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Marchionne Scorned Deputy for Ruling Out Diesel Cheating Devices

Bloomberg 2018-05-15 03:36:05

The chief executive of Fiat Chrysler Automobiles NV admonished a company spokesman in 2015 for saying the company didn’t rig its vehicles with illegal software to pass emissions tests, according to documents filed in a related lawsuit.

An excerpt of the 2015 email from CEO Sergio Marchionne to Fiat Chrysler’s then-head of U.S. communications, Gualberto Ranieri, was revealed in federal court in Manhattan on Monday. The spokesman had issued a statement days after Volkswagen AG admitted to cheating on emissions tests that Fiat Chrysler did not use so-called defeat devices.

“Are you out of your goddam mind?” Marchionne wrote. He also said that the spokesman should be fired and called his actions “utterly stupid and unconscionable.”

The communication was produced by Fiat Chrysler in a lawsuit brought by shareholders in 2015 claiming the company misled investors about vehicle safety problems. The lawsuit, filed in federal court in Manhattan as a class action, claims that Fiat Chrysler failed to comply with U.S. vehicle safety laws, failed to submit required early warning information to U.S. regulators, delayed recalls, downplayed U.S. investigations and underreported recall costs. The court has rejected attempts by Fiat Chrysler to dismiss the case.

Fiat Chrysler has denied intentional cheating on its diesel emissions.

Earlier: Fiat Chrysler Investor Suit Over Defect-Reporting is Narrowed

“It is understandable that our CEO would have a forceful response to any employee who would opine on such a significant and complex matter, without the matter having been fully reviewed through the appropriate channels,” the company said in a statement.

Marchionne and Scott Kunselman, former head of Chrysler’s vehicle safety and regulator compliance, are named defendants in the suit.

Separately, the U.S. Justice Department sued Fiat Chrysler in May 2017 alleging the company used illegal emissions software on diesel-powered pickups and SUVs to circumvent U.S. emissions tests. The government alleged Fiat Chrysler sold nearly 104,000 Ram 1500 pickup and Jeep Grand Cherokee SUVs with 3.0-liter diesel engines that contained so-called defeat devices.

A defeat device allows a vehicle to pass government emissions testing while exceeding pollution standards under actual driving conditions. Marchionne has denied that the company intentionally tried to cheat on emissions standards, which Volkswagen admitted to doing in 2015.

Fiat Chrysler said in its statement Monday that while it’s in settlement talks with government and private parties, it will “vigorously” defend itself against any claim that it intentionally cheated on emissions tests.