Dividends and GM sues FCA, alleging union bribes cost it billions

For a long time, the United Auto Workers or UAW had a very public negotiating strategy, it tried to pick the weakest of the car companies (GM. Ford and Chrysler or FCA) and with the deal it received, “walk across the street” to the other companies to match the agreement. In this fashion, no matter which company its union members worked at, the pay and benefits were similar.

All 3 companies have gone up and down in the financial progress, but in an article by Nick Carey of Reuters, GM filed a lawsuit against FCA (Fiat Chrysler Automotive) that its contracts forced higher costs on GM. GM maintains the FCA contracts were not the same as the GM contracts and thus Chrysler was secretly allowed to use more temporary workers and lower paid second tier workers than GM was allowed. The contacts at the auto companies lowered full time wages depending on when a person was hired. FCA says they did not, but the lawsuit goes on.

FCA is in talks with PSA which includes the Peugeot, Citroen and Opel brands based in France.

Linking to dividend paying stocks, companies which are profitable have the ability to use the courts to combat the competition and to keep a fair system from their advantage. It is not unusual for profitable companies to use the court system or be sued by the competition, so lawsuits are on going. How they turn out is another issue, but one should expect profitable companies to use the courts to solve problems and keep competition at bay.

There are more questions than answers, till the next time – to raising questions.

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