German Plan to Query Fiat’s Emissions Hits Italian Roadblock

  • Fiat cancels meeting with Germany, citing lack of jurisdiction
  • Italian transport minister tells counterpart to come to him

As Germany tries to exert more authority over the widening auto industry emissions scandal that began in the country, it’s finding not all carmakers are so keen to cooperate.

Fiat Chrysler Automobiles NV has snubbed the German Transport Ministry’s efforts to question the automaker and in doing so won the backing of Italian authorities. The dispute came to a head Thursday when Fiat refused to meet with German Transport Minister Alexander Dobrindt to discuss emissions and his Italian counterpart told Dobrindt to effectively leave Fiat alone.

Italian Transport Minister Graziano Delrio wrote in a letter to Dobrint that Germany should start an "official dialog" with his office "rather than continuing to discuss directly with the manufacturer." Under European Union rules, Italy is responsible for testing Fiat cars because the automaker’s regional operations are in the country. German Transport Ministry spokeswoman Svenja Friedrich replied Friday that it’s now up to Italy to look into Fiat’s emissions. She declined to say whether Germany recognizes Italy’s jurisdiction.

"The spat between national authorities even on emissions testing is just another sign of how Europe looks divided on almost everything with a tendency toward nationalism, including in the auto industry," said Giuseppe Berta, a contemporary history professor at Bocconi University in Milan. "The behavior of German authorities could generate suspicion that they are trying to show all carmakers are somehow in the same boat."

Strained Credibility

The auto industry’s credibility has been strained following Volkswagen AG’s September admission that it rigged diesel-engine software to pass official tests, prompting Germany to set up a commission to dig further. Mitsubishi Motors Corp. has since acknowledged that it manipulated fuel-economy tests, and Daimler AG is checking for possible irregularities in its vehicle certifications at the behest of the U.S. Department of Justice.

Dobrindt said Thursday that he has doubts as to whether Fiat’s cars are in line with rules for emissions certification, and that he was flabbergasted by the decision to rebuke his efforts to question the automaker.

“This uncooperative conduct by Fiat is totally incomprehensible,” Dobrindt said on Thursday. “There are concrete allegations at issue. It would be appropriate if Fiat commented to the investigative committee on this.”

Shares Drop

Fiat, which declined to comment on Dobrindt’s remarks, said in February that "all its vehicles comply with emission regulations and the company doesn’t cheat on emissions tests."

Fiat Chrysler shares dropped as much as 2.7 percent in Milan trading on Friday, the worst performer among European automotive stocks, and was down 1.7 percent as of 2:10 p.m. local time, giving the company a market value of 7.84 billion euros ($8.8 billion).

Fiat Chief Executive Officer Sergio Marchionne told analysts last month that "there needs to be much better coordination across the national bodies" in Europe on emission standards as "there’s a phenomenal level of confusion out there about the degree of freedom associated with the interpretation of that rule."

The current spat is the latest in a number of public disputes between Marchionne and the German auto industry. Marchionne had a showdown four years ago with then-VW CEO Martin Winterkorn -- who had to resign in 2015 over the emissions scandal -- during the Paris car show.

The two were feuding over Marchionne’s leadership of a regional industry group, prompting both automakers to threaten to resign from the organization. They eventually patched things up on that matter but continued to jab one another about VW’s interest in buying the Alfa Romeo brand from Fiat, something Marchionne repeatedly said will never happen.

Fiat’s decision to snub Dobrindt came a day after the minister expressed doubts about the legality of devices General Motors Co.’s Opel unit used to monitor emissions, raising the possibility that the brand’s engine software breached the country’s regulations. In contrast to Fiat, the Ruesselsheim, Germany-based brand is fully supporting the government’s investigations. Opel reiterated Friday that its engines comply with laws and rules and no illegal software is used.

The German ministry said Friday that the emissions investigation is continuing and is focused on a total of 30 models. The probe still includes Fiat as well, it said.

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