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Fiat Chrysler Accused of Excess Diesel Emissions by EPA

Fiat Chrysler Accused of Excess Diesel Emissions by EPA
As a result of a probe that stemmed from regulators' investigation of rival Volkswagen AG, Fiat Chrysler Automobiles NV has been accused of illegally using hidden software to allow excess diesel emissions to go undetected by the U.S. Environmental Protection Agency.
Since the maximum fine is about $4.6 billion, FCA shares plummeted. about one-sixth the vehicles in the Volkswagen case and amounting to 104,000 U.S. trucks and SUVs sold since 2014, would be affected by the EPA.
In violation of the law, Fiat Chrysler’s undeclared auxiliary emissions control software allowed vehicles to generate excess pollution as notices of violation were issued separately by the EPA and California Air Resources Board.
Fiat Chrysler said that the U.S. Justice Department is investigating. He is "deeply troubled" by the EPA findings and "will investigate the claims against Fiat Chrysler and stands ready to work with our state and federal partners", said New York Attorney General Eric Schneiderman said in a statement.
Claiming that there was no wrongdoing and the company never attempted to create software to cheat emissions rules by detecting when the vehicle was in test mode, the allegations were angrily rejected at a hastily assembled conference call with reporters by Fiat Chrysler Chief Executive Sergio Marchionne.
Sating that the company was planning updated software to address EPA concerns, he characterized the dispute as whether the automaker had completely disclosed software that protects the engine.
He said "I'm really pissed off" about reports that equate FCA's issues with VW's and added that the EPA and the company could have settled the issue in "a more efficient way" without the EPA announcement.
"The way that it has been described, I think, has been unfair to FCA, and that is the thing that disturbs me most," Marchionne said.
Regulators had a "belligerent" view of automakers, he also suggested. "We don't belong to a class of criminals," he said. "We're not trying to break the bloody law."
The company has no plans to stop selling 2016 U.S. diesel models.
While it is not clear if they have found any additional wrongdoing, EPA has reviews ongoing of other automakers' emissions systems.
In 104,000 U.S. 2014-2016 Jeep Grand Cherokees and Dodge Ram 1500 trucks with 3.0-liter diesel engines, regulators said FCA failed to disclose engine management software. Increased emissions of nitrogen oxides (NOx) result from the undisclosed software.
Fiat Chrysler had an obligation to disclose the "illegal software" but has not decided whether to label them "defeat devices", Cynthia Giles, an EPA official, said.
Undisclosed pieces of software can alter how a vehicle emits air pollution and the EPA said it found at least eight such undisclosed pieces of software. Fiat Chrysler had recalled vehicles for one of the undisclosed software.
Efraim Levy, analyst with CFRA, said FCA stands to "get a fresh start with the Trump administration."
After Volkswagen AG admitted to cheating diesel emissions tests in 580,000 U.S. vehicles there is closer scrutiny of automakers and the EPA announcement comes amid such scrutiny.
Following an admission from Volkswagen that it installed software in cars allowing them to emit up to 40 times legally permissible level of pollution, in 2015, EPA said it would review all U.S. diesel vehicles.

Christopher J. Mitchell

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