EPA claims Fiat Chrysler cheated on emissions
Automaker denies accusations, says it’s done nothing illegal
U.S. regulators acDETROIT cused Fiat Chrysler Automobiles of violating emissions standards in more than 100,000 diesel vehicles, spawning concerns that the company could become ensnared in a scandal like the one that engulfed Volkswagen Group.
The Environmental Protection Agency said Thursday that Fiat Chrysler illegally installed software on about 104,000 pickups and sport-utility vehicles that spewed harmful pollutants while failing to disclose the technology.
The allegations involve the 2014, 2015 and 2016 Jeep Grand Cherokee and light-duty Ram 1500 pickup trucks with 3liter diesel engines.
The EPA said the automaker installed eight different undisclosed software programs on the vehicles, collectively causing them to spew harmful nitrous oxide emissions, which can exacerbate respiratory conditions.
“This is a clear and serious violation of the Clean Air Act,” said Cynthia Giles, assistant administrator for the EPA’s Office of Enforcement and Compliance Assurance. “There is no doubt they are contributing to illegal pollution.”
Fiat Chrysler CEO Sergio
Marchionne blasted the EPA in a quickly arranged media call, saying he was offended by the agency’s “incredibly belligerent” attacks on the auto industry.
He said his company had done nothing illegally and to try to dispel comparisons to Volkswagen’s crisis.
“There is nothing in common between the VW reality and what we are describing here,” he said. It’s “absolute nonsense” to suggest so, he said, and anyone who disagreed with him is “smoking illegal material.”
Marchionne insisted that Fiat Chrysler has been forthright.
“We’re trying to do an honest job here. We’re not trying to break the bloody law,” he said.
Marchionne rejected the suggestion that rogue employees could have schemed to violate EPA laws. “If I found a guy like that, I would have hung them on a door,” he said.
Fiat Chrysler shares trading on the New York Stock Exchange were down about 9% after initially tumbling 14% on the news as investors fretted about the financial implications.
New York Attorney General Eric Schneiderman said his office would investigate Fiat Chrysler. Marchionne said he believes the U.S. Justice Department is assisting the EPA with its investigation.
Several analysts said the company’s sin may have been solely of disclosure, not an intentionally deceptive act like that at VW.
“Software which adjusts the emissions of an engine is standard practice across the industry,” Evercore ISI analyst Arndt Ellinghorst said in a note to investors. “It is the failure to disclose which seems to be the primary cause of concern at the EPA.”
The EPA has the authority to fine automakers up to $44,539 per vehicle for the worst violations of the Clean Air Act. The agency threatened possible fines Thursday if it determines that the software installed on the vehicles qualifies as illegal “defeat devices” under U.S. laws.
It’s unclear whether the incoming Trump administration will continue Obama administration policies in regards to emissions investigations.
“We find it very, very strange it would happen before this administration changes over,” Marchionne said.
Kelley Blue Book analyst Rebecca Lindland said there was no indication that Fiat Chrysler intentionally cheated.
“They’re not meeting the standards, but right now, it doesn’t appear to be the same type of deliberate act that Volkswagen admitted to,” she said.
Lindland said the mistake might have been a failure to mention the technology when re- questing EPA certification to sell the vehicles. “It’s like bringing a calculator to your math test — it’s one thing to have it on your desk, but it’s another thing to have it in your lap,” she said.
Fiat Chrysler said in a statement that it offered to the EPA to develop software fixes to “further improve emissions performance” because it wants to “resolve this matter fairly and equitably.”