FCA’s violations, Germany is attempting to make Italy responsible

di corriere canadese del January 16, 2017
The Honourable Joe Volpe, Publisher
TORONTO - “What a tangled web we weave, when first we practice to deceive.” - Walter Scott.  
Ahh ... The Auto Industry. The last remnant of a once thriving manufacturing industrial sector in North America. Its leaders run it with a style and ethic reminiscent of nineteenth century "robber barons" whose operating principle is best reflected by the old Industry adage: what’s good for GM is good for the country.
Today, their devotion for research and innovation to meet competitive dynamics and satisfy customer seems to revolve around inserting software into their products so that they can defeat safety and environmental legislation. The only legislation they support is the one that protects them against competitors or market penetration of innovative competitors. 
They have become expert at stock market manipulation and at begging for government grants. They resist vehemently any effort to have them comply with regulations and laws introduced by democratically elected bodies to bring them into line with the expectations of civilized societies.
In the last several years, one after the other, the major auto assemblers have been brought before Congressional Committees, Transportation Agencies, and Civil Courts tasked with arbitrating class action lawsuits by aggrieved consumers, First Toyota’s President was compelled to justify before the American Congress why his company’s products were putting lives at risk, unnecessarily. Then, GM was faced with fines and recalls over their reluctance to replace a corrective part costing pennies.
The "biggies", so to speak, involved VW’s elaborate scheme - according to the Environmental Protection Agency, in the USA - to circumvent the rules against the emissions of toxic gases, thereby defeating the intent of the law, the objectives of legislation and thus gaining an unfair advantage in the marketplace.
VW was fined 4.3 USD billion and is facing a further loss of 17 USD billion in civil court. Moreover six of its senior executives are facing criminal charges and jail time, if convicted. Five of them probably cannot be extradited from Germany.
Not to be outdone (sarcasm intended), one of the Detriot Three - [Fiat] Chysler Automotive (FCA) - in this last year has been the target of recall notices for hundreds of thousands of  defective vehicles; fined in excess of $700 million USD for misreporting sales in order to boost share value on the Stock exchange; and, now, for allegedly installing "defeat mechanisms" in its diesel-powered vehicles. In essence, despite the denials of its CEO, Sergio Marchionne, FCA, appears to have been as guilty as VW.
Mr. Marchionne, some readers may recall, famously called himself a "shark" when he demanded a $700 million CDN subsidy for FCA from the "minnows" in Ontario in order to stay at the Brampton plant, says there is no comparison. 
One would have to be stupid to deliberately install this technology, he is reported to have said to US Media. He could not explain how it was discovered in at least 104 000 of his North American vehicles. Nor did he know anything about this investigation prior to the EPA allegations on Thursday, he says.
Wonderful. The German government has been trying to tag the government of Italy with the responsibility for Fiat’s contravention of similar legislation in Europe. Even if one puts aside the fact that FIAT is headquartered in England, and that the German tactic is probably designed to place both the British and Americans on alert that trade relations with  Europe cannot be easily altered, Mr Marchionne cannot have been completely asleep at the switch.
In a show of bravado and support for incoming President Trump, On Tuesday he had announced that FCA would be prepared to invest $2 Billion USD in the USA. Only a cynic (sarcasm again) would suggest that there was a connection between the EPA’s allegations revealed Thursday and his effort to ingratiate himself to Trump.
The potential fine of $4,6 Billion USD represents about 35% of the company’s market capitalization on the New York Stock Exchange. Add that to the virtually unbearable debt burden of the company and its aging product line relative to those of its competitors, it hard to see a rosy picture ahead for FCA.
In an Auto sector meeting in Detroit last week, Mr Marchionne got the "Theresa May treatment": he was virtually shunned. 
A few short years ago, mr. Marchionne was heralded as  the saviour of FIAT. Now he is saddled with the perception that his accomplishments were achieved by breaking the rules.
Has he been caught? Time will tell, but the courtship aimed at selling Fiat to VW is all but over.

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