around $100 billion for just 2009 and 2010, significantly more than any loss in the bailout.

Fiat Chrysler denies GM's 'preposterous' bribery allegations

DETROIT — Allegations by General Motors that Fiat Chrysler Automobiles bribed union officials are “preposterous” and read like a script from a “third-rate spy movie,” FCA lawyers wrote in court documents filed Monday. GM, in a court motion last week, alleged that Fiat Chrysler used foreign bank accounts to bribe union officials so they would stick GM with higher labor costs. But in a response, the Italian-American automaker fired back, calling GMÂ’s claims “defamatory and baseless.” GM alleged in a court filing last week that FCA spent millions on bribes by stashing the money in foreign accounts. The allegations of new evidence were made in a motion asking a federal judge to reconsider his July dismissal of a federal racketeering lawsuit against Fiat Chrysler. In trying to revive the lawsuit, GM alleged that bribes were paid to two former United Auto Workers presidents, as well as a former union vice president and at least one former GM employee. In its response, Fiat Chrysler said GM has to know that the prospect of getting the judge to overturn the dismissal is slim to none. “So this motion is apparently a vehicle to make more defamatory and baseless accusations about a competitor that is winning in the marketplace.” FCA denied allegations by GM that FCA paid two “moles” to infiltrate GM and send inside information. The company also denied that foreign bank accounts were involved. “That GM has extended its attacks to individual FCA officers and employees, making wild allegations against them without a shred of factual support, is despicable,” FCA lawyers wrote. GM's claims are based on the alleged existence of foreign bank accounts, which are legal, Fiat Chrysler wrote. “There is not one well-pled allegation in the proposed amended complaint (by GM) that these foreign bank accounts were used to pay bribes or facilitate any other illegal conduct,” FCA's response said. GM contends that bribes were paid to former United Auto Workers Presidents Dennis Williams and Ron Gettelfinger, as well as Vice President Joe Ashton. It also alleges money was paid to GM employees including Al Iacobelli, a former FCA labor negotiator who was hired and later released by GM. GM alleges that payments were made so the officials would saddle GM with more than $1 billion in additional labor costs.