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FCA vs VW; SM on EPA, diesels

by David Zatz on

FCA is unlikely to go through the kind of protracted diesel-emissions prosecution and expense that Volkswagen did. Nor do they deserve to.

Ram diesel

Volkswagen started cheating on diesel emissions over a decade ago, in a global effort from Audi, Volkswagen, SEAT, and Porsche. Company leaders knew about it, so dealers and customers were both able to sue in civil courts. Volkswagen software detected emissions testing and changed its behavior accordingly.

At FCA, the software does not detect testing; the violations listed by the EPA prevent engine damage and wear, and would probably have been no issue at all, if they had been disclosed in advance (except one, which the EPA claims was designed to cut diesel emissions fluid use).

The law clearly calls for full disclosure of any programs or devices that change the working of emissions systems, for any reason.  The EPA did not say the eight issues they discovered were “defeat devices,” softening the blow.

The problem is likely the same as with the “recall scandal” — “sloppiness” within a company that lost most of its engineers, hired thousands of new ones, and keeps working people long hours.

Volkswagen’s scandal had legs because reps kept lying, and because of its scope (580,000 vehicles in the US).  FCA’s scandal is likely less of an issue; it covers just 104,000 2014-16 Rams and Jeeps, and so far there is no clear intent to defraud.  If there was no criminal intent, the constant “found lying” stories won’t be there, and the public will quickly forget anything happened.

The federal suit will likely be dropped or settled, but states can still investigate and fine FCA, whose stock has now fallen by around 10% — still above its three-month average.

Lost sales may be lower for FCA, which depends less on diesels than VW; Ram and Jeep buyers also may not care as much about emissions as four-cylinder VW buyers.

VM V6 diesel

After the above was written, FCA CEO Sergio Marchionne spoke, and we added:

Sergio Marchionne pointed out that, unlike Volkswagen, “There has never been an intention on part of FCA to create conditions that are designed to defeat the testing process. That is absolutely nonsense. Anyone that tries to draw the comparison between us and VW is smoking illegal material. … We have done – in our view – nothing that is illegal. ”

As for a “rogue” employee deliberately breaking the law, VW-style? “There’s not a guy [here] who would try something as stupid.”

David Zatz founded Allpar in 1998 (based on a site he had begun in 1993-94), after years of writing reviews for retail trades. He has been quoted by the New York Times, the Daily Telegraph, the Detroit News, and USA Today. Before making Allpar a full-time career, he was a consultant in organizational psychology. You can reach him by using our contact form (much preferred) or by calling (313) 766-2304

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