Wednesday, May 18

Baffled By Dieselgate, Emails Reveal Fiat Chrysler Struggled With Revamped Emissions Tests

Within days of Volkswagen’s admission in September 2015 that it purposely installed software on diesel vehicles to deceive regulators during vehicle emissions tests, the U.S. Environmental Protection Agency turned its attention elsewhere to one of America’s own car companies—Fiat Chrysler.

This story was originally published on February 8, 2018

Following VW’s announcement, the EPA announced it would conduct additional testing to measure emissions during everyday driving conditions, and it suspected Fiat Chrysler in particular may’ve also installed illegal software on certain diesel models. The EPA’s effort set off a heated back-and-forth with Fiat Chrysler, which, according to emails obtained by Jalopnik, became immensely frustrated by the changes that emerged in a post-Dieselgate environment.

As Fiat Chrysler now braces for a potentially massive fine from the government and a recall over alleged emissions cheating on its V6 diesel engines in recent Jeep Grand Cherokees and Ram Trucks, the emails reveal what a hard time the automaker had in coming to grips with the mess Volkswagen created.

The emails obtained by Jalopnik under a Freedom of Information Act request show extensive technical discussions between FCA, the EPA, and employees from the California Air Resources Board (CARB), and an intense disagreement over the government’s investigation into whether FCA misled regulators and knowingly installed defeat devices. They also show how the EPA’s own efforts to recalibrate its long-running testing policies caused internal strife at one of the largest automakers.

All together, the emails—which you can view below—show that Dieselgate seemingly upended what was long considered standard operating procedure at the EPA when conducting emissions tests.

It was much more a game of trust between America’s environmental regulator and automakers, until it couldn’t be anymore.

“We are not now in the position to simply accept FCA’s attestations about the product, but feel we must validate those claims ourselves,” Byron Bunker, director of the compliance division at the EPA’s Office of Transportation and Air Quality, wrote in a November 2016 email to FCA officials.

Specifically, federal officials allege that FCA failed to disclose eight Auxiliary Emissions Control (AECD) devices—hardware or software that interferes or disables emissions control equipment during real-world driving—for Ram 1500s and Jeep Grand Cherokees made between 2014 and 2016. AECDs are legal, so long as they’re used for appropriate reasons, such as protecting an engine when a vehicle’s being towed. In this case, regulators are looking into whether FCA used them to skirt emissions rules.

At most, the EPA estimated the automaker could face as much as a $4.6 billion fine.

Automakers have to disclose AECDs to the U.S. Environmental Protection Agency to receive a Certificate of Conformity. They also have to justify and prove why an AECD isn’t a defeat device, which the EPA defines as “any device that bypasses, defeats, or renders inoperative a required element of the vehicle’s emissions control system.” There are several exemptions, but the upshot is that AECDs can’t drastically increase excess pollution under reasonable, everyday driving conditions. If the need for an AECD can’t be justified, the EPA could then deem it a defeat device.

Within days of Volkswagen’s admission in September 2015, Morrie Lee, FCA’s regulatory affairs manager, told the EPA in an email that the automaker had already been working on an internal document that would define what a defeat device was. He explained the parameters FCA considered for what it defined as an AECD—for instance, does the AECD impact fuel emissions—but senior management apparently disagreed on the definition.

“The drivability and emissions upper management think that the definition is too broad,” he said. “Is there a more up to date guidance on AECD’s and defeat devices.” Questions for additional guidance aren’t uncommon, especially following VW’s cheating admission, but the query reflected an apparent internal uncertainty at FCA over what even constituted a defeat device.

“I’m getting questions asked of me from all corners now and I need to get a better handle of everything,” Morrie said. The EPA responded that it had no updated guidance on defeat devices.

Weeks later, the agency had outright accused FCA of using illegal software to cheat emissions tests, a position that was formalized more than a year later. FCA has denied that it “engaged in any deliberate scheme to install defeat devices to cheat U.S. emissions tests.”

The feds’ “strongest evidence” that FCA knowingly installed defeat devices is that it failed to disclose several AECDs when applying for its Certificate of Conformity, which is necessary to sell any car in the U.S., said John German, senior fellow at the International Council on Clean Transportation. German assisted in the effort that uncovered Volkswagen’s diesel emissions cheating.

“There’s only two possible reasons for that,” German told Jalopnik. “One is that they didn’t understand they have to be disclosed. And the other is they’re deliberately trying to hide them.” It’s unclear why FCA failed to disclose the AECDs from the outset. The EPA didn’t respond to a request for comment from Jalopnik. An FCA spokesperson declined to comment.

The investigation by the U.S. Department of Justice into FCA’s alleged use of defeat devices on 104,000 Jeep and Ram models came to a head last week, after news broke of a pending settlement on the table. In late January, the DOJ presented a settlement offer that required “very substantial civil penalties” that “adequately reflected the seriousness of the conduct that led to these violations,” according to a copy of the filing obtained by Bloomberg. (A DOJ spokesperson declined a request for comment.)

