Fiat Chrysler has called allegations it planted a spy on General Motors’ board “despicable” and accused its rival of running “a smear campaign”, in the latest twist in a bitter legal battle between the two carmakers.

Last November, GM accused FCA of causing it harm by paying bribes to union officials that corrupted pay negotiations and resulted in it having to pay higher wages.

Judge Paul Borman dismissed GM’s case in July.

Last week, GM claimed to have uncovered fresh details about FCA, including that a union member on GM’s board was a “paid mole” for FCA, and that the company used a network of offshore accounts to hide bribes paid to unions.

FCA stringently denied the claims in its rebuttal filed on Monday.

“GM must know that the prospect of the court changing its mind . . . is slim to none, so this motion is apparently a vehicle for GM to make more defamatory and baseless accusations about a competitor that is winning in the marketplace,” it said.

The allegations “reads like a script from a third-rate spy movie” and “would make John le Carré cringe,” it added, saying that GM “is engaged in a smear campaign”.

It said holding international bank accounts is “unremarkable and certainly not illegal” given the company’s presence in 130 countries, and that GM had not produced evidence they were linked to payments to union members.

“Such baseless speculation — plainly the product of a fevered imagination — is insufficient to state a claim,” it said.

FCA has long said GM’s lawsuit last November was filed to disrupt its merger with PSA, the French carmaker that also owns Opel, GM’s former lossmaking European operation.

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Under PSA, the Opel-Vauxhall business has turned a profit, while the merger would catapult the combined business past GM, making it the world’s third-largest carmaker by sales behind Toyota and Volkswagen.

FCA has admitted to bribing several union officials, and one former company director Alphons Iacobelli is serving a prison sentence

But GM’s lawsuit — which sought billions in damages — was the first time another carmaker had claimed to be damaged directly by the scandal.

In its latest filing last week, GM said Mr Iacobelli had control of some of the international bank accounts allegedly used to make payments to union officials.

Over the weekend, Mr Iacobelli’s lawyer Michael Nedelman called GM’s allegations “scurrilous” and likened them to the communist witch hunts of the 1950s.

Via Financial Times