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Fiat Chrysler accused of ‘serious violation'
EPA: Company failed to disclose emissions software
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The Environmental Protection Agency issued a “notice of violation” to the company that covers about 104,000 vehicles including the 2014 through 2016 Jeep Grand Cherokee and Ram pickups, all with 3-liter diesel engines. The California Air Resources Board took similar action.
“Failing to disclose software that affects emissions in a vehicle's engine is a serious violation of the law, which can result in harmful pollution in the air we breathe,” said Cynthia Giles, EPA assistant administrator for enforcement and compliance.
Fiat Chrysler CEO Sergio Marchionne denied any wrongdoing.
“We have done in our view nothing that is illegal,” he said Thursday on a conference call. “We will defend our behavior in the right environment.”
The announcement came one day after Fiat rival Volkswagen pleaded guilty in federal court to criminal charges related to widespread cheating involving emissions tests, agreeing to pay a record $4.3 billion penalty.
Marchionne said he was told by company lawyers that the Justice Department is investigating the company in concert with the EPA, raising the likelihood of an ongoing criminal probe. He said the company halted production of Grand Cherokees and Rams with diesel engines in September, but will continue to sell models manufactured before then that are still on dealers' lots.
The company said it intends to present its case to the incoming Trump administration. “We will work with the new leadership to get this issue through,” Marchionne said.
The White House said Thursday that the EPA makes enforcement decisions independently and that outgoing President Barack Obama wasn't involved in the decision to cite the company.
If found liable, Fiat Chrysler could face more than $4.5 billion in fines for violations of the Clean Air Act.
EPA said it will continue to investigate the “nature and impact” of the eight software functions identified through an intensive testing program launched after Volkswagen was caught in a 2015 cheating scandal involving its “Clean Diesel” line of vehicles. Regulators were not yet defining the software found in the Fiat Chrysler vehicles as “defeat devices” intended to cheat on government emissions tests.
But the agency said that numerous discussions with Fiat Chrysler over the past year had not produced any suitable explanation for why the company had failed to disclose the software, which regulators said caused the vehicles to emit less pollution during testing than during regular driving.
On Thursday, California regulators also announced they were citing Fiat Chrysler for 11 violations under that state's strict air-quality standards.
Fiat Chrysler shares ended down 10 percent Thursday at $9.95.