Fiat Chrysler in the crosshairs
Italian engineer charged with diesel fraud in the US, plus a tax hit in EuropeThe word “embattled” might have been written for Fiat Chrysler Automobiles yesterday, when with two separate scandals ripped through the Italian-American car-maker.
The most serious of the crises has all the hallmarks of Volkswagen’s Dieselgate scandal, with engineer Emanuele Palma due in US Federal Court in Detroit today charged with conspiracy and fraud.
Palma is accused of being the centerpiece of a scheme to trick US government regulators into believing that emissions from more than 100,000 Fiat Chrysler diesel cars and trucks were cleaner than they actually were.
Palma, up until June 2016 a senior manager at FCA’s diesel engine company, has been accused of manipulating diesel emissions during government tests to deliver acceptable results.
FCA says it’s cooperating with federal investigators in the case, though it’s not the company’s first issue with emissions in the US.
Only this year it agreed to hand over $US650 million for cheating emissions tests with Jeep Grand Cherokees and RAM 1500 trucks built between 2014 and 2016.
On the other side of the Atlantic Ocean, FCA is expecting a tax bill in the tens of millions of euros after losing a case with the European Commission over its tax arrangements in Luxembourg.
FCA had a deal to base its internal financial subsidiary in the tiny European state on the basis of favourable tax status there. The company has been caught channeling its profits from across Europe through its Luxembourg subsidiary.
A 15-month investigation by the EC’s competition commissioner confirmed the tax status in Luxembourg was illegal state aid.
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