Feds Ready to Hit Fiat Chrysler With Big Fines: Report
Fiat Chrysler Automobiles might need the 2019 Ram 1500’s newly increased payload capability when it comes time to visit the bank.
As we’ve told you since the scandal broke a year ago, FCA could find itself on the hook for hefty penalties after the Environmental Protection Agency slammed it for failing to declare a bevy of auxiliary emission control devices on its 3.0-liter diesel V6 engine. With the 2017 and 2018 Ram and Jeep EcoDiesel models now in compliance, the question becomes: what does FCA pay to settle the fallout?
According to documents obtained by Bloomberg, it seems the monetary fine sought by the U.S. Justice Department might not fit in the pickup bed.
A copy of the settlement offer recently sent to FCA doesn’t list a dollar figure, but it does mention the need for “very substantial civil penalties” to deter future Clean Air Act violations.
Over 100,000 2014-2016 Ram 1500 and Jeep Grand Cherokee models fitted with the company’s EcoDiesel engine fell into the hands of American customers before the EPA discovered the undeclared devices. The agency withheld certification of 2017 models until last July, when the automaker revealed a “fixed” engine and a plan to bring older models into compliance. Previously sold models will see a fix no earlier than May.
DOJ lawyers write that any settlement must “adequately reflect the seriousness of the conduct that led to these violations.” The civil penalties won’t bring an end to the department’s criminal investigation, however. Under existing law, FCA could face fines totalling up to $4.6 billion, though the actual penalty will likely be far less. As well, it seems certain — based on earlier correspondence — that FCA will pony up for environmental mitigation efforts designed to make up for the excess pollution emitted since 2014.
These measures could include low- or zero-emission “mobility” projects, which immediately brings to mind Chrysler’s Pacifica Hybrid and its current involvement with a self-driving technology company (and its green ride-hailing vision).
Mary Nichols, chair of the California Air Resources Board, wouldn’t comment on the settlement, but did note that FCA is using the same team of lawyers used by Volkswagen in crafting its historic U.S. emissions settlement. Unfixed EcoDiesel owners shouldn’t expect a VW-style buyout, but a recall might be unavoidable.
News of the looming settlement saw FCA’s stock fall on both sides of the Atlantic.
[Image: Fiat Chrysler Automobiles]
George B on Feb 05, 2018
Near as I can tell Volkswagen cheated to avoid the up front cost of emissions control hardware that would have made the Jetta TDI too expensive to sell in the US while FCA may have cheated to get better fuel economy numbers, better engine reliability, and lower urea usage. A non-compliant Jetta gets crushed and melted because the cost of making it compliant is too high. A non-compliant Ram 1500 can be made compliant if owners can be persuaded to bring their truck in for new software. What's uncertain is what would be approved by the EPA if it was properly disclosed from the beginning. Probably doesn't matter as long as diesel fuel is expensive relative to regular gasoline.
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