May 15, 2018 / 2:16 AM / in 9 days

Fiat Chrysler CEO reprimands colleague for commenting on emissions

WASHINGTON (Reuters) - Fiat Chrysler Chief Executive Officer Sergio Marchionne reprimanded the company’s top U.S. spokesman for issuing press releases about Fiat’s vehicle emissions practices days after Volkswagen’s (VOWG_p.DE) disclosure in September 2015 that the German automaker had used illegal software to evade emissions tests, documents released Monday show.

FILE PHOTO: Sergio Marchionne, CEO, Fiat Chrysler Automobiles, speaks with journalists at the North American International Auto Show in Detroit, Michigan, U.S., January 15, 2018. REUTERS/Rebecca Cook/File Photo

Lawyers suing Fiat Chrysler Automobiles NV (FCAU.N) in a securities case filed excerpts of an email from Marchionne to Gualberto Ranieri, then the company’s U.S. spokesman, in a filing in federal court in New York criticizing him for saying that the company does not use defeat devices.

“Are you out of your goddam mind?” Marchionne wrote in an email on Sept. 22, 2015, adding that Ranieri should be fired and calling his actions “utterly stupid and unconscionable.”

The company said in a statement on Monday it was “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 its appropriate channels.”

The statement added that Ranieri’s comments came just days after VW’s emissions issue became public “and before a comprehensive internal review and discussions with component suppliers was possible.”

Fiat Chrysler was sued in 2015 along with Marchionne and other executives over claims it defrauded shareholders by overstating its ability to comply with vehicle safety laws. An amended version of the complaint filed in 2017 added claims about its compliance with emissions laws.

The shareholders accused the defendants of inflating Fiat Chrysler’s share price by hundreds of millions of dollars from October 2014 to October 2015 by downplaying safety concerns.

    They said the shortcomings materialized in 2015 when the automaker was fined $175 million by the National Highway Traffic Safety Administration, and took a roughly $670 million charge for recalls.

    Plaintiffs filed the excerpts seeking approval to take up to 40 additional depositions, including Marchionne’s.

    The U.S. Justice Department sued Fiat Chrysler in May 2017, accusing it of illegally using software to bypass emission controls in 104,000 diesel vehicles sold since 2014.

    Fiat Chrysler has held numerous rounds of settlement talks with the Justice Department and California Air Resources Board to settle the civil suit, including talks as recently as earlier this month. It faces a separate criminal probe into the matter.

    The Justice Department sent Fiat Chrysler lawyers a Jan. 27 settlement offer that would require the company to offset excess pollution and take steps to prevent future excess emissions, Reuters reported in February. The letter included language that a settlement must include very substantial civil penalties.

    Regulators have said Fiat Chrysler diesel vehicles had undisclosed emissions controls that allowed vehicles to emit excess pollution during normal driving. The company has denied wrongdoing, saying it never engaged in any deliberate scheme to cheat emissions rules.

    In a separate court filing Monday in Detroit, lawyers filed amended class-action lawsuit against Fiat Chrysler and Cummins Inc (CMI.N) asserted there were at least two diesel emissions defeat devices installed in 2007-2012 Dodge Ram 2500 and 3500 trucks to evade emissions testing after a prior version was dismissed in March. Both companies have denied wrongdoing.

    Reporting by David Shepardson; Editing by Leslie Adler

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