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US prepares to sue Fiat Chrysler over diesel emissions testing

NEW YORK - The Justice Department plans to file a civil lawsuit against Fiat Chrysler Automobiles NV over excess diesel emissions as early as this week if no agreement is reached with the Italian-American automaker, two sources briefed on the matter said on Wednesday. The Environmental Protection Agency in January accused FCA of illegally using undisclosed software to allow excess diesel emissions in about 104,000 cars and SUVs, the result of a probe that stemmed from regulators' investigation of rival Volkswagen AG. The EPA and California Air Resources Board have been in talks with FCA about the excess emissions and whether the agencies would approve the sale of 2017 FCA diesel models. A federal judge in California has set a May 24 hearing on a series of lawsuits filed by owners of vehicles against Fiat Chrysler and the Justice Department is expected to file its action by then if no agreement is reached. FCA said on Wednesday it believed that any litigation would be "counterproductive" to ongoing discussions with the EPA and California Air Resources Board. The company added that "in the case of any litigation, FCA US will defend itself vigorously, particularly against any claims that the company deliberately installed defeat devices to cheat U.S. emissions tests." The Justice Department took the same procedural step in early 2016 against Volkswagen, nearly four months after the German company admitted using software to emit excess diesel emissions in nearly 500,000 vehicles. The Justice Department has had an ongoing criminal investigation into FCA's conduct since last year, Reuters reported in January. The probe has turned up internal emails written in Italian and other documents about engine development and emissions issues, sources briefed on the probe said. U.S. regulators said FCA failed to disclose engine management software in 104,000 U.S. 2014-2016 Jeep Grand Cherokees and Dodge Ram 1500 trucks with 3.0-liter diesel engines. 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. The EPA has said the maximum possible fine against FCA could be $4.6 billion. In February, FCA said it had received requests for information and subpoenas from U.S. federal and state authorities, including the Securities and Exchange Commission, for diesel issues.

Fiat Chrysler global HQ lands in London's ultra-posh West End

It seems Fiat is bent on bolstering its image as a global automaker, as word has leaked out that the Italian/American conglomerate has chosen to locate its global headquarters in a rather swanky neighborhood in London. According to Bloomberg, the rental location on St. James Street in London's West End is a 10-minute walk from Buckingham Palace, and Fiat Chrysler Automobiles will fill up three complete floors of an office building that also houses The Economist magazine.
As a neutral location between Italy and the United States, the London-based headquarters makes sense, though, at $277 per square foot, this area is said to be the most expensive office space in the world. There's no mention of what FCA has actually agreed to pay for renting the space, but we're certain it isn't coming cheap.
Not surprisingly, Bloomberg also cites research indicating that the largest number of immigrants moving into London from January through August of this year hail from Italy, which makes sense considering the number of Italian executives and workers we'd expect would have to relocate to the UK in order to work at Fiat's new home. The company reportedly plans to be in place in London by the time it holds its next round of board meetings in October.

Volkswagen is not cool with a Fiat Chrysler merger

Volkswagen CEO Matthias Mueller shot down Fiat Chrysler CEO Sergio Marchionne's overtures for a merger in blunt fashion this week. Mueller told Reuters at the Geneva Motor Show, "We are not ready for talks about anything ... we have other problems. I haven't seen Marchionne for months." The unusually candid – and icy – response from one chief executive to another comes after Marchionne similarly pursued General Motors (again) this week. The FCA boss suggested GM might be looking for a new European partner as it prepares to unload its troubled Opel and Vauxhall divisions to PSA. A GM spokesman told USA Today that the company is not interested. Marchionne has been openly suggesting a GM merger since at least 2015, despite GM never reciprocating interest. VW's "other problems," as Mueller notes, include legal proceedings, fines, recalls, and other issues related to its long-running diesel scandal. Marchionne has long sought industry consolidation, arguing that automakers don't get a proper return on their investments in technologies, some of which are relatively similar. He's suggested sharing chassis and powertrain components could be a benefit to the collective auto sector. Skeptics argue FCA, which is smaller than GM, VW, Toyota, and others, needs a partner to survive, while its rivals already have the necessary scale to remain competitive. Related Video: