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Analysts wary over FCA lawsuit but say emissions not as bad as VW

MILAN - Any potential fines Fiat Chrysler (FCA) may need to pay to settle a US civil lawsuit over diesel emissions will unlikely top $1 billion, analysts said, adding the case appeared less serious than at larger rival Volkswagen. The US government filed a civil lawsuit on Tuesday accusing FCA of illegally using software to bypass emission controls in 104,000 vehicles sold since 2014, which it said led to higher than allowable levels of nitrogen oxide (NOx) that are blamed for respiratory illnesses. FCA's shares dropped 16 percent in January when the U.S. Environmental Protection Agency (EPA) first raised the accusations, adding the carmaker could face a maximum fine of about $4.6 billion. The stock has been under pressure since. Volkswagen agreed to spend up to $25 billion in the United States to address claims from owners, environmental regulators, U.S. states and dealers. FCA, which sits on net debt of 5.1 billion euros ($5.70 billion), lacks VW's cash pile but analysts said its case looked much less severe. While VW admitted to intentionally cheating, Fiat Chrysler denies any wrongdoing. Authorities will have to prove that FCA's software constitutes a so-called "defeat device" and that it was fitted in the vehicles purposefully to bypass emission controls. Even if found guilty, the number of FCA vehicles targeted by the lawsuit is less than a fifth of those in the VW case. Applying calculations used in the German settlement, analysts estimate potential civil and criminal charges for Fiat Chrysler of around $800 million at most. Barclays has already cut its target price on the stock to take such a figure into account. Analysts also noted that FCA's vehicles are equipped with selective catalytic reduction (SCR) systems for cutting NOx emissions, so it is likely that any problem could be fixed through a software update. "Should this be the case, we estimate a total cost per vehicle of not more than around $100, i.e. around $10 million in aggregate," Evercore ISI analyst George Galliers said in a note. The estimates exclude any additional investments FCA may be asked to make in zero emissions vehicles infrastructure and awareness as was the case with VW. FCA said last week it would update the software in the vehicles in question, hoping it would alleviate the regulators' concern, but analysts said it may have been too little too late. The carmaker is also facing accusations over its diesel emissions in Europe.

FCA is setting a five-year strategy: Here's how the last one played out

We're slightly more than four years removed from Sergio Marchionne last five-year plan for FCA, a tell-all where the Italian-American automaker divulged its plans for the 2014 through 2018 model years. It was a grand affair, where Sergio told FCA investors that all was right in Auburn Hills, Alfa Romeo and Maserati were making comebacks, and the fifth-gen Dodge Viper received a mid-cycle refresh. You can read every last one of those past predictions right here. We're on our way to Europe to see Sergio's sequel, coming out Friday straight from FCA's Italian headquarters. (Bloomberg reports a plan to expand Jeep and Ram globally, combine Alfa Romeo and Maserati into a single division for an eventual spinoff, and downsizing Fiat and Chrysler. Also, EVs.) But before we arrive in Italy and find out exactly what Marchionne has planned for 2019 through 2023 as his last act as CEO, let's take a minute to tally up the results of his last term based on the same scoresheet we used in 2014. Now, we're only five months into 2018, so much of this — including vehicles like the Ram HD and Jeep Grand Wagoneer — could still debut this year. For those, we'll mark things TBD. We're not going to draw any conclusions or make any objectionable remarks. We're simply going to let the stats speak for themselves.

FCA recalls Ram dualie chassis cabs to recalibrate top speed

If you're one of the 1,771 owners of a 2014-15 Ram 4500 or 5500 chassis cab with a 6.4-liter Hemi V8 and a dualie rear axle, you may be hearing soon from Fiat Chrysler Automobiles to bring your truck in to your local dealer. The reason, you ask? To have the speed limiter recalibrated. The problem, according to the statement below, is that while some of these trucks are electronically limited to 106 miles per hour, their tires can't safely maintain that speed. As a result, FCA is having dealers recalibrate the limiter to 87 mph. Of course, that's still well above the speed limit in most places, and "FCA believes it is unlikely that these trucks are operated at such speeds," but that it "is acting out of an abundance of caution." In addition to the 1,771 units in the United States, the company is recalling another 169 in Canada. In an unrelated campaign, FCA is also recalling a handful or two of 2015 Dodge Challengers – 72 in the US, six in Canada and three in Mexico – to secure a side-curtain airbag bolt that may have been improperly installed during assembly over the course of a ten-day period. In both cases, FCA says it is unaware of any complaints, accidents or injuries related to these issues. Statement: Speed Recalibration May 15, 2015 , Auburn Hills, Mich. - FCA US LLC is voluntarily recalling an estimated 1,771 trucks in the U.S. to recalibrate their maximum speed. The dual-wheel trucks are currently restricted to a top speed of 106 miles per hour (mph), but an internal specification review revealed top speed should be set at 87 mph, in accordance with their factory-equipped tires. The Company is unaware of any related injuries, accidents or customer complaints. Dealers will recalibrate vehicle speed accordingly. While FCA believes it is unlikely that these trucks are operated at such speeds, and that doing so would exceed posted speed limits in nearly every applicable jurisdiction, the Company is acting out of an abundance of caution. The campaign is limited to certain model-year 2014-15 Ram 4500/5500 Chassis Cabs equipped with 6.4-liter HEMI V-8 engines. An additional 169 vehicles are believed to be in Canada. Affected customers will be advised when they may schedule service. Customers with questions may call the FCA US Customer Information Center at 1-800-853-1403. ### Statement: Bolt May 15, 2015 , Auburn Hills, Mich. - FCA US LLC is voluntarily recalling an estimated 72 cars in the U.S.