FCA working to resolve U.S. diesel emissions issue

GENEVA/WASHINGTON -- Fiat Chrysler Automobiles is still trying to win U.S. approval to sell 2017 diesel models as the U.S. government decides whether to take legal action, CEO Sergio Marchionne said on Tuesday.

In January, the EPA and the California Air Resources Board accused the automaker of illegally using hidden software to allow excess diesel emissions from 104,000 U.S. trucks and SUVs. The EPA has refused to grant Fiat Chrysler approval to sell 2017 diesel models.

"We have been dealing with the EPA and CARB, we have engaged legal counsel. The only thing I can tell you is that we continue to work with the agencies to try and resolve this," Marchionne told reporters at the Geneva auto show.

"We continue to offer full cooperation to the agency to try get this issue resolved. I think my main objective now is to get certification for the 2017 models," he said. 

Last week, the U.S. Justice Department told a judicial panel in a previously unreported filing that the government "continues to consider whether to commence judicial proceedings in connection with the violations alleged" by the EPA.

The filing said FCA's actions "may have violated other federal laws as well. The United States may well become involved in litigation with FCA regarding this matter to vindicate important environmental and other federal interests." 

The EPA is continuing to "evaluate certification of new model year 2017 vehicles," the filing said.

Marchionne said Tuesday if the automaker wins certification for the 2017 models, then "I think we can take that solution and apply it back to the 2014's to 2016 cars."

Marchionne said he did not raise the company's diesel emissions issue with President Donald Trump when he met with auto CEOs in January.

Fiat Chrysler said it faces at least nine civil lawsuits in five states related to the emissions issue. A judicial panel will hold a March 30 hearing to decide whether the cases should be consolidated before a single judge.

Last week, FCA disclosed that the U.S. Securities and Exchange Commission and some state attorneys general are investigating emissions issues. Reuters reported the Justice Department has been investigating FCA for more than six months.

A person briefed on the matter said New York Attorney General Eric Schneiderman issued a subpoena to FCA and is leading a multi-state investigation.

Marchionne in January rejected the EPA's allegations, saying there was no wrongdoing and the company never attempted to create software to cheat emissions rules.

The EPA announcement followed closer scrutiny of automakers after Volkswagen AG admitted to cheating diesel emissions tests in 580,000 U.S. vehicles.