The investigation of allegations Fiat Chrysler Automobiles cheated on diesel emissions is moving into high gear, the maker revealing he has received subpoenas from a variety of federal authorities.
The smallest of the Detroit automakers in January announced it was coming under investigation for allegedly rigging its diesel engines to pass tough U.S. emissions standards. FCA Chief Executive Sergio Marchionne rejected those charges during a news conference at the North American International Auto Show.
The FCA investigation ramps up just as Volkswagen begins to wrap up its own diesel emissions scandal. Court documents released this week revealed that the German maker has so far spend $2.9 billion to buy back vehicles sold in the U.S. using a rigged, 2.0-liter turbodiesel. VW set aside $10 billion for buybacks as part of a settlement with the government announced last July.
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Since the Environmental Protection Agency first revealed VW’s diesel engine scam in September 2015, the German maker has spent over $20 billion in the U.S. alone to cover fines and settlements. That includes a $14.7 billion deal covering the 2.0-liter engine and another $4 billion for rigging its 3.0-liter engine.
VW must buy back all of the 475,000 vehicles sold in the U.S. using the smaller engine and, the newly released court documents show, it has already made offers worth nearly $5.9 billion to more than 323,000 owners. The company will have to buy back some older models using the 3.0-liter powertrain, but hopes to fix newer vehicles.
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The revelation that Volkswagen had used a so-called “defeat device” has led to allegations other manufacturers cheated on diesel emissions, triggering a number of investigations in the U.S. and abroad. But FCA is the first automaker in the U.S. to specifically come under the government’s microscope.
In an annual report filed with the SEC, the Euro-American maker revealed it had “received various inquiries, subpoenas and requests for information from a number of governmental authorities, including the U.S. Department of Justice, the SEC and several states’ attorneys general. We are investigating these matters and we intend to cooperate with all valid governmental requests.”
Despite a pledge to cooperate, Marchionne insisted, during a Detroit Auto Show news conference, that FCA had not rigged its diesel engines. It currently offers so-called “oil burners” in several of its American models, including the big Ram 1500 pickup.
Wildly popular in the early 1980s, in the wake of twin Mideast oil shocks, diesel engines dropped out of favor for a number of years because of problems with performance and emissions. But manufacturers have begun rolling out a number of new diesel engines using technology claimed to make them quick and clean, as well as fuel-efficient.
The revelations at VW have raised serious questions about whether these new diesel designs live up to expectations, though the automaker’s competitors insist they have met government emissions mandates.
For its part, VW now says it will no longer sell diesel models in the U.S. through the Volkswagen brand, though it may continue offering at least one model through its Audi marque.
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Funny the Obama administration had fiat buy Chrysler to get a loan
Look what it is now going to cost Chrysler with this alliance .