The proposal didn’t include an end to the department’s ongoing criminal investigation into FCA’s diesel emissions tests. But the letter cites “compelling evidence” that the automaker “knew or had reason to know that the vehicles did not comply with clean-air rules and that the company misled regulators,” Bloomberg reported. EPA Administrator Scott Pruitt previously said his staff has evidence that show FCA’s conduct “was strategic and intentional.”

Dan Cohan, associate professor of civil and environmental engineering at Rice University, said so-called “clean diesel” technology was supposed to help reduce the global use of oil and be a solution toward addressing climate change, but it “has never lived up to its billing in the real world.”

“It’s really tough to get diesel emissions running cleanly,” Cohan said. “The reason why diesel cars get better acceleration and performance is they run at hotter temperatures and higher pressure. And running at higher temperatures is what generates NOx. It makes it a much more difficult thing to control when you get the smaller engines.”

Started From Dieselgate

The Feds’ investigation into FCA dates to a year ago, when regulators first revealed they believed the automaker flouted diesel emissions tests for Ram and Jeep models.

The government’s investigation into FCA emanated from Volkswagen’s admission in 2015 that it purposely installed defeat devices on nearly 500,000 cars in the U.S. to deceive regulators into thinking the vehicles were cleaner than they actually were in real-world driving. In previous statements, the automaker has said it intended to “defend itself vigorously, particularly against any claims” that it engaged “in any deliberate scheme to install defeat devices to cheat U.S. emissions tests.”

Marchionne, in particular, has forcefully pushed back against comparisons to VW’s conduct.

“The way that it has been described, I think, has been unfair to FCA,” he previously said. “And that is the thing that disturbs me most. There’s not a guy in this [company] who would try something as stupid as” cheating on diesel tests, he said. “We don’t belong to a class of criminals.”

Two months after Morrie’s query September 2105, the automaker met with the EPA to discuss high levels of nitrogen oxide (NOx) emissions—a pollutant that contributes to smog and a host of health problems—in two diesel models.

At the meeting, the EPA told FCA that it believed one of the AECDs in question appears to “violate EPA’s defeat device regulations,” according to an email from Byron Bunker, director of the compliance division at the EPA’s Office of Transportation and Air Quality. Jalopnik first reported on Bunker’s statements last summer.

Mike Dahl, head of vehicle safety and regulatory compliance for FCA’s U.S. unit, responded by saying he understood the EPA has concerns and that FCA “takes very seriously the concerns your office has raised.”

Dahl said the automaker would cooperate with the EPA in addressing its points, and added that if FCA was formally accused of using a defeat device, it could result in “potentially significant regulatory and commercial consequences.”

In response to earlier questions from Jalopnik, FCA said the emails showed it “meaningfully engaged with the EPA regarding its diesel engine emissions for an extended period of time.” The automaker said updated software calibrations would help “facilitate a prompt resolution of this matter.”

Normal EPA Process ‘Failed’

Throughout 2016, the emails show, FCA and the EPA continued to discuss remedies for the alleged excess pollution. By that October, FCA appeared more than ready to put the issue behind it.

“At this point, we would like to reach a conclusion on certification as soon as possible,” FCA’s Dahl wrote in a Oct. 31, 2016, email to Annette Hebert, chief of CARB’s emissions compliance division. But the following day, Hebert responded that her staff still had concerns about “some of the AECDS that have been divulged” and said additional tests were necessary.

“Can we get a 2017 test product delivered to our laboratory in El Monte to examine?” Hebert wrote. “If so, when?”

FCA didn’t explicitly say it, but the automaker appeared frustrated by CARB’s request. In a Nov. 2, 2016 email, FCA’s Chief Technical Compliance Officer Mark Chernoby asked EPA officials if they also needed a testing vehicle.

“This is a very challenging process,” Chernoby wrote to EPA’s Bunker.

Bunker empathized with the automaker. For years, the agency conducted tests in a way that relied on the automakers’ own findings: manufacturers test their own vehicles, report the results to the EPA, and the agency then “reviews the results and confirms about 15 percent–20 percent of them through their own tests at the National Vehicles and Fuel Emissions Laboratory,” according to the EPA’s site.

“This process has historically allowed us to provide very timely certification review, to manage the program with surprisingly few staff and to reasonably ensure clean vehicles on the road,” Bunker wrote. “That process failed with the 2014-16 FCA diesel products.”

Left unsaid is what Volkswagen’s admission of being a cheat has done to the industry; ever since, several major automakers—most recently General Motors and Ford—have been accused of skirting emissions tests for tens of thousands of vehicles.

By early 2017, after the EPA went public with its claims against FCA, the automaker was clearly frustrated. In an email dated Feb. 11, 2017, FCA’s Chernoby told the EPA “any early indication that you can provide relative to what the agencies want us to work on for the 2017 3.0L Ram/Grand Cherokee diesel would be appreciated.”

“We have boats on the ocean with engines on them,” he said. “Every hour that I can have the team working on the issues is an hour of production that could be saved.”

Update (4:19 p.m.): This story has been updated to reflect that a recall of the Jeep and Ram models could be voluntary and not by a mandatory order.

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