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U.S. EPA Accuses Fiat Chrysler Of Excess Diesel Emissions

The U.S. Environmental Protection Agency on Thursday "accused Fiat Chrysler Automobiles NV of illegally using hidden software to allow excess diesel emissions to go undetected, the result of a probe that stemmed from regulators' investigation of rival Volkswagen AG," according to Shepardson & Woodall of REUTERS. FCA shares "plummeted" as the maximum fine is about $4.6B. The EPA action affects 104,000 U.S. trucks and SUVs sold since '14, "about one-sixth the vehicles in the Volkswagen case." The EPA and California Air Resources Board told Fiat Chrysler that "it believes its undeclared auxiliary emissions control software allowed vehicles to generate excess pollution in violation of the law and each issued notices of violation." Fiat Chrysler said that the U.S. Justice Department is investigating. N.Y. Attorney General Eric Schneiderman said in a statement that 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." Fiat Chrysler CEO Sergio Marchionne "angrily rejected the allegations at a hastily-assembled conference call with reporters," saying 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." He characterized the dispute as "whether the automaker had completely disclosed software that protects the engine," adding the company was planning updated software to address EPA concerns. He said that the EPA and the company could have settled the issue in "a more efficient way" without the EPA announcement, and he added, "I'm really pissed off" about reports that equate FCA's issues with VW's. Marchionne: "The way that it has been described, I think, has been unfair to FCA, and that is the thing that disturbs me most." He also suggested regulators had a "belligerent" view of automakers. Marchionne said, "We don't belong to a class of criminals. We're not trying to break the bloody law." The company has no plans to stop selling '16 U.S. diesel models. (REUTERS, 1/12). DEUTSCHE WELLE reported FCA shares "plummeted" more than 16% in European trading after the EPA issued a notice of violation for alleged violations of the Clean Air Act. Cheating software "works by detecting when a vehicle is undergoing laboratory testing." It puts the engine into a "low-emissions state that produces levels of pollution that are lower than those the same engine emits during normal driving." The accusation comes one day after German carmaker Volkswagen admitted guilt and agreed to pay $4.3B in criminal and civil settlements to the U.S. government over a "similar scheme" (DW, 1/12).

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