WASHINGTON May 18 Fiat Chrysler Automobiles NV
shares fell over 3 percent in early U.S. trading on
Thursday on reports the Justice Department is preparing to file
a civil suit against the automaker for selling 104,000 vehicles
that emit excess diesel emissions.
Reuters reported Wednesday the Justice Department may file a
suit under the Clean Air Act as early as this week if no
agreement is reached with the Italian-American automaker.
The U.S. Environmental Protection Agency and California Air
Resources Board in January accused FCA of illegally using
undisclosed software to allow excess diesel emissions in
104,000 U.S. 2014-2016 Jeep Grand Cherokees and Dodge Ram 1500
trucks. That was the result of an investigation that stemmed
from regulators' investigation of rival Volkswagen AG
Shares of the company were down 3.1 percent at $10.26 in
morning trading on the New York Stock Exchange.
The vehicles engines were manufactured by VM Motori SpA, a
subsidiary of FCA, and some component parts for the engines were
supplied by Robert Bosch GmbH.
Bosch faces about two dozen lawsuits from owners in
connection with the FCA diesel vehicles.
The Justice Department and EPA have obtained internal emails
and other documents written in Italian that look at engine
development and emissions issues that raise significant
questions, people briefed on the investigation told Reuters. The
investigation has scrutinized VM Motori actions.
FCA acquired a 50 percent stake in VM Motori in 2010 and the
remainder in October 2013.
A federal judge in California set a May 24 hearing on a
series of lawsuits filed by owners of vehicles and some dealers
against Fiat FCA and the Justice Department is expected to file
its action by then if no agreement is reached.
FCA said on Wednesday it believed any litigation would be
"counterproductive" to ongoing discussions with the EPA and
The company said it "will defend itself vigorously,
particularly against any claims that the company deliberately
installed defeat devices to cheat U.S. emissions tests."
The automaker said in a court filing late Wednesday it was
working closely with EPA and California in a bid to win approval
to sell 2017 diesels.
FCA said testing is ongoing by regulators and it hopes to
"install modified emissions software" without requiring any
hardware changes to address regulators' concerns.
The company said it was ensuring potentially relevant
documents are preserved, disclosing it has an "investigation
hold" covering about 190 current and former employees related to
the diesel vehicles under investigation.
The European Commission has launched legal action against
Italy for failing to respond to allegations of emission-test
cheating by Fiat Chrysler in a procedure that could lead to the
country being taken to court.
(Reporting by David Shepardson; Editing by Bernadette Baum)