After they were caught cheating on emissions tests, Volkswagen has lost a CEO, lost billions in sales, and now faces $4.3 billion in fines.
Volkswagen will survive, but the scandal caused massive damage to their company.
Now, Fiat Chrysler (FCA) risks heading down the same road.
The US Environmental Protection Agency (EPA) has accused Fiat Chrysler of using computer software to manipulate the results of emissions test – letting their cars emit more emissions while appearing to be under the specified limit.
This is the same kind of thing that got Volkswagen in so much trouble.
Fiat Chrysler Shares Fall 13%
Investors fled Fiat Chrysler rapidly once the news broke, though the stock price did recover somewhat.
Fiat Chrysler CEO Sergio Marchionne says his company did nothing wrong, and their “consciences are clear.”
Time will tell whether this is the case.
If not, Fiat Chrysler could face massive financial penalties and a loss of consumer trust.
FCA Had Previously Announced US Expansion
The announcement from the EPA ruins what had been a good week of news for Fiat Chrysler Autogroup. They announced a $1 billion investment in the US, hoping to get out ahead of the incoming administration’s push for increased US production and a potential ‘border adjustment’ tax.
With the US government transition at full pace, the question is whether the new administration will care more about the potential emissions violation, or the expansion of jobs.
If it’s the latter, Fiat Chrysler may not pay as big a price as Volkswagen did.
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